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Auto Incentives Surged This Spring, But Affordability Fell Flat

By Bengt Halvorson
Bengt Halvorson Bengt Halvorson
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4 1,056 views August 10, 2010

Photo from flickr user Photos8.com

Photo from flickr user Photos8.com

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This spring might have been the time of enticing incentives for some automakers—and record high incentives from Toyota—but in a snapshot of the market as a whole it doesn’t look like they made vehicles any more affordable.

According to Comerica, the average vehicle took 23.6 weeks of median family income to purchase, over the second quarter of this year.

Although median family income went up slightly (about 2.4 percent), the average cost of a new car went up by $200 to $27,950.

While that figure might be higher than the average purchase price of $24,000 to $25,000 we’ve cited recently, the Comerica figure includes finance costs as part of the price.

Those average figures might have also been influenced by some unusual economic trends. Sales in the near-luxury and luxury segments surged, as those who could afford a vehicle took advantage of discounts and incentives, while sales continued to lag in the middle of the market as economic uncertainty persisted. Small-car sales, as well, continued to lag expectations.

The hidden story here buried under the medians and averages is that it’s quite likely, for those few families who were shopping in the middle of the market—for a mid-size sedan like the 2010 Chevrolet Malibu or crossover like the 2010 Ford Flex, for instance—it has been the season for the very affordable vehicle.

[Comerica Bank]





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Comments (4)

  1. By Nick Cox Posted: 8/11/2010 2:18pm PDT

    So once again the government has tried to help but really has not helped middle Americans at all. The rich were abel to take advantage and the middle class got nothing. Terrific.
     
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  2. By Bobby Posted: 8/11/2010 3:45pm PDT

    So yes, let me get this right. Most of us can't afford a new car, but the wealthy got some good deals. Just peachy.
     
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  3. By Fizz Posted: 8/12/2010 3:44am PDT

    At least somebody could sell cars.
     
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  4. By Angry American Posted: 8/12/2010 3:49am PDT

    Income for working-class people has been flat since the Clinton years. Vehicles are getting more expensive because of more and more mandated safety equipment (I mean, TEN airbags? Gimme a F-in break) and higher fuel economy regs while gas stays cheap so we just keep on shooting up the heroin. None of this should be a surprise to anyone who can think beyond the next episode of a sitcom.
     
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