The Cox Automotive/Moody’s Analytics Vehicle Affordability Index measures the ability of a household to earn an average income to afford a mid-priced vehicle.
In October, it showed that the average earner would need to work 42.8 weeks to pay off the average new car.
Cox Automotive is the parent company of Kelley Blue Book.
Average earnings grew 0.4% in October, but all other factors affecting affordability moved against consumers. The average rate rose, and interest rates rose to reflect another increase in the federal funds rate.
“High rates are really shifting access to cars and financing toward wealthier consumers,” said Jonathan Smoak, chief economist at Cox Automotive. “Affordability will be challenged for years to come in both the new and used markets. It’s not the Fed’s fault, but it will affect consumer access to transportation.”