Unless You Live in This City, Chances Are You Can’t Really Afford a New Car

Millennials catch a lot of flak for things. From think pieces to disapproving parents, the newest generation of adults gets criticized a lot. Millennials don’t buy houses in suburbs like baby boomers did. They don’t have as many children. They don’t buy as many cars. These trends might sound like the beginnings of a major cultural shift. But there also could be a simpler reason: These choices are becoming increasingly expensive.

As of 2015, the median income for households of 25- to 34-year-olds was around $55,000. In May 2017, the average price for a new car was $33,261, according to Kelley Blue Book. For most younger buyers, that’s a prohibitively large chunk of change. Add to it the fact that there’s been a generational shift back to cities. And once you factor in high rent, cost of living, and exorbitant insurance rates, any car becomes a luxury.

The rule of thumb for buying a new car is the 20-4-10 rule: Put 20% down on the price, never agree to a car loan longer than four years, and make sure your annual payments don’t exceed 10% of your annual income. As sensible as that sounds, that’s becoming a tall order for more and more Americans. Triangulating insurance data from The Zebra, sales tax figures from TaxJar, and information from the most recent Census, Bankrate factored how much new car the average urban American can afford. Shockingly, every major city but one falls short. 

10. Portland, Oregon

Portland cityscape

A view of Portland | iStock.com

Portland is a breathtaking, vibrant, and proudly unique city. And with its rainy weather, it’s a haven for all-wheel drive cars, such as Subarus. But there are plenty of older cars in this Northwestern city, too, and that’s probably no accident: The average Portlander can afford a $23,208.91 car. That falls 30.22% short of the average price of a new car.

Next: This big league town falls far short. 

9. Chicago

Downtown Chicago

Downtown Chicago | Saul Loeb/AFP/Getty Images

The Windy City may be home to the Bulls, Blackhawks, Bears, and Cubs, but the average Chicagoan just can’t afford a new car. With a median car budget of $23,386.08, these Midwesterners fall a full 29.69% short when it comes to the average price of a new car.

Next: The weather may be paradise, but most residents will have to stick to used cars. 

8. San Diego

Nighttime in San Diego

Nighttime in San Diego | iStock.com

San Diego is home to beautiful weather, sweeping ocean views, and wonderful Mediterranean-style roads just outside the city limits. But most San Diegans can’t afford an average new car. With a median car budget of $23,439.74, they would fall 29.53% short of that average sticker price.

Next: A mile high and more than a few dollars short

7. Denver

Denver skyline

Denver | Kevork Djansezian/Getty Images

The good news is the dry elevation of the Mile High City keeps a lot of rust at bay, which allows people to hold onto their cars longer. The bad news is the average Denver resident is just better off holding on to their used car. An affordable price for a new car here is $24,485.39, about 26.38% short of the average new car price.

Next: Charm City can’t compete when it comes to new cars. 

6. Baltimore


Baltimore | Drew Angerer/Getty Images

Located on the Potomac, the Charm City is a beautiful old port that’s a stone’s throw from our nation’s capital. Despite its proximity to the dreaded Beltway and number of government and corporate jobs, the average resident can’t afford the average price for a new car. Residents can afford $26,355.39, falling 20.76% short.

Next: Even combined, the Twin Cities come up short. 

5. Minneapolis-St. Paul

Minneapolis downtown skyline at sunset

Minneapolis downtown skyline | iStock.com/RudyBalasko

The Twin Cities are a beautiful place on the northern end of the Mississippi River. But as beautiful as they are, they’re also bitterly cold in the winter, making cars a necessity for most of the residents. Unfortunately, the average resident can safely budget $26,605.71 for a new car, falling 20.01% short of the average new car price.

Next: Despite being a tech hub, not many people in this rainy town can afford a new car. 

4. Seattle

Seattle cityscape

Downtown Seattle | iStock.com/welcomia

Seattle may be rainy, but it’s also a beautiful city with great roads, stunning views, and some incredible classic cars. But despite massive corporations, such as Amazon, Starbucks, and Boeing, in the city, the average resident comes up short when buying a new car. Bankrate found the average Seattleite could afford to spend $26,771.36 on a new car, coming up 19.51% short on the price of the average new car.

Next: Residents of this New England hub should stick to used cars. 

3. Boston

Boston skyline

The Boston skyline | iStock.com/movinggstill

Boston’s centuries-old layout, narrow streets, and rush hour gridlock make it a bit of a nightmare to drive in. But that doesn’t mean there aren’t plenty of people there who want new cars. Unfortunately, the vast majority of them wouldn’t be able to afford one. With income factored in, the average Bostonian could afford to spend $30,863.38 on a new car, 7.21% under the average new car price.

Next: Maybe the high rent has something to do with this California city’s spot on this list. 

2. San Francisco

San Francisco cable car

San Francisco cable car | iStock.com/batuhanozdel

The City by the Bay is known for its hilly streets, relatively small city limits, ridiculously high rent, and proximity to Silicon Valley. Despite being close to all that wealth, the city’s average person couldn’t hope to afford the average new car. The average San Franciscan just barely misses the mark, with the ability to afford a $32,286.08 car, 2.93% below the average price.

Next: The only U.S. city where an average resident can afford a new car

1. Washington, D.C.

The skyline of Washington, D.C.

The skyline of Washington, D.C. | Saul Loeb/AFP/Getty Images

This is the only major city in the U.S. where its average resident can afford an average new car. Factoring in household income (which includes that of politicians and other federal employees), the average D.C. resident can afford a car with a sticker price of $37,223.41 or less.

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