New Cars a Tad More Affordable
May averages show that combined circumstances gave auto consumers slightly better buying power for the month, though average prices were up year-over-year.
Pexels/kaboompics.com
May’s flat new-vehicle prices and consumer income growth offset a small loan interest rate bump, Cox Automotive said.
The average transaction price declined half a percentage point from April to $49,220 as the estimated average auto loan rate inched up eight basis points to 9.5%. Average prices were up 1% year-over-year.
Meanwhile, consumer incomes rose 4% year-over-year, and vehicle purchase incentives were up about 6% to hit 7% of the average transaction price, Cox reported.
The combined conditions meant that the number of weeks of median income necessary to buy the average new vehicle was down 3% year-over-year. Month-over-month, that number fell very slightly from 35.2 to 34.9. That’s down sharply from its December 2022 peak of 42, when monthly new-car payments averaged $795.
On average, consumers committed to monthly car payments of $753 in May. Though down half a percentage point from April, that’s up by about the same amount year-over-year, Cox data shows.
More Auto Finance
Automotive Consumers Sink Further in Debt
Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.
Read More →
Porsche Financial Services Shifts Structure
After 36 years with Porsche, the Financial Services Chief Financial Officer Konrad Riedl is retiring, and the department is realigning its management structure.
Read More →
Tariffs Could Raise Insurance Premiums
As U.S. import tariffs affect repair costs, consumers might find it more affordable to replace a damaged vehicle, according to recent Insurify tariff analysis.
Read More →
Smaller Loans, Longer Terms
The youngest generation of car buyers is more likely to finance less expensive vehicles, more than half of generation Z consumers borrowing less than $25,000.
Read More →
First-Quarter Sees Long Auto Loan Growth
Experian data show more consumers are tapping the method, along with refinancings, to afford buying. Meanwhile, subprime borrowers are getting more access.
Read More →
Mastering Credit Friction
In this video, Josh Krach explains how to turn credit friction into an advantage.
Read More →
April Less Affordable
Based on prices, reduced incentives and slower household income growth, consumers found it more challenging to buy new last month, Cox Automotive reported.
Read More →
Auto Lenders, Consumers on a Tightrope
April borrowing data shows that more consumers are bending over backward to buy vehicles, though subprime lending cooled off for the month.
Read More →
Toyota Financial Services President Replaced
Scott Cooke has served in various roles with Toyota Financial Services for over 20 years, including president and CEO, which he retires from on June 30.
Read More →
Permission or Approval: When to Notify Finance Sources
Credit card down payments, multiple vehicle purchases and even straw purchases can be completed without committing bank fraud, as long as you tell the bank first.
Read More →