All is not gloomy for the auto industry. Yes, SUVs and large trucks aren't worth much these days due to the record gas prices over the past months. However, according to a recent report released by Comerica Bank, a Detroit-based bank, which measures the affordability of new vehicles based on a number of factors, reveals that in the second quarter of this year it only took 23.1 weeks of family median income to purchase a vehicle, as opposed to 24 weeks in the first quarter and 25 weeks this same time period a year ago. The last time American consumers were able to pay off their vehicles in this short of a time period - was in 1980! This recent drop in affordability is due to heavy incentives and American drivers shifting to fuel-efficient vehicles, which typically cost less. The average cost to buy a vehicle in the first quarter of 2008 without finance charges was $23,900 - down from $24,600 in the first quarter, saving $600. Furthermore, in order for American consumers to compensate for the rising living costs, they're holding down their payments - stretching payments to 63.5 months, up by two months from the previous quarter. As consumers continue to be payment sensitive and the economy teeters, expect for next quarter's report to show an additional decline in new car pricing.
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