The purchase of an average-priced, new vehicle in the United States took 25.1 weeks of median family income in the second quarter, according to the vehicle affordability index compiled by Detroit-based Comerica Bank.
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This is the second consecutive decline in the index, which is down 1.3 weeks from the fourth quarter of 2005 and is at its lowest level in eight quarters.
Including finance charges, the total cost of buying an average-priced light vehicle was $US27,800 in the second quarter, up 2.8% from a year ago, while median family income rose about 4 25%.
“The average purchase price of a new vehicle – not including finance charges – has dropped $750 or about 3% over the past two quarters. With gasoline prices painfully high and financing costs also rising, the typical household reacted by opting for a less expensive model,” said the bank’s chief economist, Dana Johnson.
“Consumers appear to be spending more cautiously with growth slowing and house prices levelling off.”
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By GlobalData
