In the 1940 motion picture “The Grapes of Wrath,” a very poor Midwest family is forced off of their land and they travel to California in order to find work. The film, which is based on a novel by John Steinbeck, showed the terrible conditions for many families during the time of the Great Depression.
However, the film was banned in the Soviet Union under Joseph Stalin because he didn’t want to show that even the poorest of Americans in a capitalist society can afford a car – owning a vehicle in the USSR was quite a difficult feat because you had to submit a request to the government.
A new study shows that the average household in the U.S. can’t afford to buy a new car. According to Interest.com, an average new vehicle comes with a price tag of $32,000, a large chunk of change for households that can’t afford the higher cost of living and suffer from stagnant wages.
The website’s 2014 Car Affordability Study stated that the cost is unaffordable for median households in 24 of the 25 largest metropolitan areas. There is one city that households can afford a brand new car, though: Washington, D.C. – this area consists of some of the richest counties in the country today.
In an interview with CNBC on Thursday, Mike Sante, managing editor of Interest.com, argued that purchasing new vehicles is already a major problem for households.
“Just because you can manage the monthly payment doesn’t mean you should let a $30,000 or $40,000 ride gobble up such a huge share of your paycheck,” said Sante. “You can get a great car for much less and use the savings to invest in yourself. Here’s where the money for your retirement or kids’ college can come from.”
If you’re in the market for a new car, he recommends establishing a financial game plan: put down 20 percent, limit auto loans to a maximum of four years and refrain from spending more than 10 percent of your income on monthly car payments and insurance.