While many consumers take a great deal of pleasure in buying a new vehicle, a new report shows that many households are stretching dollars more than they should. In fact, only one major city in the country can really afford the average price of a new car these days.
The typical price of a new vehicle reached $30,550 last year, but using a simple rule regarding median-income and affordability, Washington D.C. is the only place out of the nation’s largest 25 cities that families could truly afford it, according to Interest.com’s 2013 Car Affordability Study.
“What this research indicates, more than anything, is that a lot of Americans are spending too much money on their cars,” says Mike Sante, managing editor of Interest.com. “Car costs are one of the most controllable parts of a household’s budget. For example, if you live in New York City or San Francisco, you’re probably going to have to pay a lot for housing, but you don’t have to pay a lot for a car. You’re better off driving something more affordable and saving or investing the difference.”