Americans who bought a new car in October signed up for an average monthly payment of $748 — a new record. The average new car sold for $48,281 last month — nearing a record set in August.
The Cox Automotive/Moody’s Analytics Vehicle Affordability Index measures the ability of a household earning the median income to afford an average-priced automobile.
In October, it showed the average earner would have needed to work 42.8 weeks to pay off the average new car.
Cox Automotive is the parent company of Kelley Blue Book.
Median income grew by 0.4% in October, but every other factor affecting affordability moved against consumers. The average price increased, and interest rates rose to reflect another increase in the federal funds rate.
“Higher rates are already shifting access to vehicles and financing towards wealthier consumers,” said Cox Automotive Chief Economist Jonathan Smoke. “Affordability will be challenged for years to come in both the new and used markets. It’s not the Fed’s fault, but it will impact consumer access to transportation.”
