Median-income families in the New York area cannot afford new cars at their average purchase price nationally, according to a study by Interest.com. Those families are in good company, though, since the same is true in all but one of the country's largest metropolitan areas.
Interest.com calculated what households in the country's 25 largest metropolitan areas could afford to spend on cars. They factored in median income, sales tax and insurance costs, creating an affordability index for car purchases. The New York metropolitan area ranked at No. 10 on that list, right behind San Diego and ahead of Philadelphia.
The study found that the affordable purchase price for a New York City household's new car is $21,464, or a maximum monthly payment of $431.
What the study mainly illustrates is that people spend too much money on their cars, said Mike Sante, Interest.com's managing editor. In New York, car costs are driven up by higher-than-average sales taxes and insurance costs.
"It just makes buying a car that much more expensive," Mr. Sante said.
Higher incomes offset this a bit, but New Yorkers also have to pay more for housing. There is much more flexibility in choosing a car, Mr. Sante said, so people in expensive housing markets like New York have even more to gain by making a smart car decision.
"The thing for New Yorkers that is so critical is that you have to pay a lot for housing," Mr. Sante said. "This is your second biggest expense and you really need to keep it under control."