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.
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