Attention car, truck, SUV, and van shoppers! Are you dreaming of a new ride but worried about affordability? We’ve got some good news! After a temporary setback in April, car buying is becoming more accessible, making now a potentially great time to snag your ideal vehicle.
But before you race to the dealership, let’s dig deeper into what “affordability” truly means when buying a car, truck, SUV, or van.
Affordability Beyond the Sticker Price:
The sticker price might grab your eye, but it’s just one piece of the puzzle. True affordability hinges on how long it takes you, the average buyer, to pay off your loan. Most of us finance our vehicles, so interest rates play a major role. Even with enticing dealer discounts, high interest rates can lead to hefty monthly payments.
Introducing the Vehicle Affordability Index:
That’s when the Vehicle Affordability Index comes in. This valuable tool measures how many weeks the average earner needs to pay off a typical car loan. It factors in crucial aspects like interest rates, loan terms, and average income, giving you a clearer picture of affordability.
Affordability is on the Rise!
For most of the past decade, the index hovered between 33 and 36 weeks. The pandemic disrupted this trend, pushing the number as high as 41 weeks. However, May saw a welcome decline to 37.1 weeks, representing a 2% improvement year-over-year!
Reasons to Celebrate:
Several positive developments contributed to this shift:
- Improved Incentives: Dealers are offering more attractive deals on new vehicles across the board, from cars and SUVs to trucks and vans.
- Lower Interest Rates: Average auto loan rates dipped slightly in May, marking the lowest point in 11 months. This translates to potentially lower monthly payments.
- Income Growth: Average income continues to rise, helping offset potential increases in loan costs.
As a result, the average monthly car payment has decreased to $752, down from its peak of $795 in December 2022.
Trucks.com: Your One-Stop Shop for Finding Your Perfect Ride
Ready to explore your options for a new car, truck, SUV, or van? Here at Trucks.com, we’re dedicated to helping you find the perfect vehicle at the right price, no matter your preference. Utilize our powerful search tools to compare deals, features, and availability across your local area.
Visit Trucks.com today and let’s get you rolling in the car, truck, SUV, or van of your dreams!