The folks are Bankrate have calculated, for each of the fifty largest U.S. cities, the affordable price for a new car. Their analysis is based on median incomes, average insurance costs, payments on a new car loan, and sales tax data.
The chart above shows how those affordable price points compare. The lower a city appears on the list, the more difficult it would be for the typical car buyer to come up with the money for what Kelley Blue Book said was the average price for a new car or light truck at the time of their analysis: $33,865.
Thus, for example, the average buyer in San José can afford a new car that was priced close to the national average, while residents of Detroit can only afford a car worth just over $6,000, less than a fifth of the cost of the average new car.
Sure, the average price of a new car continues to rise. But the list tells us much more about what’s happened to incomes in the United States. From 2000 to 2014, the average income of the bottom 90 percent of Americans actually fell by $4561 (from $36,913 to $32,352).*
That’s the real reason why most of the residents of the fifty largest U.S. cities can’t afford to come up with the money to purchase a new car.
*The data, from the World Wealth and Income Database, are in real 2014 dollars.