New Cars Prove Difficult to Afford
Jan. 20, 2023—In December the average new car buyer assumed a monthly payment of $777, according to Kelley Blue Book.
KBB says the combination of high interest rates and high new car prices is to blame for making new cars difficult to afford. The Cox Automotive/Moody's Analytics Vehicle Affordability Index "measures how much of an American’s working life goes toward car payments." Cox Automotive is the parent company of KBB. The index shows that by the end of December 2022, "the average earner needed to work 44 straight weeks to pay off the average new car."
KBB reports that the index grew 7% in 2022, and if these trends continue during 2023 Americans may have to work what amounts to almost a year to pay off the average new car purchase amount. But as the supply of unsold cars continues to grow, there is a possibility of some discounted rates to come.