Auto Affordability: 20 Weeks Work For Working Family - Remains Stable -Comerica Bank Reports

DETROIT, Aug. 13, 2003 -- The purchase of an average- priced new vehicle during the second quarter of 2003 took 20 weeks of median family income, before taxes, according to the Auto Affordability Index compiled by Detroit-based Comerica Bank. This is unchanged from the prior two quarters.

Total cost of an average-priced new vehicle, including financing charges, came to $25,407 in the second quarter, 0.8 percent up from first quarter 2003, but 0.5 percent below year-earlier levels. Median family income also rose 0.8 percent from the first quarter, but is up 3.7 percent from a year ago.

"Despite income growth exceeding new car prices year-over-year, along with lower average financing rates, second quarter auto affordability failed to gain new ground largely because overall average incentives were moderated and vehicle prices advanced slightly ahead of income gains," said David Littmann, chief economist at Comerica Bank. "Second quarter saw a sizable shift to longer payment schedules, offsetting some benefits from lower second-quarter financing rates."

Comerica's Auto Affordability Index is compiled from Commerce Department and Federal Reserve data. The index fully reflects Commerce's data revision since 1999.

Comerica Bank, Michigan's oldest and largest bank, is the lead subsidiary of Comerica Incorporated , a multi-state financial services provider headquartered in Detroit. Comerica reported total assets of $59 billion at June 30, 2003.