- Only one state has seen a positive change in car prices
- Used cars are becoming less affordable
- Why is New Hampshire seeing a rise in new car affordability?
Buying a new car is stressful enough, but as you try to figure out how you’ll pay for it, your nerves may become incredibly frayed. It’s even worse when you consider used car prices, which are increasing. It does appear that things may be looking up for car buyers in one state, however. Here’s what we found out.
Buying a new car is more expensive than ever before in most places | J. Conrad Williams Jr./Newsday RM via Getty Images
Only one state has seen a positive change in car prices
Out of all 50 states, only New Hampshire has seen a change in new vehicle prices that gives buyers a reason to celebrate. It’s not much of a change, however. According to iSeeCars, New Hampshire saw a 1% increase in affordability for new cars.
In 2019, the affordability index was 101.60. In 2022, it was 102.61. It’s not much of a change, but when you look at other states, this is good news indeed. There were 18 states that saw a decrease in the affordability index by over 10%. Alaska faired the worst with a decrease of 19.4%.
While this may shed New Hampshire in a positive light, things aren’t looking quite so bright when you look at used car prices.
Used cars are becoming less affordable
Between 2019 and 2022, New Hampshire has seen a 17.1% decrease in the affordability of used vehicles. The affordability index in 2019 was 115.86. In just two short years, this decreased to 96.05.
In spite of these alarming numbers, New Hampshire is still in good shape when compared to other states. In fact, out of all 50 states, it comes in fourth place when it comes to the affordability of used vehicles. Oregon comes in first, as it saw a mere drop of 13.1%. Idaho comes in second with a decrease of 14.0% and Vermont comes in third with 16.2%.
The state with the worst decrease in affordability was North Dakota. It saw a decrease of 31.1%. There are only six states with a decrease of less than 20%.
This could be due to an increased demand for used cars thanks to several factors such as the chip shortage, and fewer cars being produced during the Pandemic. This doesn’t explain why New Hampshire is seeing an increase in the affordability of new cars, however.
Why is New Hampshire seeing a rise in new car affordability?
This is where things get tricky, as we try to figure out why exactly New Hampshire is seeing a positive change, while the rest of the US is not. There are several factors that could be at play here, which we’ll discuss. The simplest way to figure this out, however, is to check out how iSeeCars gets its data.
According to iSeeCars,
“MethodologyiSeeCars 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.”
There is a clear correlation between the median population, and how much they make. This will also depend on the cars they are able to afford, and the current prices for those models. Other factors could depend on the specific location, as car prices can vary greatly across states.
Regardless, New Hampshire may be seeing the beginning of light at the end of the tunnel. As for the rest of the United States, we’ll just have to remain hopeful that things turn around soon.
Keyword: There’s Actually 1 State Where New Cars Are More Affordable Than Before