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Cars now at most affordable prices since 1980

 
2 992 views Aug 11, 2008
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Cars now at most affordable prices since 1980

Cars now at most affordable prices since 1980

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Carmakers are struggling and the global economy is straining under the weight of high oil prices, but cars haven't been this affordable in nearly 30 years. Calculated by relating the number of weeks it takes for the median family's income to pay for the average new-vehicle price, the quarterly rating, determined by Comerica Bank, stands at 23.1 weeks.

Last year's second-quarter figure was nearly two weeks of pay higher, and no quarter of any year since 1980 has been lower than the second quarter of 2008. What that means in real dollars is that the average price of cars sold in the U.S. is down $700 to $23,900, excluding finance costs. That makes it the lowest figure, in terms of actual dollars, in three years.

The data appears to be a reflection of the market's current trend towards smaller, more fuel efficient (and therefore cheaper) cars. "With gasoline prices soaring, interest rates on car loans rising, and the economy wobbly, those consumers who are still in the market for a new vehicle are opting for less expensive models," said Dana Johnson, Chief Economist at Comerica Bank.

With most carmakers being forced to raise prices by several percent this year due to high materials and transport costs, buyers are simply purchasing less expensive vehicles, while the more expensive cars that have traditionally sold well languish, making this yet another metric of the market's current downsizing trend.



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Comments (2)

  1. By NCyder Posted: 8/11/2008 2:41pm PDT

    And I wouldn't own one at all if there was decent or affordable housing near my place of work. Strangely enough there is a men's low-security prison, trailer park, and $600k+ houses within walking distance of my job.
     
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  2. By Turkle Posted: 8/11/2008 5:58pm PDT

    NCyder. I am a car nut and never thought I would see myself contemplating life without a car, but that is exactly what I am doing. In a few years I will be finished with the education needed to make my career change and I am actually considering a larger city where I can buy housing close to my future employers. I want to be close enough to walk or have a short bike ride to get to work. All factors will be considered (kid's school, wife's employment opportunities, quality of living, etc.), but I think it is possible to go car free. Hell, many city residents do it out of necessity (lack of funds), so I think my family and I can do it out of desire.
     
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