According to the Cox Automotive/Moody's Analytics Vehicle Affordability Index, new-vehicle affordability showed slight improvement in April, which led to an increase in new-vehicle sales.

According to Cox, the factors contributing to the improvement included:

• Lower new-vehicle prices

• Higher incentives from manufacturers

• Improved incomes, which counteracted a rise in the average new-auto loan rate.

The typical monthly payment fell to its lowest level since October, finds Cox data. In April, the number of median weeks of income required to purchase an average new vehicle decreased from 43.2 in March to 42.9.

The reasons for the trend, according to Cox, included:

• Median income growing 0.3% in April

• Manufacturers offering more incentives (the highest level in a year)

• The average new-vehicle transaction price declining slightly.

However, the average new-vehicle loan interest rate increased by three basis points to 9.52%.

With the changes, the estimated typical monthly payment decreased by 0.3% to $766 compared to $769 in March. The average monthly payment peaked at $792 in December.

Cox Automotive Chief Economist Jonathan Smoke saod that despite slight improvement in the index, affordability challenges still pose a significant obstacle in the new-vehicle market. He noted that subprime buyers are being excluded from the market because of the Federal Reserve's repeated interest rate hikes. With 10 consecutive rate increases, vehicle purchases are now limited mostly to high-income consumers with high credit scores.

New-vehicle affordability was worse than a year earlier. The estimated number of weeks of median income required to purchase an average new vehicle in April increased by 4.9%.

The Cox Automotive/Moody's Analytics Vehicle Affordability Index is updated monthly using the latest data from government and industry sources, including key pricing data from Kelley Blue Book, a Cox Automotive subsidiary. The index serves as an important industry measure and is released in the middle of each month to show whether prices of new vehicles are becoming more or less affordable for consumers.

The next Cox Automotive/Moody's Analytics Vehicle Affordability Index will be published on June 15.