The average monthly new car payment has risen again in November 2022 amid rising interest rates and climbing average transaction prices (ATPs) industry-wide.
According to a Cox Automotive report, the average monthly payment for a new car reached a new record of $762 in November 2022, an increase of 1.8 percent from October 2022 and up a not-insignificant seven percent from the same time period last year. The average price paid for a new car last month across the entire automotive landscape stood at $48,681, up 0.9 percent from October 2022.
Two factors are helping consumers afford new vehicles: an uptick in the median income to the tune of 0.4 percent, as well as a modest increase in vehicle incentives. However, these were the only positive that assisted in affordability, as the number of median weeks of income needed to purchase the average new vehicle increased from 42.8 weeks in October to 43.3 weeks in November.
“As we entered December, the latest data show consumers’ views of buying conditions for vehicles improved and is at the second-best reading since March,” Cox Automotive Chief Economist, Jonathan Smoke, was quoted as saying. “Though auto credit access tightened sharply in November, and now we see vehicle affordability decline again, consumers remain resilient.”
These rising monthly car payments are growing in tandem with ATP. As a whole, the industry saw a 4.4 percent increase in ATP to $48,681 in November 2022. On the contrary, GM ATP numbers declined on a year-over-year basis. Including all four of GM brands that are offered in the U.S. – Chevy, Buick, Cadillac and GMC – the ATP for a new GM vehicle was $52,441 in November 2022, representing an almost two percent decline year-over-year.
Several factors are contributing to the increase in average transaction prices, including higher vehicle prices paid by consumers as a result of low vehicle incentives, high electric vehicle transaction prices, and a large percentage (18 percent) of luxury vehicle sales.