How Much Car Can I Afford?

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Car Affordability Calculator

It’s important to figure out how much you should spend on purchasing your car before you start shopping. Use our car affordability calculator to figure out:

• How much down payment do you need
• Your monthly payment amount
• Loan terms and options

Comparing Car Affordability in United States

According to Kelley Blue Book, the average new car price is $33,666 in 2016, which marks a 2% increase from 2015. Based on Edmunds’ 2016 Used Vehicle Market Report for Q3, the national average retail used car transaction price is up to $19,232.

Bankrate conducted a study earlier in 2016 across 50 cities in the US to see how the affordable it is to buy a new car and concluded that average American households can no longer afford the price of a new car purchase. We followed the same model to extend the study on both new and used car affordability. We used household income data from the US Census Bureau to calculate an Affordable Price for each one of the top 100 most populous metro areas in the US.

Key Findings

This portion of the analysis is based on an Affordable Price that we calculated per metro area. The Affordable Price factors in the total monthly expenses an average household should spend on a vehicle. This includes auto loan payments, the cost of insurance and gas, where the total monthly payment does not exceed 15% of the gross monthly income.

Car Affordability Across Top US Metro Areas

Low Affordability Rank
High Affordability Rank

New York, San Francisco Bay Area and Minneapolis Tops Affordability Rank

We compared the Affordable Price difference against both new car and retail used car transaction prices, and ranked each metro from the most affordable to the least. New York, San Francisco Bay Area and Minneapolis take home the top spots, coming in 1, 2 and 3 of our ranking with the highest purchasing power. Fresno, California, El Paso and McAllen Texas came in the opposite end of the spectrum, with the lowest Affordable Price. The difference is mainly due to the fact that the median income in those metro areas are significantly below the national average of $56,615, according to data from the US Census Bureau. See the full list of cities and their respective rank on the table below.

Affordability Rank for Top 100 Cities

Metro Area
Median Household Income
Affordable Price
Affordability Rank
New York , NY

Cost Benefits of Buying Private Party

Whether you are shopping on a budget, or just financially savvier than the average buyer, private party really is the way to get more car for your money. Based on our findings, used vehicles sold by dealers on average cost $12,321 more than ones sold by private sellers.

However historically there’s been a lot of risks that comes with private party transactions. Did you know that odometer inconsistency alone has cost consumers over $1 billion annually in fraudulent used car sales? The quality of vehicles can vary greatly from one owner to the next too. While the average private party vehicle on other marketplaces only cost $6,911—there are also a lot of salvage or lemon vehicles that you would want to avoid.

You Can Save $4624 with instamotor

The average transaction price on instamotor is $13,876. Compare to buying through a dealer, you can save over $4,624 buying a quality used car that has been digitally verified, with a clean title and a detailed vehicle history report at no additional cost. We perform a5 step verification check for every vehicle listed—where we filter out vehicles with branded title, lemon history, odometer inconsistency, structural damage and more. That way you can focus on looking for the right car that fits your needs without worrying about getting a lemon.

The Best and Worst Cities to Buy Used Cars

Purchasing or selling a used car comes with a unique set of challenges. Every car is different, so determining a fair price often comes down to car make and model, market demand, condition adjustments and, most importantly, the competition. What a buyer in San Francisco will pay for the same car sold in Knoxville, TN can be a difference of a couple thousand dollars—so it’s important to understand what your city considers a fair price.

We got to wondering how much of a difference there is in private party used car pricing, so we took the top 75 most populous metro areas and gathered vehicles listed for sale online by owners. This study excludes dealership vehicles and only contains vehicles listed for sale directly by owners. Looking at an average of 4,147 listings per metro area, we determined what the average sale price of a private party used car was—and ranked their positions for the 10 most and least expensive cities for used cars. Read more to see where your city ranked below.

The 10 Most Expensive Areas for Private Party Used Cars

1. San Francisco - Oakland - San Jose, California CMSA - $9,488 average used car price

#5 most populous metro

For Bay Area locals, it may come as no surprise that San Francisco tops the list in highest used car price. Combine the high cost of living, long commute times (San Francisco County averages 30 minutes) and lack of reliable transit options for surrounding suburbs, residents rely heavily on their cars to get around.

2. Oklahoma City, Oklahoma MSA - $9,028 average used car price

#47 most populous metro area

With three million fewer residents than San Francisco, Oklahoma City places second in the most expensive place to purchase a used car. While the overall cost of living is low, commute times in Lincoln County (home to Oklahoma City) average 29 minutes. Long commute times can factor into the value of a used car with buyers seeking the perfect balance of affordability and low mileage.

3. Phoenix - Mesa, Arizona MSA - $8,844 average used car price

#15 most populous metro area

While Phoenix may be a surprise on the list, the greater metro area is home to some of the largest (and most expensive) suburbs like Mesa, Scottsdale, and Chandler. With large suburbs comes multiple car households (the Phoenix metro area averages 1.8 cars per household) and higher value cars like SUVs and minivans.

