Comerica Bank: Auto Affordability Down in Fourth Quarter
Consumers spent an average of $900 more on new cars in the fourth quarter 2012 than they did in the third quarter, according to Comerica Bank's Auto Affordability Index.
DALLAS — Auto affordability slipped slightly in the fourth quarter 2012, declining by 0.4 weeks of median family income, according to Comerica Bank's Auto Affordability Index.
Consumers spent an average of $900 more on new cars in the fourth quarter than they did in the third quarter. The purchase and financing of an average-priced new vehicle took 23.6 weeks of median family income during that time.
"Driving the decrease in affordability was a combination of slightly higher interest rates and an increase in the average consumer expenditure per new car,” said Robert Dye, chief economist at Comerica Bank. “Although median family income was also estimated to have increased, this increase was not enough to offset the rise in rates and expenditures.”
Despite the effects of Hurricane Sandy, vehicle sales through January held up well, Dye added. “Sales surged after Hurricane Sandy to a 15.5 million unit rate in November and have since dipped to a 15.2 million unit rate by January,” he said. “Downside risk from cuts in federal spending still lurks for auto sales and many other U.S. economic variables through the first half of 2013."
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