Although cars remain at near record levels of affordability, new-car buyers turned to more expensive vehicles this past quarter.
That's according to Comerica Bank's latest Auto Affordability Index, which looks at the number of weeks of family income needed to buy a new car. Overall in the second quarter of 2009, the average-priced new car took 22.1 weeks of median family income—versus 21.8 weeks in the first quarter—largely because the bank's tally of the average new light-vehicle price rose to $26,300, up from $26,000.
That might be taken as a sign of recovery, but it's most likely the result of more easily available financing, relative to late 2008 and early 2009.
This past quarter, buyers paid the lowest loan rate in five years—an average of just 3.45 percent—thanks to various factory finance deals.
"While consumers opted to buy more expensive vehicles last quarter, a sharp drop in financing costs held down our affordability index," reports Dana Johnson, Comerica Bank's chief economist, in a press release.
Actual market finance rates have already risen significantly this summer. Bankrate.com reports that the average rate on a 36-month new-car loan has risen from 6.72 in January to 7.13 percent this month.
Johnson anticipates that the affordability index for the current quarter might reach a new high because of the Cash for Clunkers program.
Just last week, Comerica told Automotive News that the bank, which is a leading provider of inventory financing for dealerships, is allowing some flexibility with dealers feeling the crunch from Cash for Clunkers rebates that haven't yet arrived.