These Six Cars Are No Longer Affordable
The dream of owning a new car is becoming increasingly challenging for many consumers. The latest iSeeCars Car Affordability Index reveals a significant shift in the affordability landscape. In just a year, six popular new car models have transitioned from being considered affordable to unaffordable. This shift underscores the growing financial burden on consumers striving to purchase a new vehicle in the ever-changing automotive market.
The iSeeCars Car Affordability Index
iSeeCars, an automotive data and research company, regularly calculates its Car Affordability Index for both new and used cars and electric vehicles (EVs). This index assesses the financial feasibility of purchasing vehicles based on median household income compared to the idealized income for car payments. A score of 100 signifies that the idealized income for car payments aligns perfectly with household income. Values above 100 indicate that household income surpasses the idealized income for car payments, while values below 100 suggest that household income falls short of this idealized income.
The Downward Shift in Affordability
Between October 2022 and September 2023, the iSeeCars Car Affordability Index experienced a notable downward shift. The index dropped from 78.51 to 73.17, marking a 6.8 percent decrease in affordability. The majority of this decline occurred before June 2023, with new car affordability showing signs of stabilization in recent months but failing to recover substantially. This trend coincided with a significant increase in monthly car payments, rising by 11.3 percent from $802 to $892, equating to an additional annual cost of $1,088 for consumers.
The Six New Cars No Longer Considered Affordable
The iSeeCars study identified six new car models that have shifted from being deemed affordable in October 2022 to becoming unaffordable by September 2023. These vehicles, once well below the average new car price, now pose a financial challenge for prospective buyers. Here are the six cars, along with their respective statistics:
Toyota Prius Prime
- % Price Difference Above the Affordability Threshold: 10.5%
- % Price Increase from Oct. 2022: 20.9%
- Average New Car Price 2023: $40,015
Hyundai Tucson Hybrid
- % Price Difference Above the Affordability Threshold: 8.1%
- % Price Increase from Oct. 2022: 7.3%
- Average New Car Price 2023: $39,163
Volkswagen Golf GTI
- % Price Difference Above the Affordability Threshold: 4.5%
- % Price Increase from Oct. 2022: 10.7%
- Average New Car Price 2023: $37,855
Acura Integra
- % Price Difference Above the Affordability Threshold: 3.0%
- % Price Increase from Oct. 2022: 3.7%
- Average New Car Price 2023: $37,302
Ford Bronco Sport
- % Price Difference Above the Affordability Threshold: 2.3%
- % Price Increase from Oct. 2022: 1.8%
- Average New Car Price 2023: $37,041
MINI Hardtop 2 Door
- % Price Difference Above the Affordability Threshold: 1.2%
- % Price Increase from Oct. 2022: 2.6%
- Average New Car Price 2023: $36,662
National Sept. 2023 Affordable New Car Price Threshold
To determine affordability, iSeeCars establishes an affordable new car price threshold. In September 2023, this threshold was set at $36,217.
Overall
The latest iSeeCars Car Affordability Index paints a concerning picture for consumers looking to purchase a new vehicle. With a significant drop in affordability and six popular car models transitioning from affordable to unaffordable, the financial strain on potential buyers has intensified. As monthly car payments continue to rise, it is clear that the landscape of new car affordability has become a challenging terrain to navigate. Consumers must carefully evaluate their budgets and financial goals when considering a new car purchase in this evolving automotive market.
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This article was co-written using AI and was then heavily edited and optimized by our editorial team.
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