Study: Phoenix median-income families can't afford new car - WDAM-TV 7-News, Weather, Sports-Hattiesburg, MS

Study: Phoenix median-income families can't afford new car

CBS 5 CBS 5
PHOENIX (CBS5) -

The Phoenix metro area ranks 21st out of 25 major cities in a new car affordability study conducted by Interest.com.

Accounting for the region's median income and car insurance costs, Interest.com determined that typical Phoenix area households can afford to spend up to $17,243 on a car. The average new car, however, costs $30,550.

"What this research indicates, more than anything, is that a lot of Americans are spending too much money on their cars," Interest.com Managing Editor Mike Sante.

When calculating how much a household can afford to spend on a car or light truck, Interest.com considered three key factors that are commonly referred to as the "20/4/10" rule. That is: a down payment of at least 20 percent; financing lasting no longer than four years; and principal, interest and insurance not exceeding 10 percent of a household's gross income.

Interest.com recommends that median-income households spend no more than the following amounts on vehicle payments (principal and interest) in total and each month.

The average price of a new car or light truck in 2012 was $30,550, according to TrueCar. That equates to a monthly payment of about $601.

1. Washington, D.C.
Affordable Purchase Price: $31,940
Maximum Monthly Payment: $628

2. San Francisco
Affordable Purchase Price: $26,786
Maximum Monthly Payment: $537

3. Boston
Affordable Purchase Price: $26,025
Maximum Monthly Payment: $507

4. Baltimore
Affordable Purchase Price: $24,079
Maximum Monthly Payment: $468

5. Minneapolis
Affordable Purchase Price: $24,042
Maximum Monthly Payment: $470

6. Seattle
Affordable Purchase Price: $22,963
Maximum Monthly Payment: $466

7. Portland, Ore.
Affordable Purchase Price: $21,985
Maximum Monthly Payment: $397

8. Denver
Affordable Purchase Price: $21,835
Maximum Monthly Payment: $432

9. San Diego
Affordable Purchase Price: $21,781
Maximum Monthly Payment: $433

10. New York City
Affordable Purchase Price: $21,464
Maximum Monthly Payment: $431

11. Philadelphia
Affordable Purchase Price: $21,069
Maximum Monthly Payment: $419

12. Chicago
Affordable Purchase Price: $20,616
Maximum Monthly Payment: $417

13. Los Angeles
Affordable Purchase Price: $20,385
Maximum Monthly Payment: $410

14. Sacramento
Affordable Purchase Price: $19,965
Maximum Monthly Payment: $397

15. Dallas
Affordable Purchase Price: $19,959
Maximum Monthly Payment: $389

16. Houston
Affordable Purchase Price: $19,811
Maximum Monthly Payment: $386

17. Milwaukee
Affordable Purchase Price: $19,297
Maximum Monthly Payment: $373

18. Atlanta
Affordable Purchase Price: $19,122
Maximum Monthly Payment: $376

19. St. Louis
Affordable Purchase Price: $18,550
Maximum Monthly Payment: $371

20. Pittsburgh
Affordable Purchase Price: $17,298
Maximum Monthly Payment: $340

21. Phoenix
Affordable Purchase Price: $17,243
Maximum Monthly Payment: $348

22. San Antonio
Affordable Purchase Price: $17,137
Maximum Monthly Payment: $334

23. Detroit
Affordable Purchase Price: $17,093
Maximum Monthly Payment: $332

24. Miami
Affordable Purchase Price: $15,188
Maximum Monthly Payment: $295

25. Tampa
Affordable Purchase Price: $14,516
Maximum Monthly Payment: $282

Copyright 2013 CBS 5 (KPHO Broadcasting Corporation). All rights reserved.

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