Auto Affordability Reverses After 10 Quarters of Improvement
21 November 2000
Auto Affordability Reverses After 10 Quarters of Improvement, Comerica ReportsDETROIT, Nov. 20 The purchase of an average-priced new vehicle during the third quarter of 2000 required 23.2 weeks of median family income, before taxes, according to the Auto Affordability Index compiled by Detroit-based Comerica Bank. This compares with 23.0 weeks of income required for purchase in the second quarter. During the same quarter a year earlier, a new vehicle purchase took 24.4 weeks of income, Comerica reported. The average vehicle price in the third quarter was $21,804, up $118 from second quarter, but down $657, or 2.9 percent from the same quarter a year ago. "Higher borrowing costs played a major role in reversing the 10-quarter improvements," said David Littmann, chief economist with Comerica Bank. "Average rates rose more than 0.5 percent in the third quarter, up nearly a full percentage point from a year ago, and at the highest point in three years." Comerica's Auto Affordability Index is compiled from Commerce Department and Federal Reserve data.