4. San Diego, California MSA - $8,304 average used car price

#17 most populous metro area

San Diego is mostly known for picturesque beaches, but residents can confirm that owning a car in America’s Finest City is an absolute must-have. San Diego’s large military presence (making up 13% of the population) is also a unique factor providing a consistent cycle of new residents—resulting in cars owned for shorter periods of time.

5. Salt Lake City - Ogden, Utah MSA - $8,243 average used car price

#35 most populous metro area

Similar to Phoenix, the greater Salt Lake City metro area is home to sprawling suburbs and high car ownership. Car ownership is highly valued in surrounding towns like West Valley View, Taylorsville and West Jordan, where fewer than 5% of households are careless.

6. New York - Northern New Jersey - Long Island, New York - New Jersey - Connecticut - Pennsylvania CMSA - $8,169 average used car price

#1 most populous metro area

While one would suspect the most expensive metro area would result in some pretty high used car prices, New York metro residents just miss the top five. This is primarily due to increase use of public transit—55.7% of New York City residents live in carless households. Still, the higher median income in this metro area means more turnover of higher priced, lightly used automobiles.

7. Birmingham-Hoover-Cullman, Alabama MSA - $8,079 average used car price

#52 most populous metro area

Lack of public transit and commute times topping 33 minutes contributes to Birmingham metro areas ranking in the most expensive used cars. In the city of Birmingham, there are eight cars for every 10 adults and for surrounding towns like Hoover, AL the number is 10 cars for every 10 adults. Finally, Birmingham is at the convergence of four major interstate highways (I-65, I-20, I-22 and I-59) resulting in a heavy reliance on cars to get around.

8. Seattle - Tacoma - Bellevue, Washington CMSA - $8,067 average used car price

#14 most populous metro area

Seattle’s fast population growth rate (reporting 1.68% growth in 2015) in addition to consistently ranking in the top 10 most expensive cities to live in could explain the equally high used car price. While railways, buses, trolley and even water taxis are transit options in the region, automobile is still the most popular mode of transit.

9. Tulsa, Oklahoma MSA - $8,053 average used car price

#57 most populous metro area

Tulsa’s mean commute time, cars per household and household income vary little from Oklahoma City two hours away. With almost 300,000 fewer residents compared to Oklahoma City, Tulsa’s low supply with high demand places this metro in the top 10.

10. Charleston - North Charleston, South Carolina MSA - $7,951 average used car price

#74 most populous metro area

Charleston and the surrounding metro area has one of the lowest mean commute times of any city on this list with 22.4 minutes. Despite faster commutes, most Charleston area residents own a car, typically averaging 1.5 cars per household. Mount Pleasant, SC, a nearby Charleston County suburb, also ranks as one of the fastest growing suburbs with a 4.7% increase in 2015 which could play a role in recent demand for new residents.

10 Most Expensive Cities For Used Cars

Top 10 Least Expensive Areas for Private Party Used Cars

1. Cleveland - Akron, Ohio CMSA - $5,265 average used car price

#16 most populous metro area

Pairing low commute time (24.3 minutes) and commute distance (7.8 miles) with overall lower median income, the Cleveland metro area is the most affordable place to buy a used car. This is great news for residents, as most households average 1 - 1.4 cars.

2. Milwaukee - Racine, Wisconsin CMSA - $5,444 average used car price

#26 most populous metro area

Similar to Cleveland, Milwaukee residents experience low commute distances (7.4 miles on average), which may result in much older makes and models on the market. 78% of Milwaukee residents live in their home for a year or more, showing that fewer life changes like a big move mean more residents are holding onto their cars for longer periods of time.

3. Youngstown - Warren, Ohio MSA - $5,508 average used car price

#69 most populous metro area

Ohio residents rank again, this time about one-hour southeast in Youngstown metro area. The Youngstown - Warren metro area has some of the lowest commute distances in the state, averaging 5.8 miles, meaning residents don’t have to worry about costly repairs or replacements, which in turn increases the price of a car when they choose to sell.

4. Columbus, Ohio MSA - $5,550 average used car price

#32 most populous metro area

With slightly higher commute times and distances compared to other top ranking Ohio metros, Columbus is still low enough to place in the top five least expensive used car prices. Columbus is also the largest U.S. metro area without either a local rail or intercity rail connection, meaning residents are relying mostly on their cars to traverse the county.

5. Philadelphia - Wilmington - Atlantic City, Pennsylvania - New Jersey - Delaware - Maryland CMSA - $5,558 average used car price

#6 most populous metro area

Philadelphia is the only region to rank in the least expensive used cars and also be in the top 10 most populous metro areas. While it is a sprawling metropolitan region, the commute distance and car ownership are low (Philadelphia averages a 7.8 mile commute and 1 car per household). In addition, this metro area covers four different state lines, resulting in enough supply to meet the low demand.

