New-vehicle affordability edged down in October for a three-month streak of declines as automakers pulled back sharply on incentives.
Weeks of income necessary to buy the average new vehicle rose to nearly 36½, Cox Automotive reported. The average monthly loan payment increased nearly half a percentage point to $766 for its highest point in 16 months and up 1% year-over-year.
The continued erosion in affordability – in September it reached its lowest point since last December – came despite healthy consumer income growth of 3.5% year-over-year and modest transaction price declines, Cox said. Essentially flat average auto loan interest rates, at about 9.5%, also didn’t help compensate for the incentives pullback.
Affordability was still slightly better than a year earlier, when it took 37 weeks of income to buy new, though transaction prices were up 2% from a year earlier after barely budging from September’s record-high ATP of more than $50,000, Cox said.
