Auto Affordability Improves Again - Comerica Index
15 November 1999
Auto Affordability Improves Again - Comerica IndexDETROIT, Nov. 15 -- The purchase of an average-priced new vehicle during the third quarter of 1999 required 23.4 weeks of median family income, before taxes, according to the Auto Affordability Index compiled by Detroit-based Comerica Bank. This compares with 23.6 weeks of income required for purchase in the second quarter. During the same quarter a year earlier, a new vehicle purchase took 24.2 weeks of income, Comerica reported. The average vehicle price in the third quarter was $20,809. "Cars and light trucks are at their most affordable level in close to 20 years," said David L. Littmann, chief economist at Comerica. "The current 23.4 weeks of required income rivals the average 23.1 weeks recorded in the first quarter of 1980." Vehicles were more affordable in the third quarter because personal incomes grew by 1.2 percent, while auto prices were unchanged, Littmann noted. "This key factor also is driving this year's record vehicle sales pace," he said. "Compared with the third quarter of last year, family incomes have risen 5.2 percent, and thanks to vehicle incentives and rebates, the average auto transaction price is up only 1.2 percent," Littmann said. Average auto financing rates, at 7.45 percent, have remained nearly unchanged since last year. Comerica's Auto Affordability Index is compiled from Commerce Department and Federal Reserve data. Comerica Bank, the largest bank in Michigan, is a subsidiary of Comerica Incorporated , a multi-state financial services provider headquartered in Detroit, with banking subsidiaries in Michigan, California and Texas, banking operations in Florida, and businesses in nine other states. Comerica also operates banking subsidiaries in Canada and Mexico. Comerica is celebrating its 150th anniversary in 1999.