6. Hartford, Connecticut MSA - $5,741 average used car price

#41 most populous metro area

Unlike other Connecticut cities, Hartford is less dependent on nearby major cities like New York City or Boston. Because of this, Hartford is less impacted by higher city wages and increase of median household income. Finally, Hartford ranks 10th in the U.S. for carless households, with only 0.9 cars per household on average, showing an overall smaller value placed on car ownership.

7. Buffalo - Niagara Falls, New York MSA - $5,860 average used car price

#42 most populous metro area

New York’s second largest metro area (ranking in the top 20 for most population per square mile) is also home to some of lowest median household income in the country (ranking #96 with $30,942). With a high volume of car owners and relatively low income, used cars come at a bargain price in Buffalo.

8. Minneapolis - St. Paul, Minnesota - Wisconsin CMSA - $5,907 average used car price

#13 most populous metro area

The largest metropolitan area in the state, Twin Cities residents experience higher commute distances compared to other regions in the list (with an average commute distance of 9.5 miles). While longer in distance, Minneapolis - St. Paul is home to seven interstates and six freeways, forcing most commuters to drive highway miles over city miles, which is overall better for the health of a car.

9. Madison, Wisconsin MSA - $5,911 average used car price

#59 most populous metro area

Although Madison is smaller than second-ranking region Milwaukee, median household income is about $18,000 more in this metro area. A slightly higher income with a small population, low commute time, and low commute distance puts Madison lower on the inexpensive used car list.

10. Grand Rapids - Muskegon - Holland, Michigan MSA - $5,914 average used car price

#46 most populous metro area

Rounding out the list is Grand Rapids. Similar to other metro areas on the list, Grand Rapids residents spend an average amount of time and distance on their commutes (21.1 minutes and 7.2 miles respectively), but also some of the higher median household incomes (ranking just after Boston earning on average $53,464).

Average Private Party Used Car Prices

Metro Area
Average Private Party Price
Price Rank
San Francisco Bay Area, CA


Average Private Party Used Car Prices

We took a minimum of 3,000 car listings by owners per metro area between November 15 - December 5, 2016, to calculate the average used car prices.


Affordability study

The Affordable Price calculation is based on a 48-month loan term, with an interest rate of 5%, and a $1500 down payment available for the purchase. As there are additional household debt and expenses that need to be accounted for, the calculation assumed that the total monthly spend on the vehicle should not exceed 15% of the monthly income. The total monthly spend includes auto loan payment, the average cost of gas by state, and the average cost of insurance by each state - as referenced from the external sources listed below.


3 Factors To Determine How Much You Should Spend On A Car

Buying a car can be one of the biggest purchases you make. Your version of “how much car can I afford” can be very different from the next person. New car transaction prices have been on the rise over the last few year, with the average transaction price for 2016 at $33,666. It is the key reason why more financially savvy shoppers have opted to buy used cars versus new. As you’re doing your homework, these are the 3 most important questions to ask yourself as you determine how much you can, or should spend on your next car.

1. Figure Out Your Debt-To-Income Ratio

Debt-To-Income Ratio

To determine your debt to income ratio, add up your total monthly debt payments (mortgage, rent, current auto loan, etc.) and divide them by your gross monthly income. ConsumerFinance.gov suggests that in order to obtain a loan from most lenders, your ratio needs to be below the 43-percent threshold. A lender will evaluate all your existing debts and your ability to meet your monthly payment to determine how much they should lend.

2. How Much Do You Have For A Down Payment

A good general rule of thumb is to get as close to 20% for your auto loan down payment. Putting down more money will lower monthly payments, cut the cost of interest, and also cut down the amount of time you’re actually paying back the loan. Usually, $3,000 is a good barometer for any car and shouldn’t break the bank too much. Also, having a bit of money leftover for other incidentals, sales tax, registration fees and insurance premiums are all things you should factor in for your purchase.

How Much Down Payment Do You Need to Buy a Used Car?
How Much Down Payment Do You Need to Buy a Used Car?
It's possible to put down as little as 0% if you have pristine credit, but should you? Read More...

3. What Do You Want Your Monthly Payments To Be

Obviously, the lower the better, right? Set a budget to how much you realistically want to spend a month. Factor in your situation: single, housing expenses, social life, other hobbies, etc., to make sure you’re not going to stretch yourself too thin.

It’s worth the extra bit of effort to make sure you’re getting the right car at the right price. Use our Car Affordability Calculator to figure out how much of your hard-earned cash you’ll need up-front and monthly—so you can set a budget and start looking for your best options. We’re here to make the buying process easy and safe for everyone.

For more tips and best practices for used car shopping, check out our guide below.

The Ultimate Used Car Buying Guide
The Ultimate Used Car Buying Guide
Whether you’re going to purchase from a dealer or a private owner, we’re here to help you do your homework and figure out what to look for throughout the car buying process. Read More...