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Bankrate Lists Top 10 Affordable Car Towns

Bankrate’s latest Car Affordability Survey finds Washington, D.C., is the most affordable city in which to buy a new car.

Tariq Kamal
Tariq KamalFormer Associate Publisher
Read Tariq's Posts
June 28, 2017
Bankrate Lists Top 10 Affordable Car Towns

 

2 min to read


Washington, D.C., is the most affordable U.S. city in which to be a new-car buyer, according to the latest Consumer Affordability Survey from Bankrate. Photo by Ryan McFarland

NEW YORK — Bankrate Inc. has released the results of its latest Car Affordability Survey, which uses vehicle prices, insurance rates, sales tax, population and personal income levels to identify the U.S. cities in which new cars are most affordable. This year’s Top 10 list is headlined by Washington, D.C., and includes cities in every region but the Southwest and Southeast.

10 Most Affordable U.S. Cities to Buy a Car

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  1. Washington, D.C.

  2. San Francisco

  3. Boston

  4. Seattle

  5. Minneapolis-St. Paul

  6. Baltimore

  7. Denver

  8. San Diego

  9. Chicago

  10. Portland, Ore.

“Our latest Car Affordability Study shows typical households in most of America’s larger cities don’t earn enough to afford the average new vehicle, under a common budgeting rule for buyers,” Bankrate’s Claes Bell wrote, referring to the “20/4/10” rule, which restricts car buyers to a minimum 20% down payment on a four-year loan that will eat up no more than 10% of their annual income. “You may need to stay away from those pricey cars in the showroom and focus on the less expensive models at the back of the lot.”

The consumer-facing survey and affordability list does not purport to rank prices, incentives or discounts offered by dealers in each city. It is designed to reflect what a median-income earner can reasonably afford to spend. In our nation’s capital, that number is a hair over $37,223.41. In Miami, which is ranked last on Bankrate’s 25-city list, the “affordable” price is less than $14,000.

Bell’s analysis highlights the ever-stretching loan terms that have marked the resurgence of the auto retail and finance industry since the Great Recession. The author cites Experian data that shows about three-quarters of new-car loans come with at least a five-year term.

“The length of an auto loan may not seem important, especially with today’s more reliable autos routinely going well beyond 100,000 miles without major issues,” Bell wrote. “But playing by the 20/4/10 rule can make a big difference in your long-term financial well-being.”

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To read Bankrate’s full list of affordable car cities and Bell’s complete analysis, click here.

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