Letterwerks Sign City
 
VBC Video
"Where Fillmore County News Comes First"
Online Edition
Saturday, April 19th, 2014
Volume ∞ Issue ∞
 

78


Do you think that chain stores in small communities undermine the sales of locally owned retailers?







View Results
Ody's Country Meats

New car not in the budget for many families


Fri, Apr 26th, 2013
Posted in All Features

Having a family, owning your own home and driving a new car is a common goal of many people. But at least one item on that list has now become much less affordable for the average person.

Now that many of the auto-buying incentives instituted to help reinvigorate the auto industry have expired, the average consumer is being priced out of a new vehicle. According to data from TrueCar.com, the average automobile -- at a cost of $30,500 in 2012 -- is now more expensive than ever before. Furthermore, information from a 2013 Car Affordability Study conducted by Interest.com said that most households across America cannot afford a car payment on a new vehicle. In fact, it was determined that only residents of Washington, D.C., with an annual income of roughly $86,000, could afford the average sticker price of a new vehicle and the roughly $550 per month it would cost to finance that vehicle. When factoring in housing costs, insurance and the cost of food, only average citizens in San Francisco, Boston and Baltimore are within spitting distance of being able to afford a new car.

The Interest.com research used certain qualifiers in determining the maximum amount the average family could pay for a new car. Researchers calculated 10 percent of the monthly, median gross household income for each metropolitan city and subtracted the average monthly insurance premium. The site also considered three key factors, often referred to as the “20/4/10” rule, which involves a down payment of at least 20 percent, auto financing lasting no longer than four years and principal, interest and insurance not exceeding 10 percent of a household’s gross income. Using that as a foundation, the study determined most households cannot afford the mean price of $30,000 for a new car and must look to other options, including previously owned vehicles or leasing a vehicle. Dealerships now offer warranties and certification on preowned vehicles that not only make them more affordable but also offer peace of mind to owners worried about buying a lemon. Furthermore, many preownedvehicles are lease turn-ins that are only three years old and have few miles on them thanks to mileage restrictions common to many leasing agreements.

Consumers looking for an affordable vehicle might want to downsize their next car or go without certain options. Cars rolling off of the assembly lines are packed with many features that some buyers can do without. If you desire all of the bells and whistles in your vehicle, you may want to consider a compact car that boasts the desired features instead of a midsize one. The smaller vehicle might have a lower sticker price, and you will still get the options on your list.

No Comments Yet. Be the first to comment!







Your comment submission is also an acknowledgement that this information may be reprinted in other formats such as the newspaper.