First Quarter Auto Affordability Still Strong, But Less Than Prior Quarter - Comerica Bank

DETROIT, May 9 The purchase of an average-priced new vehicle during the first quarter of 2002 took 22.5 weeks of median family income, before taxes, according to the Auto Affordability Index compiled by Detroit-based Comerica Bank. This represents a 0.6 week weakening from fourth quarter 2001's level of 21.9 weeks of income required for purchase.

"This still leaves auto affordability 0.7 weeks stronger than the same quarter a year ago," according to David L. Littmann, chief economist at Comerica Bank. The average new vehicle price in the first quarter was $23,091, up $219 or 1.0% from first quarter 2001. Incomes gained an average 1.1% over the comparable period, but average financing rates rose a full percentage point after the lapse of zero-rate financing incentive programs, thereby accounting for the quarterly drop in affordability. Littmann noted that new vehicles remain at their most affordable levels in two decades.

Comerica's Auto Affordability Index is compiled from Commerce Department and Federal Reserve data.

Comerica Bank, the oldest bank in Michigan, is a subsidiary of Comerica Incorporated , a multi-state financial services provider headquartered in Detroit, with bank subsidiaries in Michigan, California, and Texas, banking operations in Florida, and businesses in several other states. Comerica has an investment services affiliate, Munder Capital Management, commercial banking operations in Canada and a commercial banking subsidiary in Mexico.