Monday, November 09, 2009

Auto Affordability Reaches Record High (21.9 Wks.)

Note: Left scale inverted.
DALLAS/November 9, 2009 – 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."

4 Comments:

At 11/09/2009 6:24 PM, Blogger juandos said...

An FYI courtesy of Anthony Watts, Chrysler dismantles electric car plans under Fiat

'The move by Fiat SpA marks a major reversal for Chrysler, which had used its electric car program as part of the case for a $12.5 billion federal aid package.

As late as August, Chrysler took $70 million in grants from the U.S. Department of Energy to develop a test fleet of 220 hybrid pickup trucks and minivans, vehicles now scrapped in the sweeping turnaround plan for Chrysler announced this week by Fiat CEO Sergio Marchionne
'...

 
At 11/09/2009 6:26 PM, Anonymous Benny The Real Man said...

Who buys new cars anyway?

 
At 11/09/2009 6:55 PM, Anonymous American Delight said...

Benny the Real Man said, "Who buys new cars anyway?"

Um, people who have been subsidized by our tax dollars to do so through cash-for-clunkers.

 
At 11/09/2009 8:44 PM, Anonymous Benny The Turh Man said...

I guess so. There are many cheap but good cars for sale now in Los Angeles. Cabinet shops are unloading all their equipment.
Wall Street is fearless. Obamacare means nothing to them--high for the year.
Hope better days are coming.

 

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