Comerica: Auto Affordability Reaches New Index Best
DALLAS - The purchase and financing of an average-priced new vehicle took 21.9 weeks of median family income in the third quarter of 2009, according to Comerica Bank's Auto Affordability Index. The third quarter reading improved 0.6 of a week, pushing the latest Index reading to the best affordability on record.
Median family income was roughly unchanged in the third quarter. The average total cost of a light vehicle, however, fell by $800 to $25,500. The drop mostly reflected a 2.4 percent decline in the average amount spent on a new car.
"The impact of the Cash for Clunkers program cannot be isolated in the data that we use to construct our Index," said Dana Johnson, chief economist at Comerica Bank. "However, the average amount that consumers spent on new vehicles in the third quarter was the lowest since early 2004.
“That along with the monthly pattern of sharp declines in July and August strongly suggests that the federal rebate program was largely responsible for the improvement in affordability this past quarter. In all likelihood, affordability will deteriorate modestly in the current quarter now that these rebates are unavailable," Johnson added.
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