The Average Monthly New Car Payment Is Now More Than $700

Morning Dump Car Payment

The average new car payment blasts past the $700 mark, Porsche settles over emissions, Stellantis recalls some vehicles. All this and more in today’s issue of The Morning Dump.

Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.

Who Can Afford The Average New Car Payment?

car payment
Photo credit: yonkershonda licensed under CC BY-SA 2.0.

It’s no secret that the average new car transaction price has crept up during the pandemic, and as prices rise, so do loan payments. Cox Automotive and Moody’s Analytics just released their new vehicle affordability index for May, and the two firms state, “New-vehicle affordability in May is much worse than a year ago when prices were lower and incentives were higher.” So how much worse are we talking? Let’s break things down.

First, a quick word on how this new vehicle affordability index works, gleaning info from the official briefing. First, average new vehicle transaction price is amortized over a typical 72-month fixed-interest loan period, minus a 10 percent down payment. Lending rates from financing companies and credit unions are factored into this loan period to come up with a payment, then Moody’s compares the total of those payments to median household income. With that out of the way, let’s get to the big number – the average new car payment is now $712. More importantly, 41.3 weeks of household income are required to pay for the average new vehicle. Not individual income, household income. If this seems like an enormous jump over the past year or so, you’re absolutely right. According to the press release, “The estimated numbers of weeks of median income needed to purchase the average new vehicle in May was up 19 percent from last year.”

I won’t lie, I’ve bought whole cars for less than $712, so it’s a bit of a trip knowing the average new car buyer is shelling out $712 a month for six whole years. Granted, some of this could be skewed by availability – manufacturers are focusing on high-margin vehicles through this weird shortage of everything. However, it’s still a massive figure that seems to indicate affordability as something that’s slipping away. With future basis point hikes likely in store, new car affordability is probably going to get worse before it gets better. I mean come on, the average consumer has to hit a limit, right?

[Editor’s Note: I could buy a manual 4×4 Chevy Tracker literally every month. -DT]

Pagani Gets Weird

Pagani Huayra Codalunga
Photo credit: Pagani Automobili

Oh come on, who am I kidding? Pagani’s always been a bit weird. Seven-figure supercars made out of carbotanium with baroque interiors and screaming AMG V12s aren’t exactly normal by any stretch of the imagination. However, the new Huayra Codalunga takes Pagani’s weirdness to new heights, with an entirely new rear end reminiscent of old-school mid-engined race cars.

See, coda lunga is Italian for long tail, and the Huayra Codalunga’s tail is very long indeed. Honestly, I have mixed feelings on this one. The Codalunga is definitely less cohesive than a standard Huayra, but the new rear end is rather distinctive, and quite good on its own. See, the whole project is really a flex for Pagani’s Grandi Complicazioni special vehicles division, a proof of concept for what can truly be possible. As Pagani’s commercial director Hannes Zanon said in a statement,

“All Pagani products are born from visions and dreams, and some of the most iconic and exclusive Pagani cars stem from the vision and dreams of clients. In 2009, this led to one of the most iconic Zonda models, the Zonda Cinque. Pagani Automobili is capable of developing these bespoke projects for single clients, much like the Coachbuilders in the ‘60s, but in compliance with today’s international homologation requirements. Specifically, one of the five cars will be certified for the U.S. market.”

Honestly, if I had several clients with millions of dollars burning holes in their pockets who wanted something unique, I likely wouldn’t deny their requests either. According to Pagani, two customers commissioned this car, and only five units will be produced at a massive cost of €7 million each, or $7,332,325 at current conversion rates. While this is all well and good, I’m more interested in the next Pagani. See, the Zonda is a timeless piece of art, and the Huayra always felt like a bit of a caricature of the Zonda. Will Pagani make lightning strike again? Let’s wait and see.

Porsche Settles A Massive Lawsuit

Porsche 911 GT3 991.2
Photo credit: Porsche

Huh, looks like emissions and fuel economy tampering is back in the news. Who’d have thought? Yep, according to Reuters, Porsche has agreed to an $80 million settlement package over fuel economy and emissions test tampering on cars made between 2005 and 2020.

