DETROIT -- Consumers' monthly payment amounts are climbing to dangerous heights as vehicle transaction prices and interest rates continue to rise, according to Cox Automotive.
The average new-vehicle payment last year -- $533 per month -- exceeded 10.2 percent of the median household income in the U.S., Cox noted.
Jonathan Smoke, chief economist at Cox Automotive, told reporters here that new-vehicle monthly payments of more than $600 are alarming, and they are driving up the average.
"Americans can't afford to spend 10 percent on total transportation," Smoke said. "If it's more than 10 percent to buy a single vehicle, how do you handle the average of two vehicles per household?"
Last year, 46 percent of new vehicles were sold with monthly payments of more than $500, according to data from Dealertrack, a Cox Automotive company.
The rise in monthly payments comes as new-vehicle buyers flock to the truck and SUV market, and the share of new vehicles sold at lower price points declines rapidly.
"There is no question affordability influences things. It corresponds to a massive shift that we've seen in the types of vehicles being sold," Smoke said.
Shifts in consumer preference from sedans to crossovers and trucks drove down the number of new-vehicle transactions under $30,000 in 2018. Market share at that price point dropped to 34 percent last year. In 2012, nearly half of the new-vehicle sales were sold at that amount.
Vehicles priced under $20,000 are almost disappearing. Their market share dropped to 2 percent in 2018 from 7 percent in 2012.
Meanwhile, vehicles priced at $50,000 and above rose to 23 percent of the new-vehicle sales market last year, compared with 6 percent in 2012.