Higher prices and steeper interest rates made it more difficult to afford a new car in June, according to data from Kelley Blue Book parent Cox Automotive. The latest numbers reveal that a combination of lower incentives, higher prices, and stubbornly high interest rates continue to put pressure on new-vehicle shoppers.
Buyers paid an estimated average interest rate of 9.58% in June, up from 9.53% in May, while the average monthly payment increased 0.7% to $763, an increase of 0.5% year over year but down from the high of $795 seen in December 2022. The median number of weeks of income needed to purchase a new car climbed slightly to 35.3, up a tick from 35.2 weeks in May.
This might sound gloomy, but the overall picture was slightly better in June than it was during the same month in 2025. Interest rates were lower than the year before, and incomes were more than 4% higher. Additionally, the 35.3 weeks of income needed to buy a car in June 2026 were down 3.4% from 2025.
For car shoppers on a tight budget, deals are still out there. June’s lofty $49,758 average transaction price was driven by more expensive vehicle segments, such as full-size trucks and large SUVs. Transaction prices for smaller pickup trucks, sedans, and SUVs fell well below that average, with compact cars reaching just $27,978 last month.
If you’re looking for a new car and have budget concerns, shopping for smaller vehicles could save you a significant amount of money. While some may genuinely require the extra space and capability of a more expensive vehicle, many shoppers end up buying more car than they need.
There’s some positive news for shoppers of electric vehicles (EVs). The average transaction prices for EVs continue to fall, down 4.5% from 2025, to $56,238, and automakers are spending nearly double the industry average on EV incentives.
