New-vehicle affordability declined modestly in April as consumers faced higher prices, rising interest rates and reduced incentives, according to the latest Cox Automotive/Moody’s Analytics Vehicle Affordability Index.
The index showed the estimated average auto loan rate increased by nine basis points to 9.45 per cent in April, while the Kelley Blue Book average transaction price climbed 0.7 per cent month over month to $49,461. Incentives also declined during the month.
At the same time, household income growth rose 0.3 per cent month over month, but not enough to offset the higher cost of financing and vehicle pricing. The affordability index increased one per cent to 35.2, representing the number of median weeks of income needed to purchase the average new vehicle.
The typical monthly payment for a new vehicle rose 1.3 per cent from March to $757. While payments remain below the all-time high of $795 recorded in December 2022, affordability pressures persist for many buyers.
Cox Automotive said affordability improved compared with April 2025 despite higher prices. Transaction prices were up 1.8 per cent year over year, but loan interest rates declined by 21 basis points and incentives increased 3.5 per cent over the same period. Household incomes also rose four per cent year over year.
As a result, the estimated number of weeks of median income required to purchase the average new vehicle fell 2.8 per cent compared with a year earlier, even though monthly payments were up one per cent annually.
The Vehicle Affordability Index is updated monthly using government and industry data, including pricing information from Kelley Blue Book. The next report is scheduled for release on June 15.
