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An exciting indicator

March 2, 2012
In terms of the average American’s wage today, a new car has rarely been more affordable, and it is getting even more so, according to a long-compiled index by Comerica Inc., a Dallas-based banking company.
In the fourth quarter of 2011, it took 23.1 weeks of median family income to buy the average new car. That figure is the smallest it has been since the third quarter of 2009. Even in the better economy of the late 1990s, American families spent 29 to 30 weeks of income to purchase the average new car.
New cars, in other words, are within reach, and that’s a positive sign for automakers and the broader U.S. economy. Unlike simpler statistics—average new-car cost or the unemployment rate—Comerica’s figure accommodates changes in consumer confidence and tastes. Recent stronger job creation in the U.S. and falling personal debt mean that households increasingly are willing to assume a reasonable amount of debt to buy an attractively-priced car.