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Auto Affordability Gained One Full Week In 2002

February 19, 2003

The purchase of an average-priced new vehicle during the fourth quarter of 2002 took 20.0 weeks of median family income, before taxes, according to the Auto Affordability Index compiled by Detroit-based Comerica Bank. This is 0.1 week less affordable than third quarter’s 24-year record 19.9 weeks, but is one-half week more affordable than a year earlier, said Comerica.

"For 2002, the average-priced new vehicle absorbed 20.4 weeks of income, versus 21.4 weeks in 2001," according to David L. Littmann, chief economist at Comerica Bank. "The fractional slippage in auto affordability at year-end 2002 reflects the more modest incentives offered in early fall. From third to fourth quarter 2002, incomes gained 1.0 percent, versus a 1.6 percent increase in average vehicle cost." Average expenditure per vehicle in the fourth quarter, after rebates, was $21,745 and the average financing rate was 4.4 percent.

Comerica's Auto Affordability Index is compiled from Commerce Department and Federal Reserve data. The index fully reflects Commerce’s data revision since 1999.

Comerica Bank, the largest bank in Michigan, is a subsidiary of Comerica Incorporated, a multi-state financial services provider headquartered in Detroit, with banking subsidiaries in Michigan, California and Texas, banking operations in Florida, and businesses in seven other states. Comerica also operates banking subsidiaries in Canada and Mexico.

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