Americans Spending Less on New Cars

For the second quarter in a row, the average car price has gone down, according to Comerica Bank’s Auto Affordability Index. That means the average household is spending $750 less on a new car now than six months ago, averaging $27,800. That’s roughly the same amount you’d pay for a new Ford Freestyle. The bank’s economist attributes the lower figure to rising gas prices and higher interest rates. Yep, that should do it.

[Source: Comerica]

Comments

I think you could also factor in the large supply of used cars on the market. I think that many of the used cars on the market now-a-days are cars that recently came off leases. Usually these are in pretty good condition. Buyers know that and they may decide to purchase a three year old used car rather than getting a new car which will obviously have more costs. So the increase in supply of certified used and even regular used cars that are in near excellent condition is forcing the demand for new cars down.
Just an opinion.

people are certainly cross shoping used with new like never before Andy. Good point. I'm not sure it would impact the new car price though. Unless people are buying used cars that when new would be higher priced, like BMWs etc. Although those vehicles are quite popular as pre-owned.

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