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Auto Affordability Remains Near Index Best, Says Comerica Chief Economist

The purchase of an average-priced new vehicle took 22.1 weeks of median family income in the second quarter 2009, according to Comerica Bank's Auto Affordability Index.

by Staff
August 18, 2009
1 min to read


DALLAS — The purchase of an average-priced new vehicle took 22.1 weeks of median family income in the second quarter 2009, according to Comerica Bank's Auto Affordability Index.

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.

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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 $300 to $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 normalization 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."

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