Monthly car payments hit record high of $712 in May

Average monthly car payments hit a record high in May while the cost of new vehicles continues to rise, according to industry insiders.

A report from Moody's Analytics found that typical monthly car payments hit a record high of $712 in May. Kelley Blue Book data found that new vehicle prices averaged $47,148 in May, the second highest on record.

Vehicle affordability worsened again because of higher interest rates and increased car prices, according to a recent Cox Automotive & Moody's Analytics vehicle affordability index report. The report said "the estimated typical monthly payment increased 1.7% to $712," which is a new record high for monthly payments.

It would cost 41.3 weeks of median income to buy a new vehicle, which is a jump of 19% from May of 2021, according to the report.

Brian Moody, executive editor for Kelley Blue Book, told ABC News that a low supply of cars and high demand from buyers means consumers "are going to be paying more" than the MSRP. Data from Kelley Blue Book suggests non-luxury car buyers paid on average $1,030 more than the sticker price.

For luxury cars, where experts say there is a lot of demand, buyers are paying an average of $65,379 for a new vehicle, about $1,071 above sticker price, according to Kelley Blue Book data.

But Moody said customers can still get good deals on less sought-after brands like Mazda, Hyundai and Buick.

And prices could even drop later this year, he noted.

"Although prices are up for May, it's only 1%, and so that indicates ... we may be headed toward a place where the prices will start to decrease," Moody said.