Cars Were More Affordable In 2002.

U.S. auto consumers benefitted from fierce competition among automakers in 2002 as the average-priced new vehicle were more affordable. According to the Auto Affordability Index compiled by Detroit-based Comerica Bank, the purchase of an average- priced new vehicle in 2002 was one-half week more affordable than a year earlier. However, during the fourth quarter of 2002, it took 20.0 weeks of median family income, before taxes, to buy a new car or 0.1 weeks more than it did in the third quarter. The third quarter 2002 index of 19.9 weeks was the lowest recorded in 24 years, Comerica said.

"For 2002, the average-priced new vehicle absorbed 20.4 weeks of income, versus 21.4 weeks in 2001," said David 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." Littmann said 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 the Commerce Department's data revision since 1999.