The purchase of an average-priced new vehicle in the US took 22.1 weeks of median family income in the second quarter 2009, according to Comerica Bank’s Auto Affordability Index.
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This reading is up 0.3 of a week, thereby representing a slight deterioration in affordability compared to the prior quarter. Median family income was essentially unchanged in the second quarter. The total cost of buying and financing a new car rose, however, due entirely to the fact that consumers chose to buy more expensive cars on average. The average price of a light vehicle purchased in the second quarter rose by US$300 to US$26,300.
“While consumers opted to buy more expensive vehicles last quarter, a sharp drop in financing costs held down our affordability index,” said Dana Johnson, Chief Economist at Comerica Bank.
“Reflecting the partial normalisation of credit markets, the average rate paid on a car loan at finance companies was only 3.45 percent last quarter, the lowest level seen in five years. In the current quarter, our affordability index very possibly will reach a new best reflecting the cash-for-clunkers program that is now in place.”
The Comerica report incorporates the latest data on consumer spending on light vehicles and on the terms available on auto loans.
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