Auto Affordability Index Reaches 6-Year High
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DETROIT — According to Comerica Bank, consumers are likely reducing the average cost of vehicles by simply turning to smaller models.
Dana Johnson, chief economist of Comerica Bank, pointed to this as a possible trend after the latest auto affordability index came in at the best in six years.
The purchase of an average-priced new vehicle took 23.9 weeks of median family income in the first quarter, according to the index.
This latest reading is down 0.6 weeks from the fourth quarter and 1.1 weeks compared to a year ago.
Including finance charges, the total cost of buying an average-priced light vehicle came in at $28,389 in the first quarter, the company found.
"It's a buyers' market, and the producers are being forced to offer bigger discounts in one form or another," explained Johnson.
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"Buyers also are holding down their driving costs by choosing smaller, more fuel-efficient cars. That is reflected in the fact that the average amount spent on a new car, excluding financing costs, was only $24,627, the lowest quarterly average in 2.5 years," Johnson concluded.