Study: Households with median incomes can only afford average new car price in one of America's 25 largest cities

Filed under: Car Buying, Earnings/Financials

Interest.com has taken a look at the 25 largest metropolitan areas in the US to determine which median-income households in those areas can afford to purchase a new car. As it turns out, only those living in Washington, D.C. can realistically swing the payment on an average-priced model. In 2012, new cars and light trucks carried a median MSRP of $30,550, and Interest.com used the 20/4/10 rule to examine what exactly is affordable in each area.

The rule states that a buyer should be able to offer a down payment of at least 20 percent, incur financing for no more than four years and endure a principal, interest and insurance totaling up to no more than 10 percent of household income. That works out to a monthly payment of $601. Households with an average income in Washington, D.C. can afford a payment of up to $628, while the next closest city, San Francisco, can only afford $537 per month. You can pick through the cryptic press release below for more information.

Continue reading Households with median incomes can only afford average new car price in one of America's 25 largest cities

Households with median incomes can only afford average new car price in one of America's 25 largest cities originally appeared on Autoblog on Sun, 03 Mar 2013 13:00:00 EST. Please see our terms for use of feeds.

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Source: http://www.autoblog.com/2013/03/03/households-with-median-incomes-can-only-afford-average-new-car-p/

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