PHOENIX (CBS5) -
The Phoenix metro area ranks 21st out of 25 major cities in a new car affordability study conducted by Interest.com.
Accounting for the region's median income and car insurance costs, Interest.com determined that typical Phoenix area households can afford to spend up to $17,243 on a car. The average new car, however, costs $30,550.
"What this research indicates, more than anything, is that a lot of Americans are spending too much money on their cars," Interest.com Managing Editor Mike Sante.
When calculating how much a household can afford to spend on a car or light truck, Interest.com considered three key factors that are commonly referred to as the "20/4/10" rule. That is: a down payment of at least 20 percent; financing lasting no longer than four years; and principal, interest and insurance not exceeding 10 percent of a household's gross income.
Interest.com recommends that median-income households spend no more than the following amounts on vehicle payments (principal and interest) in total and each month.
The average price of a new car or light truck in 2012 was $30,550, according to TrueCar. That equates to a monthly payment of about $601.
1. Washington, D.C.
Affordable Purchase Price: $31,940
Maximum Monthly Payment: $628
2. San Francisco
Affordable Purchase Price: $26,786
Maximum Monthly Payment: $537
3. Boston
Affordable Purchase Price: $26,025
Maximum Monthly Payment: $507
4. Baltimore
Affordable Purchase Price: $24,079
Maximum Monthly Payment: $468
5. Minneapolis
Affordable Purchase Price: $24,042
Maximum Monthly Payment: $470
6. Seattle
Affordable Purchase Price: $22,963
Maximum Monthly Payment: $466
7. Portland, Ore.
Affordable Purchase Price: $21,985
Maximum Monthly Payment: $397
8. Denver
Affordable Purchase Price: $21,835
Maximum Monthly Payment: $432
9. San Diego
Affordable Purchase Price: $21,781
Maximum Monthly Payment: $433
10. New York City
Affordable Purchase Price: $21,464
Maximum Monthly Payment: $431
11. Philadelphia
Affordable Purchase Price: $21,069
Maximum Monthly Payment: $419
12. Chicago
Affordable Purchase Price: $20,616
Maximum Monthly Payment: $417
13. Los Angeles
Affordable Purchase Price: $20,385
Maximum Monthly Payment: $410
14. Sacramento
Affordable Purchase Price: $19,965
Maximum Monthly Payment: $397
15. Dallas
Affordable Purchase Price: $19,959
Maximum Monthly Payment: $389
16. Houston
Affordable Purchase Price: $19,811
Maximum Monthly Payment: $386
17. Milwaukee
Affordable Purchase Price: $19,297
Maximum Monthly Payment: $373
18. Atlanta
Affordable Purchase Price: $19,122
Maximum Monthly Payment: $376
19. St. Louis
Affordable Purchase Price: $18,550
Maximum Monthly Payment: $371
20. Pittsburgh
Affordable Purchase Price: $17,298
Maximum Monthly Payment: $340
21. Phoenix
Affordable Purchase Price: $17,243
Maximum Monthly Payment: $348
22. San Antonio
Affordable Purchase Price: $17,137
Maximum Monthly Payment: $334
23. Detroit
Affordable Purchase Price: $17,093
Maximum Monthly Payment: $332
24. Miami
Affordable Purchase Price: $15,188
Maximum Monthly Payment: $295
25. Tampa
Affordable Purchase Price: $14,516
Maximum Monthly Payment: $282
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