The purchase of an average-priced new vehicle during the second quarter of 2004 took 20.6 weeks of median US family income, before taxes, according to the auto affordability index compiled by Detroit-based Comerica Bank.
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This is 0.5 weeks more affordable than first quarter’s revised 21.1 weeks. Total cost, including financing charges, came to $US27,126 in the second quarter, 0.8% down from first quarter 2004, and 1.5% above year-earlier levels. Median family income rose 1.6% from the first quarter, and is up 4.0% from a year ago.
“Auto affordability reached a 25-year high in second quarter 2004 chiefly on the strength of income and employment gains over the past 12 months,” said Comerica Bank chief economist David Littmann.
“Considering the low financing rates and incentives already in place, the spectacular 4% increase in family incomes has outpaced the annual increase in new car prices nearly twofold and overall vehicle transaction costs nearly threefold.”
Comerica’s auto affordability index is compiled from commerce department and federal reserve bank data.
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