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Auto Affordability Continues to Improve

13 May 1998

Auto Affordability Continues to Improve - Comerica Bank Index

    DETROIT, May 12 -- The purchase of an average-priced new
vehicle during the first quarter of 1998 required 25.5 weeks of median family
income, before taxes, according to the Auto Affordability Index compiled by
Detroit-based Comerica Bank.  This compares to the 25.8 weeks of income
required for purchase in the final quarter of 1997.
    "This is the fifth consecutive quarter of improved auto affordability,"
said David L. Littmann, chief economist with Comerica Bank.  "Including all
incentives, new vehicles are now at their most affordable point in 17 years,
matching the 25.5 weeks of income that were absorbed by a new car purchase in
the first quarter of 1981, when autos were well on their way to becoming much
less affordable."
    Family incomes in the first quarter advanced twice as fast as new car
prices over the same quarter a year earlier, with average financing rates down
0.3 percent, Littmann noted.  Comparisons with the fourth quarter were
especially favorable, he said, because despite a small increase in financing
rates, loan maturities grew shorter and incomes accelerated relative to car
prices.
    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.

SOURCE  Comerica Bank