Comerica: Consumers Spending Less, Extending Terms
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DETROIT — According to the latest analysis from Comerica Bank, an average-priced new vehicle required 24.4 weeks of median family income in the fourth quarter.
The Auto Affordability Index from Comerica Bank discovered that the latest reading is down 0.5 weeks from the third quarter and 1.8 weeks compared with a year ago.
Including finance charges, the total cost of buying an average-priced light vehicle was $28,715 in the fourth quarter.
"We estimate that the median family income has increased 4.1 percent from a year ago," officials noted.
Consumers reacted to the challenging economic environment by spending about $300 less on average for a new car and by extending the average term by two months to 63 months, the bank found.
"A 37-basis-point reduction in the interest rate on car loans at finance companies also helped reduce the cost of owning a new car," officials explained.
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"With the economy weak and interest declining, consumers are likely to find even better deals on new cars over the first half of 2008," they concluded.
For more information, visit www.comerica.com.