Comerica: CARS Impacted 3Q Affordability Index
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DALLAS — Comerica Bank released its latest Auto Affordability Index this week and determined that the purchase and financing of an average-priced new vehicle dropped 0.6 of a week to roughly 21.9 weeks of median family income in the third quarter of 2009.
Executives pointed out, however, that median family incomes were basically unchanged during the quarter, but that the average total cost of a light vehicle fell by $800 to $25,500 due to the impact of CARS.
"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," she continued, noting that the price drop was around 2.4 percent.
"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," she said.
"In all likelihood, affordability will deteriorate modestly in the current quarter now that these rebates are unavailable," Johnson projected.
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