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Auto Affordability is Best in 18 Years

17 August 1998

Auto Affordability is Best in 18 Years - Comerica Bank Index

    DETROIT, Aug. 17 -- The purchase of an average-priced new
vehicle during the second quarter of this year required 24.7 weeks of median
family income, before taxes, according to the Auto Affordability Index
compiled by Detroit-based Comerica Bank.  This compares to 25.2 weeks of
income required for purchase in the first quarter.
    "Consumers have not been so advantageously positioned for the purchase of
vehicles since 1980," said David L. Littmann, chief economist with Comerica.
"The combination of lower financing rates, strong gains in median family
income and outright decreases in average outlays on new cars between the first
and second quarters of 1998 pushed auto affordability to its best level in 18
years," he said.  "Over the past 12 months alone, average financing rates have
dropped 1.2 percentage points, and median family incomes have risen 5 percent,
compared with an average 2.7 percent outlay on vehicles."
    Littmann noted that government revision of income data since the first
quarter of 1995 has improved affordability by lowering the number of work
weeks of income required to purchase a new vehicle.
    Comerica's Auto Affordability Index is compiled from Commerce Department
and Federal Reserve data.  Graphic detail available upon request.
    Comerica Bank is the lead subsidiary of Comerica Incorporated ,
a diversified financial services provider headquartered in Detroit with
banking affiliates in Michigan, California, Texas and Florida.