It may not seem like it, but cars today are cheaper than they've been in the past 25 years.
According to Michigan-based Comerica Bank's "Auto Affordability Index," it now takes 23.6 weeks of America's median family income to afford a new car. That's 2.8 weeks less than it took at the end of 1995.
It's slightly longer than it took in 1980, the second year the index was computed, according to Comerica.
Including finance charges, the average passenger vehicle sold in the third quarter of 2006 cost $26,500. That's about five percent less than the same period a year before.
Meanwhile, the average family income has risen five percent over the same period, according to Comerica.
Improved productivity in the auto industry has combined with intense competitive pressures to drive the cost of a new car downward since its high in 1994, said Dana Johnson, chief economist at Comerica.
"It's a pretty happy story for the consumer," said Johnson.
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