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New cars most affordable since 1980

November 18, 2010

Shrinking unemployment and only slight increases in new-car prices have made new vehicles the most affordable since 1980, NADA Chief Economist Paul Taylor said last week.

 

Though real economic growth will decline a bit in 2007, to 2.5 percent from this year’s average 2.9 percent, Taylor said he expects new-vehicle affordability to continue to attract customers next year. Taylor said that would help to maintain 2007 sales at nearly this year’s level.

 

The price of an average-priced new vehicle in third-quarter 2006 represented 23.6 weeks of median family income, the Comerica Bank Auto Affordability Index reported. It is the third consecutive decline in the quarterly index.

 

In the third quarter, the average-priced light vehicle cost $26,500 (including finance charges), down 5 percent from a year ago. Meanwhile, median family income rose about 5 percent in the past year.

 

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