After reaching its best level in 45 months in March, new-vehicle affordability fell in April despite a strong economy, due to the impact of tariffs, according to the Cox Automotive/Moody’s Analytics Vehicle Affordability Index released May 15.

“New-vehicle affordability declined in April to the worst level yet this year as the bite of higher prices and lower incentives turned around an improving trend,” said Cox Automotive chief economist Jonathan Smoke in a news release. “After steady improvements in affordability throughout 2025, we saw a significant setback in April with median weeks of income needed to buy an average new vehicle increasing by a full week.”

The estimated average auto loan rate increased slightly in April by four basis points to 9.77%, 92 basis points lower than the previous year. The average new-vehicle price increased 2.5% for the month. Income growth remained relatively strong but was insufficient to offset the effects of higher prices and lower incentives, according to Kelley Blue Book. 

In April, the average payment rose 3% to $753, marking the highest monthly payment since December, despite a 1.6% drop from the previous year. The median weeks of income needed to purchase the average new vehicle increased to 37.3 weeks from a downwardly revised 36.3 weeks in March. The average monthly payment reached a peak of $795 in December 2022.

New-vehicle affordability in April was better than a year ago, when it took 39.1 weeks of median income to buy an average new vehicle, which was 4.6% higher. A year ago, prices were 1.1% lower, but interest rates were higher. Incomes and incentives were also lower in April 2024.