All About Japan Autos

Advices About Autos

Cars are more affordable now than at any other point in more than a quarter century..

Kicking Tires explains, "Economists at Comerica Bank have found that cars are more affordable now than they have been in 28 years." Comerica’s annual Auto Affordability Index study finds that the average sale price of a new car has declined when compared to the average American income this year.

According to the San Diego Source, that means "the purchase of an average-priced new vehicle took 23.1 weeks of median family income in the second quarter…down 0.9 weeks from the previous quarter and 1.9 weeks compared to a year ago. It is also the fewest number of weeks of work to purchase a new car since 1980." The numbers, however, exclude finance charges.

In a press release, Comerica Chief Economist Dana Johnson says "consumers who are still in the market for a new vehicle are opting for less expensive models" today. But the report isn’t all good news. Buyers are "holding down their monthly payments by extending the average maturity of their car loans to 63 1/2 months, an increase of about 2 months over the past four quarters," she adds.

So while dealers are lowering the prices of new cars with incentives, the declining cost of ownership is partially an illusion — we’re agreeing to lower payments because we’re agreeing to make more of them over time. With the cost of the materials used to make cars on the increase, auto prices are going to continue to rise over the long term.

Research the most affordable small cars with U.S. News’ car rankings and reviews.