New-Vehicle Affordability Dips
April tariff winds buffet consumers, ending upswing in conditions.
While income growth held steady for the month, it wasn’t enough to offset about a 3% increase in the average new-vehicle price, along with a dip in incentives.
Pexels/Erik McIean
Affordability of new vehicles dipped in April after improving over the first quarter. Cox Automotive blamed U.S. trade tariffs for pulling conditions back down after they’d reached a nearly four-year best.
March had brought the best affordability in just under four years, according to Cox, but a fluctuating mix of trade tariffs shifted conditions for buyers.
The month brought higher new-vehicle prices and lower incentives while the average loan rate was about flat, though 92 basis points lower year-over-year.
The average new-vehicle payment rose 3% to $753, its highest since December, increasing the number of median weeks of income needed to buy the average new vehicle by a week to 37, Cox said.
Though the average payment was still well off the December 2022 peak of $795, it’s a turn in the wrong direction for consumers.
While income growth held steady for the month, it wasn’t enough to offset about a 3% increase in the average new-vehicle price, along with a dip in incentives, Cox said.
Affordability was still better than a year earlier, when it took 39 weeks of income to buy new. At the time, prices were 1% less while interest rates were higher and incomes and incentives lower.
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