Car buyers with poor credit applying for an auto loan that qualify for a new car should be aware of the latest quarterly report from Comerica Bank
Consumers with problem credit that apply for a car loan and subsequently qualify for a new car should understand the market if they plan on taking this step instead of choosing a used car.
Here at Auto Credit Express we realize the importance of this because for the past two decades we’ve been helping bad credit buyers searching for online car loans find new car dealers that can offer them their best chances for car loan approvals.
And although our website contains a resource section that helps explain the high-risk car loan process, today we’re going to take a look at a subject that’s a bit timelier than that: the most recent report from Comerica Bank that covering the affordability of new cars, based on information gathered during the fourth quarter of 2012.
New car affordability
Every three months Comerica Bank releases a report it calls its “Auto Affordability Index.” The 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 back in March, are as follows:
The purchase and financing of an average-priced new vehicle took 23.6 weeks of median family income in the fourth quarter of 2012. Consumers on average spent $900 more on new cars in the fourth quarter of 2012 when compared to the third quarter of 2012.
“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.”
The Bottom Line
As we see it Comerica’s latest report services notice that the cost of new cars to consumers, although they continue to be affordable, is rising. At the same time, for consumers that have been waiting on the sidelines for just the right moment, that time may be now as these vehicles are becoming less affordable as time passes.
At the same time, if poor FICO scores or a credit denial from a traditional lender have been holding you back from making a purchase decision, we want you to know that Auto Credit Express matches consumers with car credit problems to new car dealers that can offer them their best chances for approved car loans.
So if you’re ready to reestablish your auto credit, you can begin now by filling out our online car loan application.