New-Vehicle Affordability Is Up
June conditions, including best average loan rate in a year, make buying more likely.
Four percent year-over-year income growth was one factor putting new vehicles in closer reach for consumers.
Pexels/Torsten Dettlaff
Buying a new vehicle was more in reach last month, thanks to improved economic conditions.
Cox Automotive observed that the average loan rate dropped 13 basis points to its lowest of the past 12 months: 9.83%. That combined with about 4% year-over-year income growth to make such a big purchase more realistic.
“Dealers and manufacturers became less aggressive with pricing due to widespread software disruptions,” said Cox Automotive Chief Economist Jonathan Smoke said in a press release. “Despite this, consumers benefited from rising incomes and lower interest rates, keeping overall affordability better than last year.”
After peaking in December 2022 at $795, the average monthly auto loan payment was flat at $756, along with the median number of weeks of income necessary to buy the average new vehicle: 37, which is down 6% year-over-year.
Originally posted on Auto Dealer Today
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 →
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.
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 →