New vehicles became more affordable in March, according to Cox Automotive-Moody’s Analytics.

The Vehicle Affordability Index estimates that the average monthly payment fell 1% month-over-month to $754 after peaking in December at $791.

The improvement, along with more manufacturer incentives, rising consumer incomes, and a lower average new-vehicle loan rate, contributed to rising new-model sales, Cox said.

The resulting average loan payment dipped to its lowest since September, Cox said, as the estimated number of median weeks of income necessary to buy the average new model fell from 43 to 42.4, though that was up 5% from a year earlier.

Cox said the average new-model transaction price decreased to just over $48,000 and under the manufacturer’s suggested retail price for the first time in 20 months, according to Cox’s Kelley Blue Book. The MSRP fell by 1%.

Meanwhile, Cox said the median income increased 0.3% and manufacturer incentives reached their greatest volume in a year.

Of course, “affordable” is relative in post-pandemic times.

“Even with three consecutive months of improvement, affordability challenges are limiting access to the new-vehicle market by lower income and lower credit quality buyers, said Cox Automotive Chief Economist Jonathan Smoke.

“Subprime lending in the new market has decreased substantially since 2019, and deep subprime has disappeared. This trend induces automakers to focus on profitable products for consumers who can afford to buy, which keeps less affluent consumers out of the new-vehicle market altogether and limits what is available and possible in the used market for years to come.”

LEARN MORE: Report Paints Stark Affordability Picture