LOS ANGELES, Aug. 6, 2014 /PRNewswire/ — Requisite Press, LLC reported today a July 2014 ABAI of 53.5, indicating that a prudent, median-income family can only afford 53.5 percent of an average new-car price. New-car prices increased at more than twice the rate of incomes during the five years (2009 through 2013) of economic recovery since the Great Recession. The average price grew by 8.9 percent, whereas median household income increased by only 4 percent*. However, modernization of the new-car marketplace has improved buyer access to competitive pricing and a better buying experience.
"The majority of new cars are essentially commodities—produced in large quantities and widely available," said Phil Kelton (@Phil_Kelton), president of Requisite Press. "However, ease of consumer access has been lacking. Now with industry acceptance of emailed quote requests, informed buyers can reap the benefit of an unconstrained marketplace."
Buying a new car like a commodity is straightforward, but likely counterintuitive to a negotiation-conditioned public. The reality is that it takes less effort to request best-price, nonnegotiable quotes from multiple sources than to engage in negotiations with just a few. It's also likely to result in a better outcome. Ready-to-buy consumers can easily obtain multiple offers and the best market price. Multiple offers ensure a better buying experience.
Requisite Press recommends the following steps to maximize the commodity effect: (1) prepare for an immediate purchase, (2) write a quote request email that demonstrates readiness, and (3) request quotes from seven to ten sources.
A quote request email template is available at: http://requisitepress.com/qre.
The July ABAI of 53.5 is based on a median household income of $53,891, an average light-vehicle transaction price of $30,210, and adherence to the 20-4-10 auto financing rule. This equates to an affordable monthly payment of $319 and price of $16,175. The July ABAI is up 1.5 percent from the June 2014 ABAI of 52.7, largely due to a 1.0 percent increase in median household income.
The monthly ABAI was developed to enable buyers to easily view current new-car prices in the context of sound financial advice. The 20-4-10 auto financing rule consists of a minimum 20 percent down payment, a maximum 4-year loan term, and monthly payments of no more than 10 percent of gross household income. The rule is widely recommended by personal finance experts to maintain financial security, avoid excessive interest costs, and preserve future investment opportunities.
For additional information:
http://www.requisitepress.com/ABAI
*Analysis based on data from the U.S. Bureau of Economic Analysis and the Census Bureau
About Requisite Press, LLC:
Requisite Press, LLC was founded in 2012 to publish select expert information with great potential for consumer quality-of-life improvement. The debut project was the application of commodity-buying principles to new-car buying, resulting in the book Power Shift: The New No-Stress, No-Hassle Way to Get the Best New-Car Deal—Every Time! Power Shift enables individual consumers to minimize new-car prices while obtaining an improved car-buying experience.
Contact:
Phil Kelton
@Phil_Kelton
Email
310-896-2302