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Almost None of Us Can Afford a New Car Outright

NEW YORK (MainStreet) — The average cost of a new vehicle might cause a serious case of sticker shock for the vast majority of Americans.

Interest.com cited the cost of a new car at $32,086 this year and found it an unaffordable figure for buyers in 24 of 25 large metropolitan areas.

For example, residents of Tampa, Fla., can afford to spend only $14,209 on a new vehicle, leaving them a "purchase gap" of just under $18,000 they would need to finance to pay that $32,000 for a new car or truck.

Financing adds thousands of dollars to the cost of a new vehicle. According to BankingMyWay.com, the average auto loan interest rate stood at 3.27% last week.

Financing an $18,000 car loan at 3.3% would lead to an expensive monthly car payment: $525.84. And most Americans just can't afford that.

"Too many families are spending way too much on new cars and trucks," said Mike Sante, a spokesman for Interest.com. "Just because you can manage the monthly payment doesn't mean you should let a $30,000 or $40,000 ride gobble up such a huge share of your paycheck."

Sante says there really is no need to spend that kind of money on a vehicle, not when you have other auto buying options.

"You can get a great car for much less and use the savings to invest in yourself," he says. "That's where the money for your retirement or kids' college can come from."

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