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SOURCE Requisite Press
The June Auto Buyer's Affordability Index (ABAI) stands at 52.7, up 0.8 percent from May 2014, reports Requisite Press
LOS ANGELES, July 9, 2014 /PRNewswire/ -- Requisite Press, LLC reported today a June 2014 ABAI of 52.7, indicating that a prudent, median-income family can only afford 52.7 percent of an average-priced new car. In fact, only one-third of American households can afford the $30,342 average price while preserving financial security*. This shrinks to fewer than one in four when insurance for a second car is included. However, consumers can take steps to save 20 percent or more-results that could preserve the financial security of a million additional families.
"Car buyers are often encouraged to focus solely on monthly payments," said Phil Kelton, president of Requisite Press. "But long-term loans, with seemingly affordable payments, inflate the amount that buyers spend and can erode household financial security. Buyers that aren't fully informed can easily become financially struggling owners and poor long-term customers."
To help fill the information gap, Requisite Press recently released AffordCheck(SM), a free, online financial assessment tool, based on the 20-4-10 auto financing rule. AffordCheck(SM) enables buyers to quickly determine an affordable payment and price, or get an instant assessment of dealer quotes.
Prepared with this information, buyers can actively take steps to reduce the total cost of a purchase and preserve financial security, Kelton said. A savings of 20 percent or more is possible by carefully selecting model and trim, obtaining competitive pricing and financing, and reducing add-on spending.
AffordCheck(SM) is available at:
The June ABAI of 52.7 is based on a median household income of $53,385 and adherence to the 20-4-10 auto financing rule. This equates to an affordable monthly payment of $315 and price of $15,976. The June ABAI is up 0.8 percent from the May 2014 ABAI of 52.3, largely due to a 0.8 percent increase in median household income.
The monthly ABAI was developed to enable buyers to easily view current new-car prices in the context of sound financial advice. The 20-4-10 auto financing rule consists of a minimum 20 percent down payment, a maximum 4-year loan term, and monthly payments of no more than 10 percent of gross household income. The rule is widely recommended by personal finance experts to maintain financial security, avoid excessive interest costs, and preserve future investment opportunities.
For additional information:
*Analysis based on the U.S. Census Income Report (September 2013)
About Requisite Press, LLC:
Requisite Press, LLC was founded in 2012 to publish select expert information with great potential for consumer quality-of-life improvement. The debut project was the application of commodity-buying principles to new-car buying, resulting in the book Power Shift: The New No-Stress, No-Hassle Way to Get the Best New-Car Deal-Every Time! Power Shift enables individual consumers to minimize new-car prices while obtaining an improved car-buying experience.
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