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ReprintsStudy: Income rises faster than average auto price
Jack Herman
Automotive News
May 9, 2007 - 4:00 pm ET
DETROIT -- The average vehicle purchase is taking a smaller chunk of the family income than it did last year, according to a study released today. A new light vehicle purchased at the average price paid by consumers in the first quarter cost 24.7 weeks of the median family income, down 1.5 weeks from the fourth quarter of 2006, according to the Auto Affordability Index compiled by Comerica Bank. At this time last year, the index was at 25.2 weeks of the median family income. "Consumers reacted to the sluggish economy, the rebound in gasoline prices and the softness in home prices by spending about $550 less per car than they did in the fourth quarter," Comerica's chief economist, Dana Johnson, said in a press release. Johnson also attributed the increased affordability to the availability of more generous financing deals and increased competition among car companies. On average, consumers paid $28,200 in the first quarter for a new light vehicle, including financing, up 1.6 percent from a year ago, the study says. But the median family income has grown an estimated 3.7 percent in that same period, the study says. The study factors in consumer spending on light vehicles and the terms available on auto loans. It uses the average transaction price for new vehicles as compiled by the U.S. Department of Commerce. You may e-mail Jack Herman at jherman@crain.com |
You can reach Jack Herman at autonews@crain.com.
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