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Miami Named Least Affordable U.S. City to Buy a New Car

Miami-Dade County's median income — a scant $44,000 — is remarkably low compared to virtually every other city of its size. This creates a whole host of problems for local and longtime residents. International billionaires jack up the city's property values, inflating rental prices and forcing Miamians to either leave town or spend the highest share of their income on rent compared to residents of any other American city.

So when you're already burning 30 to 50 percent of your paycheck on your home, there's little money left to spend money on much else. Food, utility bills, education, and medical care tend to come first for families — and the thought of buying a new car vanishes into the ether.

There'snow even more data to back up this fact: A study released yesterday by the lending advice firm Bankrate named the Miami-Dade metro area as the least affordable spot in nation for residents to buy new cars.

After analyzing local income levels, insurance rates, and sales-tax data, Bankrate found that the average Miami resident can comfortably afford to spend only $13,576.83 on a new car, the lowest price of the 25 major cities surveyed. That's a 59 percent lower amount than the average cost of a new car in Miami-Dade.

Loan analysts say an "affordable" car loan should follow the so-called 20/4/10 rule — customers should be able to pay 20 percent of a car's total cost as a down payment, take out a four-year loan, and spend no more than 10 percent of their annual income on payments. As one might expect, it's extremely difficult for the typical Miamian to check off all of those boxes.

"In Miami, the metro area worst for affordability, a typical household can afford to pay only about $13,600 without breaking the 20/4/10 rule," the study says. Tampa and Orlando also made it into the bottom five, while D.C., San Francisco, and Boston made up numbers one through three largely due to each city's high income rates.

Bankrate said it interviewed a real-estate agent from Lake Worth, who "traded in a very old vehicle for a late-model used car and was blindsided by a more than 100 percent increase in her car insurance premiums." She told the organization she was stunned to learn about how much more she'd have to pay in extra tax fees and insurance payments, and said she didn't plan enough ahead of time to budget out extra money. And she's a real-estate agent likely making more than the median income.

The study also notes that the average used-car price in the United States — roughly $19,200 — is still unattainable for residents of many cities on the list. That $19,000 figure is still nearly $6,000 higher than the average "affordable" rate Bankrate calculated for Miami-Dade.

At least Miami is a dense, walkable metropolis with easily accessible public transportation! Just kidding. Without a car, the poor are forced to ride county buses multiple hours per day to get to and from work, trapping them in some sort of dystopia where they spend most of their free time crammed in traffic on a sweaty bus, ripped away from their families. (Miami's traffic problems don't help the rest of the area's inhabitants either.)

The study shows how intertwined Miami's wage, rent, and transportation issues really are: Without a higher minimum wage (set by the state) or healthier industries setting up shop in Florida, the city's wages will remain low. Without stringent affordable-housing laws, rent will continue to spiral out of control, as Miami Beach is discussing at its city commission meeting today. And without controls on wages and rent to prevent the county from bleeding its residents dry, buying a car with working wheels, doors, and windows will remain a pipe dream for thousands of South Floridians.

Plus, the study shows how the triumvirate of urban sprawl, high rents, and low wages holds down the local economy: People who can't pay car loans definitely aren't forking over money for staycations at the Ritz-Carlton.

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