West Palm Beach region ranks dead last in car affordability index

Honk if this sounds a little too familiar: The South Florida region that includes West Palm Beach and Miami sputters to a stop as worst in the nation for affording a car, according to a study by Bankrate.com of North Palm Beach.

It’s not a mere mismatch of the salaries of regular working folks to the sticker price on a vehicle, researchers said. Other stuff that comes with a car costs more in some places than others. And we aren’t talking pine-tree air freshener.

“Car insurance was a big factor,” said Bankrate.com analyst Claes Bell.

Throw in other things like a relatively high sales tax in a state without an income tax, and you’ve got West Palm Beach-Fort Lauderdale-Miami pulling in last among 25 big metro areas it examined.

Washington, D.C. and San Francisco, where salaries tended to match up favorably to car prices, came out on top of this particular index.

Here’s how Bankrate looked at it. It figured what a driver could afford by putting down 20 percent of a vehicle’s purchase price, taking out a car loan for no more than four years, and devoting no more than 10 percent of her annual income to car payments, interest and insurance.

Now it’s true South Florida drivers with decent credit can steer around some of these limitations and get deals with little money down and loans longer than four years in today’s environment of historically low interest rates.

But the analysis does bring out the impact of relatively high insurance costs. Florida has consistently ranked in the top 10 states for average car insurance premiums and the bills tend to run higher in this end of the state.

Bankrate cites the example of Brooke Waszak, a real estate agent in Lake Worth. She traded in an older vehicle for a late-model used car and saw insurance premiums jump more than 100 percent. That came as a shock: “I didn’t factor it in at all.”

 

 

 

 

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