While to some it might not feel like new car prices have dipped much recently, a new market study by Cox Automotive claims February was the most affordable they’ve been in some time. This information has some wondering if now’s the time to buy before there’s a sudden change in the market.
New Dodge Chargers and Challengers are piling up at dealerships.
Using the Cox Automotive/Moody’s Analytics Vehicle Affordability Index, the conclusion was drawn that new vehicles haven’t been this affordable since July 2021 or in 31 months. Note the term “affordable” instead of citing the average price of new cars.
But does this mean vehicles are actually getting cheaper? One of the measures Cox cites is the average car payment amount dipping 0.7% in February. It also claims the median for the number of weeks of income a shopper needs to purchase the average new car dropped from 37.4 weeks in January to 37.1 weeks in February.
All this doesn’t necessarily mean vehicle prices have dropped, just monthly payments and how much those consume out of some people’s income. With more people working second and even third jobs just to make ends meet, thanks to everything from housing to food prices surging, this might not be the great news some are claiming it is.
By choosing which data points to cite, we can craft all kinds of stories about what’s going on with the market. But let’s face it, MSRP on a 2024 Toyota Corolla, what used to be referred to as an “economy car,” is $22,050. It wasn’t that long ago you could pick up a base model for well under $20,000.
The same thing has happened across the car market. While used prices have come down, they seem to be falling less rapidly now, especially with those who lent money to the government free of interest using their tax returns to scoop up what they believe to be deals right now.
Image via Chevrolet
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