The personal finance website WalletHub is a consumer site that provides in-depth analysis of auto-related data. We have shared results of some of their previous studies in the past and have another today.
To date, consumers have taken out another $17 billion in auto loan debt in the third quarter of 2020 alone. Included in their Auto Financing Report is an analysis of 2021’s cities than overspend on cars. Below are some of their findings from each of the reports.
Cities that Overspend on Cars Cities that Spend the Least on Cars
The cities that overspend on cars included Rio Grande City, TX, Willis, TX, Livingston, TX, Alice, TX, Bastrop, LA, Donna, TX, San Juan, TX, Leesville, LA, Uvalde, TX, Alamo, TX, Raeford, NC, Mercedes, TX, Pharr, TX, Douglas, GA, San Luis, AZ, Brownsville, TX, Tolleson, AZ and Deming, NM.
Those cities spending the least on cars included Manhattan Beach, CA, San Carlos, CA, McLean, VA, Hoboken, NJ, Garden City, NY, Needham, MA, Saratoga, CA, Palo Alto, CA, Lexington, MA, Birmingham, MI, Cupertino, CA, Los Altos, CA, Ridgewood, NJ, Chevy Chase, MD, Mid Valley, CA, Bloomfield Hills, MI, Bronxville, NY and Westport, CT.
Interesting to note from WalletHub’s list that Texas appears to be the state overspending the most for a new car!!
According to WalletHub’s Auto Financing Report interest rates for new automobiles are at one of their lowest points in three years. The average new-car loan charge today is 14 percent less interest than the average used-car loan. Compared with buyers who have excellent credit, consumers with fair credit will spend about five times more, or $5,977 in interest over the life of a five-year, $20,000 loan when financing a vehicle.
According to the study, today’s best options for financing a new car include car manufacturers (rates of 62 percent below average) and credit unions (rates at 24 percent below average). The next best options include national banks (19 percent above average), followed by community and small banks (33 percent above average).
WalletHub also found that automobile manufacturers continue to lack transparency when it comes to leasing offers. The average automaker received a WalletHub Transparency Score of 4.6 out of 10.
WalletHub’s recommendation to prospective car buyers is to check their credit scores on their site and use a Car Payment Calculator to determine an auto-loan payment and timeline that is affordable for their budget.
For more information, take a look at the video summarizing the study. https://cardhub.us1.list-manage.com/track/click?u=9a01962198af18c7e7f1d316e&id=80a34b4fcc&e=fae99138df
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