The purchase and financing of an average-priced new vehicle took 23.2 weeks of median family income in the first quarter of 2012. Consumers on average spent $300 more, an increase of 1.2 percent, on new cars in the 2012 first quarter compared with the fourth quarter of 2011.
Robert Dye, chief economist of Comerica Bank in Dallas, explained that auto affordability was down slightly in the first quarter, but remains very high by historical standards, contributing to the upward trend in auto sales visible from mid-2011 through early 2012.
“Job creation has supported slow-to-moderate income growth, while car prices have increased moderately and interest rates have remained low. Households have paid down debt, and that has created space in household budgets, allowing many families to take advantage of the current high affordability of new cars. Easing gasoline prices through the current second quarter will also help auto sales,” Dye said. “These favorable trends are helping consumers to feel more confident about unleashing their pent-up demand for automobiles.”