Friday, May 13, 2011

Auto Affordability holds steady

 Consumers were voluntarily paying more for new vehicles duringthe first quarter of 2011, according to a new survey by Comerica Bank. However, the purchase and financing of an average-priced new vehicle took 23.2 weeks of median family income in the first quarter of 2011, unchanged from its fourth quarter 2010 level, the bank's quarterly survey said.  Consumers on average spent $400 more, or 2 percent more than in the previous quarter, on new cars in the first three months of 2011.  The average rates on car loans during the quarter increased to 4.7 percent, the highest average since the first quarter of 2009.  "The total cost of purchasing a new vehicle increased approximately $425 in the first quarter of 2011, as consumers opted for more expensive cars against a backdrop of rising rates," said Dana Johnson, Chief Economist at Comerica Bank in Dallas.  "Looking ahead, affordability has the potential to erode as financing costs and consumer appetites for more expensive vehicles increase."


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