Auto Affordability Slipped In Fourth Quarter, Comerica Bank Reports
DALLAS--March 20, 2013: The purchase and financing of an average-priced new vehicle took 23.6 weeks of median family income in the fourth quarter of 2012, according to Comerica Bank's Auto Affordability Index. Consumers on average spent $900 more on new cars in the fourth quarter of 2012 than they did in the third quarter.
"Auto affordability slipped slightly in the fourth quarter of 2012, declining by 0.4 weeks of median family income," said Robert Dye, Chief Economist at Comerica Bank in Dallas. "Driving the decrease in affordability was a combination of slightly higher interest rates and an increase in the average consumer expenditure per new car. Although median family income was also estimated to have increased, this increase was not enough to offset the rise in rates and expenditures. Vehicle sales through January have held up well although there has been a distortion in the recent sales data due to Hurricane Sandy. 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. 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."
This report incorporates the latest data on consumer spending on light vehicles and on the terms available on auto loans. The full history of the Index is available upon request. Some historical data is in the process of being revised by the data sources and, as a result, revisions to the auto affordability series are expected in the months ahead.