Households Spend More Than 10% of Income on Car PaymentsBy
Dreaming about buying a new car? Prepare to pinch those pennies. Households in every major U.S. metro area except D.C. spend more than a tenth of the median income on car payments, according to a report by Bankrate.com. This goes against financial analysts’ recommendation that principal, interest and insurance payments not exceed 10 percent of what a household earns. “The median household in large American cites cannot comfortably afford to buy a new car,” Bankrate.com analyst Claes Bell said in an interview.