Have you every stopped to wonder, “Are car sales up or down this month? Am I an outlier, or is my experience reflective of the industry as a whole?”
Cox Automotive and Moody’s Analytics announced the companies collaborated on a new metric. It is designed to measure consumer spending power for new motor vehicles.
Information from industry and government sources make up what the companies call Vehicle Affordability Index. Going forward, Cox and Moody’s will update figures in the middle of each month.
Furthermore, the figure shows the weeks of income needed to afford a new car. For example, the first update showed October’s figure at 33.13. That is the highest point this year. In summation, the date will indicate how much car sales go up or down.
In addition, Jonathan Smoke is a Chief Economist for Cox Automotive:
“Until now, the industry lacked visibility into consumer spending power and interest rate changes relative to the movement of new vehicle prices. The Cox Automotive/Moody’s Analytics Vehicle Affordability Index is filling this void by providing a comparative way to measure affordability while eliminating guesswork and prognostication.”
“Looking ahead, we expect new vehicle affordability to continue decreasing over the next months without further federal fiscal policy action,” said Michael Brisson, Auto Economist at Moody’s Analytics. “The COVID-19 pandemic is intensifying at an alarming rate, dampening consumer demand, putting continued stress on the labor market, and depressing incomes. Despite falling interest rates, dropping incomes may push new vehicles out of reach for the average consumer.”
Dealer Shop Talk will provide updates on this statistic.