New Cars Continue to be Affordableby Steve Cypher on Tuesday, December 11th, 2012
Third quarter report from Comerica Bank shows that the good news for car buyers continues even for those with credit problems as the amount of income it takes to buy a new car remains stable
Buying new cars
Even car buyers financing with bad credit auto loans can sometimes qualify for a new car and, if they do, it’s important that they understand the market if they plan on taking this step instead of considering buying used.
At Auto Credit Express we realize this is important because for over twenty years we’ve been helping car shoppers with credit problems find new car dealers that can offer them their best opportunity for approved auto loans. In order to give consumers an understanding of the high risk auto loans process we also created a resource section on our website that contains videos that cover topics such as auto loans that rebuild credit.
Today, however, we’re going to take a look at something more timely: the recently-released report from Comerica Bank that shows the continuing affordability of new cars, based on information gathered during the third quarter of 2012.
New car affordability
Every three months Comerica Bank releases a report it calls its “Auto Affordability Index.” This report compares the median family income in the U.S. to the purchase price of an average-priced new car to determine how many weeks it would take to cover the cost of buying and financing one. The most current results, according to a press release issued today, are as follows:
The purchase and financing of an average-priced new vehicle took 23.1 weeks of median family income in the third quarter of 2012. Consumers on average spent $75 less on new cars in the third quarter of 2012 compared with the second quarter of 2012.
“Auto affordability improved by 0.2 weeks of median family income, enough to boost Q3 auto sales to a 14.9 million unit rate in September,” said Robert Dye, Chief Economist at Comerica Bank in Dallas. “Income growth through Q3 was weak, but interest rates on auto loans fell, lifting affordability. Given the combination of pent-up consumer demand and the need to replace vehicles destroyed by Hurricane Sandy, vehicle sales spiked to a 15.5 million unit rate in November. Sales may ease a bit in coming months, but ample credit availability and a low rate environment remain positives for the auto market. Downside risk from the Fiscal Cliff is significant for auto sales and many other U.S. economic variables through the first half of 2013.”
As we see it
The bottom line to Comerica’s latest report is that new cars continue to be affordable and, if there’s a chance you’ve been waiting on the sidelines for just the right moment to jump in, that time, according to Comerica’s Auto Affordability Index, seems to be now.
But if poor credit scores or a credit denial from a traditional lender has been holding you back from making the plunge, you should know that Auto Credit Express specializes in matching consumers with car credit problems with those new car dealers that can offer them their best opportunity at auto loan approvals.
So if you’re ready to reestablish your auto credit, you can begin now by filling out our online auto loans application.