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July 1, 2016

Hartford ranked 47th for car buying ability

A new study says Hartford residents are ranked 47th out of the nation’s top 50 cities in their ability to buy a new car.

Bankrate.com’s 2016 Car Affordability Index finds a median-income household in the city of Hartford can afford to spend just $156 per month on a car. That assumes the car buyer follows the 20/4/10 rule: a 20 percent down payment, four-year loan, and payments equal to 10 percent of gross monthly income.

Hartford’s median-income household can only afford to spend up to $7,960 (not including tax). According to Autobytel.com, the Nissan Versa is the least-expensive new car sold in the U.S. with a manufacturer's suggested retail price of $11,990.

New car affordability is not a problem unique to Hartford. BankRate.com says in its report, a median-income household cannot afford the average new car price ($33,865) in any of the nation’s 50 largest metro areas following the 20/4/10 rule.

Bankrate.com analyst Steve Pounds said many people are buying expensive cars by spending more than 10 percent of their income on car payments and/or stretching the loan over six or seven years. “But this is a bad idea that can trap people in a vicious cycle of car payments for many years to come,” he said.

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