The first quarter of 2007 wasn't exactly a banner period for car sales, and the average price of a new car went down $550 vs. the fourth quarter of 2006, so says a study performed by Comerica Bank. That extra $550 represents 1.5 weeks less of overall family income to pay for a new vehicle than the aforementioned fourth quarter, which Comerica chief economist Dana Johnson said was attributable to higher incentives, a poor housing market, and higher gas prices.
The study shows that the average new vehicle purchase averaged $28,200 per light vehicle sale in Q1 2007, which is up 1.6% from last year's first quarter. The good news is that the average family income rose by a healthy 3.7% during that one-year span. Americans still need 24.7 weeks of median family income to pay off their new vehicle purchase, but it's better than the 25.2 weeks of the first quarter in 2006.
While it's good news that our pay is rising at a higher rate than the price of new vehicles, we think a lot of it has to do with the softening demand for pickup trucks. With gas pricing going up steadily in April and so far in May as well, we're curious to see what the next quarter will look like.
[Source: Automotive News - sub. req'd]