Only Washington area drivers can afford average priced new car

Only Washington area drivers can afford average priced new car

Washington is the only city in the countrys top 25 metro areas where the average resident can afford to buy an average priced car of $32,086, according to a recent study by Interest.com.

The financial website took the average city residents salary, ranging from $88,233 in Washington to $44,402 in Tampa., Fla., and used the 20/48/10 rule to determine an appropriately priced car for their income. The rule assumes at least a 20 percent down payment and a balance financed over no more than 48 months. The 10 means that total monthly vehicle expenses (principal, interest and insurance) should total no more than 10 percent of the familys gross income.

Many Washingtonians, of course, who make less than $88,000, are buying new cars. Some buyers have longer finance terms, some lease. Others move to certified pre-owned.

The average transaction price means the price consumers pay after incentives and options. Although analysts estimate of the ATP may vary, all agree that the number is at record levels.

Average transaction prices continue to rise and are at the highest levels for February in the past five years, said TrueCar.com.