New cars are expensive enough to put them out of reach for many budgets, but the available data do not prove that most Americans cannot afford any new car. In December 2025, the average new vehicle cost $50,326 and carried a typical monthly payment of $767, according to Cox Automotive. Those are market averages—not a price quote or affordability verdict for an individual household.
What the affordability numbers actually show
Cox Automotive’s Vehicle Affordability Index uses government and industry data, including Kelley Blue Book pricing, to compare vehicle prices with income and financing conditions. For December 2025, it measured the average new vehicle at 36.22 weeks of median income, alongside a $50,326 average transaction price and a $767 typical monthly payment. The index’s average-interest-rate input assumes a 72-month fixed-rate loan.
That 36.22-week figure is an index measure, not a claim that a particular person can buy a car after saving or working for that many weeks. It uses median income and an average vehicle; it does not account for each household’s taxes, rent, debts, down payment, insurance, fuel or charging, and maintenance.
The picture also depends on the comparison period. Cox reported that wages rose 3.5% year over year in December 2025 while average new-vehicle prices rose 0.7%. Its affordability measure improved 3.2% from a year earlier, although the month-to-month result was essentially unchanged. High prices can coexist with improving measured affordability when incomes and financing conditions move more favorably than prices. Cox Automotive’s December 2025 affordability report explains the index and its monthly results.
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Kelley Blue Book’s September 17, 2026 search-result excerpt put the typical monthly payment at $770 in August 2026, up 2.6% year over year. The page could not be accessed directly, so treat this as lower-confidence corroboration rather than a substitute for the directly reported December 2025 index figures. Kelley Blue Book’s August affordability item is the cited page.
Why lower-priced new cars can be hard to find
The average transaction price does not tell you what the cheapest new car costs, but the available listings suggest that the low-price end has narrowed. The Associated Press reported in April 2026 that CarGurus estimated about 13% of new-vehicle listings were below $30,000, compared with 40% five years earlier. The figures describe listing shares, not the share of buyers who can afford a car.
AP attributed pressure to preferences for larger, more expensive vehicles, fewer inexpensive models, desired features and trim packages, pandemic-era supply disruption, tariffs, and insurance and repair costs. It also reported that shoppers were turning to used vehicles, where the share of listings below $30,000 had declined as well. These are market explanations reported by AP and its cited sources, not a household-specific affordability calculation. Read the Associated Press report on car prices and affordability.
What a longer loan changes—and what it does not
Stretching a loan over more months can reduce the payment shown on a monthly budget, but it generally means paying interest for longer and can extend the period when the loan balance exceeds the vehicle’s value. A lower payment alone does not establish that a car is affordable.
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The Federal Reserve Board, citing Experian Velocity data, reported that in 2023 Q3, 13.6% of new auto loans and 10.5% of used auto loans had terms of 84 months or longer. These are historical figures, not a measure of 2026 loan prevalence. The Fed also notes that dealer add-ons can be financed into a loan and may be costly or poorly understood; review the itemized contract rather than assuming every add-on is worthwhile. The Federal Reserve’s auto finance overview discusses loan terms, borrowing costs, negative equity, and add-ons.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How to compare a new car, cheaper model, and used car
Compare realistic offers on the same terms. A used vehicle is not automatically the cheaper choice, and an advertised price or monthly payment leaves out costs that can change the decision.
| Compare | Why it matters |
|---|---|
| Out-the-door price | Includes taxes and fees, making offers more comparable than sticker prices alone. |
| Down payment | Affects how much you borrow and the payment; consider how much cash remains for emergencies. |
| APR and loan term | Determine the cost and duration of financing. A longer term may lower the monthly payment while increasing total interest and negative-equity exposure. |
| Monthly payment and total paid | Check both the recurring bill and the total of payments plus down payment over the loan. |
| Insurance quote | Premiums vary by vehicle and driver, so obtain a quote for the specific car before committing. |
| Maintenance, repairs, and warranty | Compare expected upkeep and repair exposure, along with what warranty coverage remains. |
| Fuel or charging cost | Estimate energy costs for your driving needs rather than relying on a vehicle’s purchase price alone. |
| Expected years of ownership | Ownership plans affect how you weigh upfront cost, financing, warranty, and likely repairs. |
Ask for written, vehicle-specific figures and compare them against your household budget. The right answer depends on the price, financing offer, operating costs, and how much room remains for other obligations—not on whether a national average sounds affordable.
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