Affordability in the new-car market picked up in May, thanks to increased incentives, a drop in auto loan rates, and continued income growth.
The improvements were reflected in both month-over-month and year-over-year comparisons.
New Cars Within Easier Reach
Affordability metrics improved in May as lending costs ebbed, finances flowed more freely.
June 19, 2024
The average new-vehicle loan rate fell in May to its lowest in 11 months.
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Pexels/Tom Fisk
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Cox Automotive estimates that the average new-vehicle loan rate fell by 22 basis points to 9.98%, its lowest in 11 months.
The factors pushed the average monthly loan payment down by 1% to $752 after peaking in December 2022 at $795.
As incomes grew about 4% year-over-year, the number of weeks of median income needed to buy the average vehicle fell by about half a week to some 37 weeks, down 6% year-over-year, Cox said.
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