With Average New Car Price at $48,000 Here’s What the Average Buyer Will Pay Per Month
Published 9:09 am Monday, June 12, 2023
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The average new vehicle payment stands at $48,000 as of March, 2023, according to Kelly Blue Book.
Yet as any auto buyer knows that’s not the complete cost of buying a new car, truck, or SUV.
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Take a car buyer with decent credit – around a 700 FICO score. According to Grit Capital, a financial information publisher, a vehicle buyer may get a five-year auto loan with a 6.40% in the current credit and rate environment.
“That’s a $936 monthly payment before insurance and maintenance,” tweeted Genevieve Roch-Decter, chief executive officer at Toronto-based Grit Capital on June 9, 2023. “This is what an affordability crisis looks like.”
The financial pressure on auto buyers won’t abate anytime soon.
Toyota North America Jack Hollis recently told Automotive News new vehicle prices should crest $50,000 by the end of 2023. Compare that to the median U.S. income of $45,470 and it becomes increasingly apparent that just like the rising price of American homes, the skyrocketing price of autos is also leaving millions of U.S. households out of the new vehicle market.
There is some good news on the auto purchase front.
While new vehicle prices were up in May, the year-over-year increase of 3% is the smallest increase so far in 20233, according to Kelly Blue Book. In May, 2022, for example, new vehicle prices rose by 13.5% from the same month in 2021.
Additionally, auto dealers are turning to manufacturers’ incentives to attract new buyers. Dealer incentives rose by 3.9% in May, to $1,914, according to KBB.
