Are Consumers Buying More Expensive Vehicles in a Recession?

While we maybe in the midst of a recession, in a slight reversal from the the first quarter of this year, the average price of a new-vehicle ticked up slightly, according to the Comerica Automobile Affordability Index. During the second quarter of this year it took 22.1 weeks of medium family income, which is up .3 weeks from the first quarter to buy a new ride.

Although the average new-vehicle loan interest rate dropped to a five-year low of 3.45 percent last quarter, are consumers returning to their old habits of buying more expensive vehicles? While it maybe to early to determine this now, we'll review the trends again after the year is over. The latest study revealed that the average new-vehicle cost $26,300 in the second quarter, as opposed to $26,000 during the first quarter, up by $300. Just wondering: Does this study factor in those consumers who were unable to get qualified for financing due to financial strains, which may have caused their credit scores to drop like a rock? If it did, this could cause consumers to get higher rates thus driving up the overall cost of a new-vehicle, too.