---

Auto Affordability Improves Again - Comerica Index

19 November 1998

Auto Affordability Improves Again - Comerica Index

    DETROIT, Nov. 18 -- The purchase of an average-priced new
vehicle during the third quarter of 1998 required 24.5 weeks of median family
income, before taxes, according to the Auto Affordability Index compiled by
Detroit-based Comerica Bank.  This compares with 24.7 weeks of income required
for the purchase in the second quarter.  Vehicles are now at their most
affordable level since the third quarter 1980, according to the index.
    "Once again, a combination of lower auto financing rates and median family
income gains far outstripped increased customer outlays for new cars, and this
led to improved affordability in the latest quarter," said David L. Littmann,
chief economist with Comerica Bank.  "Income gains over the past year have
risen four times faster than the average costs associated with new car
purchases, giving third-quarter car buyers more clout and more choice."
    Financing rates fell another 0.05 percentage points between the second and
third quarter, and the length of the average auto loan is now two weeks
shorter than in the same quarter a year ago, Littmann noted.
    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 multi-state financial services provider headquartered in Detroit that
operates banking subsidiaries in Michigan, California, Texas and Florida.
Comerica also operates banking subsidiaries in Canada and Mexico.