The purchase of an average priced new vehicle in the USA during the first quarter of 2004 took 20.5 weeks of US median family income, before taxes, according to the Auto Affordability Index compiled by Detroit-based Comerica Bank. This is 0.7 weeks more affordable than the fourth quarter’s 21.2 weeks.
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Total cost, including financing charges, came to $26,676 in the first quarter, 1.7 percent down from fourth quarter 2003, and 0.7 percent above year-earlier levels. Median family income rose 1.4 percent from the fourth quarter, and is up 3.2 percent from a year ago.
“With tax refunds and tax cuts, income growth far outpaced incentive-laden new vehicle prices during the first quarter,” said David Littmann, chief economist, at Comerica Bank. “Other factors helping lift affordability to the highest levels in a quarter century were lower financing rates and shorter loan maturities.”
Comerica’s Auto Affordability Index is compiled from Commerce Department and Federal Reserve data.
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