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Poorer Americans can’t afford a new car

Обеднели: американцы не могут позволить себе новый автомобильThe cost of purchasing a car can vary from city to city, but accessibility is a problem across the country

According to a recent study Bankrate.com the most famous brand in USA, which is a personal financial website, “the average American living in a big city, doesn’t earn enough to buy a new car”.

The research considered various factors, including the price of the vehicle, the monthly insurance costs, local taxes and household income.

It uses the term “affordable car”, which is characterized by the rule of “20/4/10” which means, buyers need to set aside at least 20 percent of the purchase price of the vehicle, to take out a loan for a period of not more than four years and spend no more than 10 percent a year to cover the loan and interest and insurance payments.

Given the 20/4/10 rule, Bankrate analyzed the income and the average cost of the vehicle in the 25 largest cities in North America, and estimate that the average price of a new car or light truck sold in the US in may, amounted to about 33 US $ 300.

According to the study, Washington, D.C., San Francisco and Boston are the three cities where residents are likely to be able to afford a new car. On the other hand, Miami, Detroit, and Tampa-St. Petersburg (FL) – the city where, most likely, car ownership out of reach for most people.

While the cost of purchasing a car can vary from city to city, affordability is a problem across the country. Even today, the average price of a used vehicle in the amount of 19 $ 200 is difficult for buyers eight of the 25 largest cities in North America.

Autotrader senior analyst Michelle Krebs explains: “Over the last 35 years, the cost of a new car increased by 35 percent, used vehicle went up by 25 percent, and the average household income only grew by 3 percent.”

Therefore, consumers are one way to overcome the shortage of availability – we take long-term loans. According to Experian, today three-quarters of the loans on new cars have more than five years and dramatically increasing the number of credits for eight years.

The duration of the loan amid the increasing reliability of cars may seem inconsequential. However, analysts warn — “play outside the rules “20/4/10″ can significantly affect the long-term financial well-being.”

“Small households with an average income has to stretch loan terms up to six years or more and spend a lot of money from the salaries to the cent to provide repayment of the loan. It is often difficult to jump out of the “squirrel” wheels when you hit him,” – said the expert Bankrate.com Kleks bell.

Analysts Bankrate.com strongly suggest “play by the rules” and buy a fairly affordable car, to ensure the financial prosperity of the family.

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