Consumers and Salespeople Agree: New Car Prices Are Too High

    BANDON, Ore., March 27 Even though incentives are at
record levels, consumers and automotive sales people say new vehicles are
becoming less affordable.

    In a national survey of more than 1,800 car and truck shoppers and
211 dealership salespeople, conducted in March, the overall new-vehicle
affordability rating fell to levels not seen since 1991.

    Shoppers were asked to rate sticker prices using a 10-point scale with
"10" being "Extremely Affordable."

    In 1985, the average score was 6.8. By 1994 it had fallen to 4.3. When
automakers started to hold prices in the middle 1990s and allowed consumer
income to "catch up" to MSRPs, the perception of affordability climbed. In
2000, for example, affordability was rated 6.2.

    In the last quarter of 2000 and first quarter of 2001, however, as auto
companies piled on small but cumulative price increases, the perception of
affordability deteriorated to 5.8, barely ahead of the 1990 mark of 5.6.

    Even automotive salespeople believe vehicles have become less affordable.
In 1990, surveyed salespeople gave sticker prices an affordability rating of
5.9, falling to 4.3 by the middle 1990s and climbing to 6.6 in 2000. The first
quarter 2001 figure, however, dropped to 6.2.

    Even when adjusted for incentives, automotive salespeople say cars and
trucks are less affordable, dropping from 2000's 8.9 to 8.4 in the first
quarter of this year. This is the first year-to-year decline since 1995.