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Autos At Most Affordable Levels in 22 Years: Report

May 9, 2001

The cost of a new car or truck is at its most affordable level in the United States in 22

years, due to falling prices and rising consumer incentives as automakers scramble for market share, according to a report released on May 9.

The purchase of an average-priced new vehicle required 22.7 weeks of median family pre-tax income in the first quarter, according to the Auto Affordability Index compiled by Comerica Bank. That compares to 23.3 weeks in the fourth quarter of 2000, and 22.6 weeks in the second quarter of 1979.

According to David Littman, chief economist with Comerica Bank, intense discounting and incentive programs to reduce inventories probably influenced individual and fleet purchases during the first quarter.

New vehicle prices in the first quarter averaged $21,882, down 1.24 percent from the fourth quarter of 2000. In addition, family income rose an average of 1.44 percent from the fourth quarter to the first quarter.

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