DALLAS, May 11 /PRNewswire-FirstCall/ -- The purchase and financing of an average-priced new vehicle took 23.4 weeks of median family income in the first quarter of 2010, according to Comerica Bank's Auto Affordability Index. The first quarter reading showed affordability worsened by 0.3 weeks from the Index's revised fourth quarter level of 23.1 weeks of median family income. The average total cost of buying and financing a new car increased by $500 to $27,500, an 8 percent annual rate increase from the previous quarter. Median family income is estimated to have risen at a 2 percent annual rate in the first quarter. Average car loan rates increased to 4.3 percent, 50 basis points above the 2009 average of 3.8 percent.
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"Affordability deteriorated slightly in the first quarter, mostly due to the rise in interest rates on car loans," said Dana Johnson, Chief Economist at Comerica Bank. "With the ongoing improvement in the economy, consumers were willing to pay a bit more for new vehicles, allowing the car companies to offer less generous discounts and financing terms. The result is that auto affordability in the first quarter was the lowest in nine quarters."
This report incorporates the latest data on consumer spending on light vehicles and on the terms available on auto loans. The full history of the Index is available upon request.
Comerica Incorporated (NYSE: CMA) is a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Business Bank, The Retail Bank, and Wealth & Institutional Management. Comerica focuses on relationships, and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico. To receive e-mail alerts of breaking Comerica news, go to http://www.comerica.com/newsalerts.
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SOURCE Comerica Bank
