Auto Affordability Improves Slightly, Comerica Reports
By Michelle Krebs August 9, 2007The purchase of an average-priced new vehicle took 24.6 weeks of median family income in the second quarter, according to the Auto Affordability Index compiled by Comerica Bank in Detroit.
The latest reading is down 0.1 week from the first quarter, and is also down 1.1 weeks compared to a year ago.
Including finance charges, the total cost of buying an average-priced light vehicle was $28,479 in the second quarter, essentially unchanged from the prior quarter or from a year earlier. The median family income is estimated to have increased 4.2 percent from a year ago.
âThe cost of buying and financing a new light vehicle did not change much in the second quarter,â said Dana Johnson, chief economist at Comerica Bank. âThe average amount spent on a new vehicle fell $50 in the second quarter after dropping $450 in the first. The average financing rate for a car loan edged up 8 basis points to 4.86 percent. With gasoline prices high and house prices weak, the typical consumer continued to opt for relatively affordable cars and light trucks last quarter.â
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