- The typical American earner would need to work 36.22 weeks to afford the average new car in December – essentially unchanged from the month before.
- Cars got more expensive last month, but wage gains helped offset that.
The price of the average new car hit a record high last month, with buyers paying an average of $50,326.
But wage gains helped keep affordability stable.
We measure affordability in terms of working time. Few Americans can buy a new car with cash. Most of us borrow to buy, and work to pay off the loan.
So the Cox Automotive/Moody’s Analytics Vehicle Affordability Index measures how long the average earner would need to work to pay off the average new car loan. Kelley Blue Book parent company Cox Automotive publishes the metric.
Related: Is Now the Time to Buy, Sell, or Trade-In a Car?
In December, it sat at 36.22 weeks – almost unchanged from November’s 36.24.
The index has almost returned to pre-pandemic norms. It hovered between 33 and 36 weeks for most of a decade before the COVID-19 pandemic disrupted global supply lines and reset Americans’ price expectations.
The average buyer last month signed up for a monthly payment of $767, up 0.3% from November but below the December 2022 record of $795.
