It might seem counterintuitive here in mid-March, but a look back at February new-vehicle affordability shows conditions improved a bit last month for consumers.

With prices high amid overall inflation, along with loan rates still on the high side, you’d think consumers would have struggled more, not less. But Cox Automotive analysts found increased incentives and consumer income growth balanced out the equation in February.

Average prices were up, jumping nearly 3½% year-over-year, Cox said, while the average loan rate was essentially flat at 9.5%. At the same time, incomes grew about 4%.

Meanwhile, the average monthly loan payment was flat at $756, and the median number of weeks of income needed to buy the average new car barely budged at 35 weeks.

The mitigated affordability pressure didn’t mean many consumers didn’t struggle to buy new. Sales fell for the month.

“With inflation above the Fed’s target, many households are facing financial stress from rising food, fuel and healthcare costs compounded by an uncertain job market, making vehicle affordability a persistently complex challenge for the industry,” said Cox Auto analyst Jonathan Gregory.  

The senior director, economic and industry insights acknowledged that the monthly market picture wrapped up before the U.S. and Israel waged war against Iran on the last day of February. The action has already sent loan rates up and dampened consumer sentiment, Gregory said.

Meanwhile, used-vehicle sales increased about 6% year-over-year as consumers looked for more affordable rides, Cox reported.

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