Will Car Prices Ever Line Up with Incomes?
There’s been a disturbing trend in consumer behavior in recent years: people are buying way more car than they can afford.
The median U.S. household income was $54,457 in 2014, yet the average transaction price for a new vehicle is up past $30,000.
According to a report from Edmunds, a person making that kind of money can actually afford to pay $16,448, or 54.1 percent of the October 2014 new light-vehicle average transaction price of $30,382.
However, incomes are finally rising faster than inflation. In fact, this increase accelerated in the second half of 2016.
It would still take a lot more in the way of rising income, and less in the way of transaction prices, before vehicle purchases get truly affordable.
But at least things are moving in the right direction.
Copyright Today’s Credit Unions