MenuMENU
SearchSEARCH

Affordability Improves Again in August

New-vehicle purchases a little easier on the wallet despite high prices, interest rates.

September 15, 2023
Affordability Improves Again in August

Bigger incomes and increased incentives helped consumers better afford still-high prices and high interest rates.

Credit:

IMAGE: Pixabay/Raten Kauf

1 min to read


Affordability in the new-vehicle market kept getting better in August, but the United Auto Worker Union strike – given it’s against all three big Detroit brands – could change that, Cox Automotive said Friday.

Buying new has gradually improved all year after the long erosion during the pandemic, when tight inventories pushed up prices to record highs.

Last month, bigger incomes and increased incentives helped consumers better afford still-high prices and high interest rates, Cox said. Prices and the average new-vehicle payment were up, but the weeks of median income needed to buy the average new model fell to 42.1 from 42.2 both in July and a year earlier.

The strike, just as industrywide inventories were moving toward prepandemic levels, could throw a wrench in the affordability balancing act.

“History has shown that an average UAW strike does not disrupt the retail automotive business, but this version may not be ‘average’ given that there’s never been a strike impacting all three major automakers at the same time,” said Cox Chief Economist Jonathan Smoke.

Median incomes increased modestly by 0.3% as the average loan interest rate was flat at its 9.62% peak, said Cox, which estimates that the average monthly new-car payment rose 0.2% to $760; it peaked in December at $795. The average transaction price rose 0.6% to $48,451.

LEARN MORE: New-Vehicle Prices Hold Steady

 

More Dealer Ops

Dealer Opsby Hannah MitchellAugust 26, 2025

Franchises, Throughput Down in First Half

A handful of states see franchise growth through June, while EV sales per store boost overall business in U.S.

Read More →
Dealer Opsby Hannah MitchellAugust 19, 2025

Buy-Sells Up in Q2

Kerrigan metrics show there’s plenty of demand, though many sellers are waiting to pull the trigger.

Read More →
F&Iby StaffApril 2, 2025

DOWC Powers the Future of F&I for NESNA

Company is providing a fully integrated F&I administration model to Nissan Extended Services North America’s dealer network.

Read More →
Ad Loading...
Industryby StaffMarch 26, 2025

March New-Vehicle Sales Healthy

Despite incentive spending not keeping pace with deliveries volume, consumers make their purchases ahead of tariffs impact.

Read More →
Product & Technologyby StaffMarch 13, 2025

New DOWC Program Debuts

Hybrid solution combines benefits of reinsurance and dealer-owned warranty companies.

Read More →
Trainingby StaffJanuary 13, 2025

Dealer Survey Finds Anxieties

Kerrigan Advisors poll shows percentage of retailers expecting lower profits, valuations is on the rise.

Read More →
Ad Loading...
Industryby StaffDecember 23, 2024

Calif. Dealer Group Challenges Scout Direct Sales

Says VW unit’s plans to sell directly to consumers violate state law.

Read More →
IndustryNovember 27, 2024

Six Powerful Questions

Take the time to answer these and lay the groundwork for a successful year-end.

Read More →
Dealer OpsOctober 14, 2024

Autumn Analysis

Consider taking the change of the seasons as a cue to evaluate some key operational aspects of the dealership.

Read More →
Ad Loading...
Dealer OpsAugust 20, 2024

Maximizing Revenue Potential

The strategic imperative for auto dealers is to prioritize F&I product sales and wealth-building in challenging times.

Read More →