Car Prices Further Outpace Drivers' Income

The average household was less able to buy a new car in June than in May as car prices rose far more than other goods from May to June and incomes fell, according to a report by Cox Automotive.

The Cox Automotive/Moody’s Analytics Vehicle Affordability Index released Thursday showed it took households 37 weeks of pay to buy the average new vehicle in June, up from 35.5 weeks in May and above the 2020 high of 35.3 weeks in October 2020 and the most number of weeks since 2012, the starting point for the index, which the research companies introduced in November 2020.

“New-vehicle affordability was much worse than a year ago when prices were lower, incentives were much higher and government stimulus support was larger,” the report said. “Offsetting some of the inflation, the average financing rate decreased, which helped to limit what would have been an even higher increase in the monthly payment.”