See, lawyers for Porsche owners claim that Porsche used taller axle ratios and special software to quietly boost fuel economy by one or two mpg and cut emissions in laboratory testing. The suit also alleges that Porsche new about inconsistencies in fuel economy data as early as 2015, but didn’t immediately report those findings to American regulators. As ever, it’s worth mentioning that a settlement isn’t an admission of guilt. Still, owners can expect to receive between $250 and $1,109 per vehicle, so long as a federal judge approves the agreed-upon settlement terms. Oh, and owners of cars with Sport Plus mode can expect an addition $250 and a software fix because Sport Plus mode caused vehicles to run afoul of emissions requirements. Honestly, I don’t see a huge issue with that last issue. It’s so rare for cars to be run in Sport Plus mode, so the impact seems negligible at best.

Stellantis Recalls More Than A Quarter Of A Million Vehicles

2017 Ram 1500 Laramie Crew Cab 4x4 Ecodiesel
Photo credit: Ram

Last up on The Morning Dump, a bit of recall news. Stellantis has issued two recalls, one for high-pressure fuel pump failure and one for backup camera issues. Combined, these recalls affect 256,404 U.S. market vehicles and hundreds of thousands more worldwide. Let’s break down these potential breakdowns.

First up, a massive recall for anything equipped with the second-generation EcoDiesel V6. According to recall documents, a flawed high pressure fuel pump (HPFP) design was used on this engine until late 2019, and these pumps can have a particularly destructive failure mode. Straight from the NHTSA report, “A HPFP failure may introduce internally failed component debris into the fuel system potentially causing fuel starvation.” Now, when a vehicle suffers from fuel starvation, a few things can happen. Not only might the engine run lean, but it may shut off entirely. More importantly, HPFP debris is a pain to clean up – just ask anyone who’s owned a BMW with an N54 turbocharged inline-six.

The bad pumps were found on 2014 to 2020 Jeep Grand Cherokee SUVs and 2014 to 2019 Ram 1500 pickup truck in the U.S. market, along with several commercial vehicles abroad. As such, Automotive News reports that 138,645 American-market vehicles, 55,711 Canadian vehicles, and 188,178 vehicles in other markets are affected by this particular recall. According to the recall report, “FCA US will conduct a voluntary safety recall on all affected vehicles to replace the HPFP, and inspect and, if necessary, replace additional fuel system components.” Expect owner notification letters to arrive around July 29. In addition, owners who’ve gone through the ordeal of HPFP failure will be compensated for repairs, so long as they can provide receipts to FCA US.

Secondly, 2022 Ram pickup trucks are reportedly having backup camera issues. According to the NHTSA recall report, “The vehicle operator will notice that the rearview image is not displayed if attempting to reference the image while backing.” Translation: you might not see a damn thing that’s directly behind your Ram pickup truck. Since accidentally reversing over people is bad, 117,759 American-market trucks have been recalled and are expected to receive a software update to fix this issue. Automotive News reports that 4,576 Canadian trucks and 240 trucks in other countries are similarly affected, not massive numbers but not insignificant ones either.

The Flush

Whelp, time to drop the lid on today’s edition of The Morning Dump. Happy Friday, everyone! The weekend is almost here. With that in mind, I’d love to hear what fun automotive things you have planned. Whether you’re swapping an engine, watching the Montreal Grand Prix, or simply going for a drive to get some ice cream, car time is generally a good time.

Lead photo credit: “Row of Cars at a Car Dealership” by everycar_listed_photos is marked with CC BY-SA 2.0.

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58 Responses

  1. Reading the Cox / Moody’s page on how they created the affordability matrix shows they are committing one of the most deadly sins of statistics – mixing median with mean. They are using the mean vehicle transaction price but the median household income.

    The mean family income (from the St. Louis Fed) was $114,962 in 2020. The median household income was $67,521. This makes a HUGE difference when you are calculating how many months of income it takes to pay the loan.

  2. I’m one of those $700/month car payment people but my actual cost is a lot less. I recently purchased a Polestar 2 EV. It was ~55k OTD. The thing is it saves me ~$400 in fuel costs. I figured for what it would cost me to get a run of the mill ICE car I could get something much nicer for the same money.

  3. “I’d love to hear what fun automotive things you have planned”

    My club’s TROG car was invite to Eyes on Design at the Edsel Ford Mansion this past weekend. I spear-headed to the effort since I was the current caretaker. It was a great day of hobnobbing and making some noise during a typically reserved lawn show.

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