Auto Affordability Improved in 4Q 2011, Comerica Bank Reports
A report by Comerica Bank indicated that the purchase and financing of an average-priced new vehicle took 23.1 weeks of median family income in the fourth quarter of 2011, the best affordability reading since the third quarter of 2009.
DALLAS — A report by Comerica Bank indicated that the purchase and financing of an average-priced new vehicle took 23.1 weeks of median family income in the fourth quarter of 2011, the best affordability reading since the third quarter of 2009.
Consumers on average spent $1,050 less on new cars in the fourth quarter, a 4 percent drop.
"Auto affordability improved at the end of 2011, boosted by gains in personal income that were, in turn, supported by stronger job creation," said Robert Dye, chief rconomist of Comerica Bank in Dallas. "Household credit conditions also are improving, as shown by the low household financial obligations ratio, which measures total debt payments as a percentage of income. When you put those two concepts together, it means that households are increasingly willing to take on a reasonable amount of debt by purchasing an attractively priced automobile."
The report incorporates the latest data on consumer spending on light vehicles and on the terms available on auto loans. For more information, visit http://www.comerica.com.
More Auto Finance
Dealerships Are Paying the Price for Extended Car Loans
Growing negative-equity scenarios mean such lengthy terms should be addressed in a forward-looking way to make them work for the dealer and the consumer down the road.
Read More →
Trade-Ins in Negative Equity Reach New Heights
As such trade-ins rise in frequency, so do monthly loan payment amounts and interest rates, according to second-quarter data compiled by Edmunds.
Read More →
Auto Credit Plentiful
June numbers show lenders are readily granting access, including to risky borrowers, as consumers leverage themselves to take on high prices.
Read More →
Automotive Consumers Sink Further in Debt
Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.
Read More →
Porsche Financial Services Shifts Structure
After 36 years with Porsche, the Financial Services Chief Financial Officer Konrad Riedl is retiring, and the department is realigning its management structure.
Read More →
Tariffs Could Raise Insurance Premiums
As U.S. import tariffs affect repair costs, consumers might find it more affordable to replace a damaged vehicle, according to recent Insurify tariff analysis.
Read More →
Smaller Loans, Longer Terms
The youngest generation of car buyers is more likely to finance less expensive vehicles, more than half of generation Z consumers borrowing less than $25,000.
Read More →
New Cars a Tad More Affordable
May averages show that combined circumstances gave auto consumers slightly better buying power for the month, though average prices were up year-over-year.
Read More →
First-Quarter Sees Long Auto Loan Growth
Experian data show more consumers are tapping the method, along with refinancings, to afford buying. Meanwhile, subprime borrowers are getting more access.
Read More →
Mastering Credit Friction
In this video, Josh Krach explains how to turn credit friction into an advantage.
Read More →