Autos at Most Affordable Level in 25 Years During Second Quarter, Comerica Reports

DETROIT, Aug. 16, 2004 -- The purchase of an average- priced new vehicle during the second quarter of 2004 took 20.6 weeks of median family income, before taxes, according to the Auto Affordability Index compiled by Detroit-based Comerica Bank. This is 0.5 weeks more affordable than first quarter's revised 21.1 weeks. Total cost, including financing charges, came to $27,126 in the second quarter, 0.8 percent down from first quarter 2004, and 1.5 percent above year-earlier levels. Median family income rose 1.6 percent from the first quarter, and is up 4.0 percent from a year ago.

"Auto affordability reached a 25-year high in second quarter 2004 chiefly on the strength of income and employment gains over the past 12-months," said David Littmann, chief economist, at Comerica Bank. "Considering the low financing rates and incentives already in place, the spectacular 4 percent increase in family incomes has outpaced the annual increase in new car prices nearly twofold and overall vehicle transaction costs nearly threefold."

Comerica's Auto Affordability Index is compiled from Commerce Department and Federal Reserve data. The index fully reflects Commerce's data revision since 2001.

Comerica Bank, Michigan's oldest and largest bank, is the lead subsidiary of Comerica Incorporated , a multi-state financial services provider headquartered in Detroit.