Study: Many Average U.S. Households Can't Afford a New Car


Do you live in one of the largest metropolitan areas in the U.S.? If so, there's a decent chance you can't afford a new car, according to a report by, a consumer financial information website. It concludes that out of the nation's 25 largest metro areas, a median-income household can only afford an average-priced new vehicle in just one of them: Washington, D.C. The analysis considered three key factors: a 20% down payment; financing for no longer than four years; and principal, interest and insurance totaling no more than 10% of a household's gross income.

"What this research indicates, more than anything, is that a lot of Americans are spending too much money on their cars," said Mike Sante, managing editor, in a news release. "Car costs are one of the most controllable parts of a household's budget. … You're better off driving something more affordable and saving or investing the difference."

Assuming an average purchase price of $30,550 and a monthly payment of $601, the median income of our nation's capital afforded its residents a $628 monthly payment. San Francisco and Boston came closer than most, but still fell short with $537 and $507, respectively.

The three largest U.S. cities — New York, Los Angeles and Chicago — hovered near the middle, with denizens of each able to afford a roughly $21,000 car and monthly payments in the low-$400s. Detroit, Miami and Tampa residents ranked at the bottom of the list as least able to afford cars, only able to accommodate an average monthly payment of between $282 and $332.

Check out the list below to see where your city ranks, followed by its average affordable purchase price and monthly payment:

25. Tampa: $14,516, $282
24. Miami: $15,188, $295
23. Detroit: $17,093, $332
22. San Antonio: $17,137, $334
21. Phoenix: $17,243, $348
20. Pittsburgh: $17,298, $340
19. St. Louis: $18,550, $371
18. Atlanta: $19,122, $376
17. Milwaukee: $19,297, $373
16. Houston: $19,811, $386
15. Dallas: $19,959, $389
14. Sacramento: $19,965, $397
13. Los Angeles: $20,385, $410
12. Chicago: $20,616, $417
11. Philadelphia: $21,069, $419
10. New York City: $21,464, $431
9. San Diego: $21,781, $433
8. Denver: $21,835, $432
7. Portland, Ore.: $21,985, $397
6. Seattle: $22,963, $466
5. Minneapolis: $24,042, $470
4. Baltimore: $24,079, $468
3. Boston: $26,025, $507
2. San Francisco: $26,786, $537
1. Washington, D.C.: $31,940, $628

Buyers Spend Less for New Cars, More on Financing

Enticing Lease and Financing Deals Return to Car Market
More Financing News on

Finance In The News


News Editor Matt Schmitz is a veteran Chicago journalist indulging his curiosity for all things auto while helping to inform car shoppers.  Email Matt