--- title: It Just Got a Little Easier to Afford a New Car description: Lower prices and new car incentives made vehicles more affordable in January — the first time in six it got easier to afford a new car. authors: - name: Pete Grieve role: Lead News Reporter url: https://money.com/author/pete-grieve/ bio: Pete Grieve is a personal finance reporter. In his time at Money, Pete has covered everything from car buying to credit cards to the housing market. education: University of Chicago, BA Political Science at_money_since: 2022 articles: 602 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes social: - https://twitter.com/pete_grieve - https://linkedin.com/in/pete-grieve-b5aa02138 - https://www.facebook.com/petegrieve4 editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2023-02-15T21:14:54.000Z' modified: '2024-01-10T17:50:10.000Z' section: Economy and Politics tags: - cars - News word_count: 449 canonical: https://money.com/new-car-prices-more-affordable/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Woman shopping for a new car at a car dealership](https://img.money.com/2023/02/News-Cars-Are-More-Affordable.jpg) New cars became the slightest bit more affordable in January as prices declined and incentives increased. It now takes 44 weeks of median U.S. income to purchase the average-priced new vehicle, which is a drop from 44.7 weeks the month before, according to a new report from [Cox Automotive](https://www.coxautoinc.com/market-insights/january-2023-vai/), a research and consulting firm. The shift marks the first time in six months that new vehicles became more affordable. While the trend is promising, bear in mind that new cars remain much more out of reach to the typical buyer than they were a couple years ago, and that the decrease in costs is fairly negligible. The typical monthly payment on a new car was $780 in January, down from a record high of $788 in December. A year ago, the typical monthly payment was $685. Monthly payments have soared to a “different stratosphere” thanks to [rising new car prices](https://money.com/average-new-car-price-record-high/) and high [auto loan interest rates](https://money.com/best-auto-loan-rates/), Jonathan Smoke, chief economist at Cox, said in the report. Two years ago, it only took about 32 weeks of income to buy the average new car. Smoke says it’s encouraging that affordability finally improved in January, and he anticipates the auto market stabilizing or improving for buyers going forward. - Auto loan rates reached the highest level in two decades in January, but a decline in the average sale price of a new car and larger incentives brought monthly payments down. - In January, the [average price of a new vehicle](https://mediaroom.kbb.com/2023-02-13-Luxury-Share-of-U-S-Market-Sets-New-Record-in-January,-as-Transaction-Prices-Remain-Up-5-9-Year-Over-Year,-According-to-Kelley-Blue-Book) declined from an all-time high in December, falling by $310 to $49,388, according to Kelley Blue Book, a subsidiary of Cox. Average incentives from manufacturers increased to 2.8% of the average vehicle price in January, up from 2.7% the month before. - The inventory of new vehicles is steadily improving, which could be the reason for slightly lower prices and more incentives. ## Keep in mind While new vehicles are extremely expensive right now, [used car prices](https://money.com/used-car-prices-decrease-2023-forecast/) have declined significantly in the past year, and the trend continued in January. - Used car and truck prices are down 1.9% in the past month and down 11.6% in the past year, according to the January [consumer price index](https://www.bls.gov/news.release/cpi.t02.htm) (CPI). That compares to a 5.8% increase in new vehicle prices in the past year. ## Bottom line New cars got slightly more affordable in January, but they're still unaffordable for many Americans. The used car landscape is more friendly for buyers, but high loan rates are still a huge obstacle. [7 Best Car Loan Rates of 2023](https://money.com/best-auto-loan-rates/) [The Price of the Average Electric Car Dropped Over $3,000 Last Month](https://money.com/average-electric-car-price-drop-tesla/) [You Can Now Get a Car ‘Subscription’ Instead of Buying or Leasing. Should You?](https://money.com/should-you-get-a-car-subscription/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/new-car-prices-more-affordable/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Economy and Politics", "item": "https://money.com/economy-and-politics/" }, { "@type": "ListItem", "position": 3, "name": "Auto Industry", "item": "https://money.com/auto-industry/" }, { "@type": "ListItem", "position": 4, "name": "It Just Got a Little Easier to Afford a New Car" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/new-car-prices-more-affordable/#webpage", "url": "https://money.com/new-car-prices-more-affordable/", "name": "It Just Got a Little Easier to Afford a New Car", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-02-15T21:14:54.000Z", "mainEntity": { "@id": "https://money.com/new-car-prices-more-affordable/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/new-car-prices-more-affordable/#breadcrumb" }, "dateModified": "2024-01-10T17:50:10.000Z" }, { "@type": "NewsArticle", "headline": "It Just Got a Little Easier to Afford a New Car", "articleSection": "Economy and Politics", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/02/News-Cars-Are-More-Affordable.jpg", "width": 5550, "height": 3700, "caption": "News-Cars-Are-More-Affordable" } ], "author": [ { "@type": "Person", "name": "Pete Grieve", "url": "https://money.com/author/pete-grieve/", "@id": "https://money.com/author/pete-grieve/#author", "description": "Pete Grieve is a personal finance reporter. 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