New cars were just as affordable in March as they were in February. That’s remarkable news after a year in which they became increasingly difficult to afford.
Affordability is not only measured by price. The Cox Automotive/Moody’s Analytics Vehicle Affordability Index measures the number of weeks the average earner would have to work to pay off the average new car. (Cox Automotive is the parent company of Kelley Blue Book.)
The average American would have to work 42.9 weeks to pay off the average new car in March.
Car prices fell slightly in March, with an average sales price of $45,927 for new cars, down from a peak of more than $47,000 in December.
But other factors worked against buyers. Interest rates went up. The incentives were gone. Which combined to increase the average monthly payment to a record $691.
Read: Does driving an electric car really save money? A cheap skate runs the numbers
The affordability of new vehicles was much worse in March than a year ago, when prices were lower and incentives higher. The estimated number of weeks of median income needed to buy the average new car in March was 18% higher than last year.
This story originally ran KBB.com.