(iSeeCars) – Car prices have increased as a result of changes in consumer behavior, supply chain issues, and other effects of the pandemic; however, household incomes and wage growth have not kept pace. According to the latest iSeeCars.com analysis, these price increases have resulted in drops in car affordability: new car affordability has dropped 13.3% from August 2019 to August 2022, while used car affordability has dropped 26.7% over the same period.

iSeeCars analyzed new and used car affordability over time by calculating its Car Affordability Index, which compares median household income to an idealized income for financing a car. An index value of 100 suggests household income is exactly equal to the idealized income for a car purchase. Values above 100 indicate household income is more than the idealized income and therefore cars are affordable; similarly values below 100 suggest actual income is less than the idealized income, meaning cars are unaffordable. For example, an index value of 125 means household income is 25 percent more than the idealized income, and an index value of 75 means household income is 25 percent less. The idealized income is based on typical car loan rates and terms (60 months for new cars and 36 for used cars), as well as an assumption that car payments should be no more than 10 percent of a household’s annual income.

“Due to supply chain shortages and increased demand, the rising prices of new and used cars have outpaced income growth,” said iSeeCars Executive Analyst Karl Brauer. “From August of 2019, well before the pandemic lockdowns started, to August of 2022, new car prices increased by almost 29 percent, and three-year-old used car prices increased by 52 percent, but incomes increased by only 13%. People still need to replace their vehicles, so the resulting drop in affordability means shoppers are either taking longer loan terms and paying higher interest rates, putting down less money for a down payment, or even forgoing the kind of car they originally wanted for a lower cost model in order to make ends meet.”

New Car Affordability

iSeeCars analyzed new car affordability over time beginning in April 2019 through August 2022.  The iSeeCars Car Affordability Index had an average value of 88.8 through 2019, dropping to an average of 85.1 in 2020 and 84.3 in 2021, and finally an average of 79.1 in 2022 through August. “New car affordability remained relatively constant until the supply chain shortages in 2021, which have caused a more rapid decline in affordability over the past 18 months,” said Brauer. 

New Cars that are No Longer Affordable

Using its Car Affordability Index, iSeeCars calculated the pricing threshold for affordable cars and analyzed new cars that were affordable between April and December 2019, before the pandemic, and were no longer affordable as of January to August 2022. Four models met these criteria.

New Cars That Are No Longer Affordable –  iSeeCars Study
RankVehicleNew Car Price August 2019New Car Price August 2022
1Jeep Cherokee$29,316$39,030
2Kia Sorento$30,476$39,570
3Chrysler 300$30,146$39,767
4Nissan Frontier$27,146$39,833
National Affordable New Car Price$32,702$36,221

“The Jeep Cherokee and the Nissan Frontier had relatively low demand in their segments, but a lack of new car inventory raised the demand for these previously slow-selling vehicles,” said Brauer. “The Kia Sorento was redesigned in 2021 and had a $2,450 increase in MSRP, and the Chrysler 300c limited edition has commanded high dealer markups in recent months.”

Used Car Affordability

iSeeCars also analyzed the affordability of three-year-old used cars, beginning in April 2019 through August 2022. The iSeeCars Car Affordability Index averaged an almost perfect 99.5 in 2019, dropping to averages of 93.4 in 2020, 81.8 in 2021, and finally 72.0 in 2022. “Used cars were affordable in 2019, but affordability began dropping after the beginning of the pandemic lockdowns, around March of 2022. The drop in affordability accelerated in 2021,” said Brauer. “This coincides with higher used car prices and the lack of used car inventory due to the decrease in new vehicle production, which ultimately led to used car shoppers paying more for their desired vehicles.”

Used Cars that are No Longer Affordable

Using its Car Affordability Index, iSeeCars calculated the pricing threshold for affordable cars and analyzed three-year-old used cars that had been affordable between April and December 2019 but were no longer affordable from January to August 2022. The list includes some of the most popular models, such as the Toyota Camry and RAV4, the Honda Accord and CR-V, and the Subaru Forester and Outback. Here are the 33 vehicles that meet the criteria in ascending order of used car price in August 2022.

Used Cars That Are No Longer Affordable
RankVehicle3yo Used Car Price August 20193yo Used Car Price August 2022
1Jeep Compass$15,706$25,605
2Jeep Cherokee$19,104$26,927
3Kia Sorento$18,785$27,013
4Chrysler 300$20,120$27,137
5Volkswagen Tiguan$16,149$27,238
6MINI Hardtop 4 Door$17,832$27,403
7Toyota Camry$16,548$27,404
8Hyundai Santa Fe$20,406$27,406
9Acura ILX$17,651$27,655
10MINI Hardtop 2 Door$17,239$27,708
11GMC Terrain$18,731$27,793
12Subaru Crosstrek$20,242$27,916
13Nissan Pathfinder$21,469$28,358
14Mazda CX-5$19,323$28,464
15Honda Accord$17,461$28,847
16Nissan Frontier$20,872$28,943
17Subaru Forester$19,743$29,759
18Subaru Outback$21,652$30,018
19Audi A3$19,079$30,059
20Mini Clubman$18,549$30,145
21Honda CR-V$19,599$30,193
22Ford Edge$22,372$30,423
23Nissan Maxima$20,697$30,547
24Volkswagen Golf GTI$19,827$30,868
25MINI Countryman$19,570$31,318
26MINI Convertible$21,679$31,779
27Toyota RAV4$20,534$32,056
28Toyota Prius$19,601$32,090
29Acura TLX$21,073$32,360
30Ford Mustang$21,516$33,500
31Volvo S60$19,907$34,615
32Chevrolet Traverse$22,335$34,751
33Toyota Avalon$21,956$35,137
National Affordable Used Car Price$22,906$25,542

Two Jeeps lead the list, including the Jeep Compass and the Jeep Cherokee. “The supply of these compact Jeep models easily met demand before the pandemic, but their demand outstripped supply after new car shortages forced Jeep buyers looking for a new model to consider used versions,” said Brauer.

The midsize Kia Sorento and Hyundai Santa Fe also make the list. “The Hyundai Santa Fe was redesigned for the 2019 model year, while the Kia Sorento was redesigned in 2021,” said Brauer. “The heightened demand for redesigned models was due in part to the improving perception shift and consistently strong value of the Hyundai/Kia vehicles. The resulting increase in price for these models contributes to their decrease in affordability.”

Two MINI models also make the list, including the MINI Hardtop 4 Door and the MINI Hardtop 2 Door. “These vehicles likely saw heightened demand due to the rise in gas prices, resulting in their price increases over the past year,” said Brauer.

Also making the list is the Toyota Camry sedan. “A rise in gas prices and scarcity of SUVs has led to an increase in popularity for sedans like the Toyota Camry,” said Brauer.

“The rise in new and used car prices has led to a drop in vehicle affordability for consumers,” said Brauer. “That means it’s more important than ever for shoppers to choose vehicles that fit their budget. And while it may be tempting to take out a longer loan to minimize monthly payments, or to make a smaller down payment, buyers will end up paying even more for these higher-priced cars in the long run.”


iSeeCars calculated its Car Affordability Index for new and used cars monthly from April 2019 to August 2022. The Car Affordability Index was calculated as the ratio between median household income (obtained from the U.S. Census Bureau’s American Community Survey (ACS) one-year estimates and projected using the U.S. Bureau of Labor Statistics’ Earnings reports) and an idealized income for car payments, based on new cars’ and three-year-old used cars’ pricing. An index of 100 means the idealized income for car payments exactly matches household income; values above 100 mean household income is greater than the idealized income for car payments, while values below 100 mean household income is less than the idealized income. Car payments were estimated using Bankrate.com’s published auto loan interest rates and loan terms, and the idealized household income was estimated assuming car payments should be no more than 10% of a household’s annual income. The iSeeCars Car Affordability Index was calculated for new and three-year-old used cars both nationally and by state.