Georgia ranks 10th most 'car poor' state by Consumer Affairs
Traffic crawls north out of Atlanta along Interstate 75/85 during rush hour in Atlanta,.(Photo by Barry Williams/Getty Images)
ATLANTA - For drivers in Georgia, the actual cost of vehicle ownership eats up more than 15% of their paychecks.
A new ConsumerAffairs analysis reveals that Georgia drivers are officially among the most "car poor" in the nation. Ranking 10th overall, drivers in the state routinely dedicate a much larger portion of their hard-earned take-home pay to their auto loans than they realize.
What we know:
The median car payment in Georgia has reached $660 per month against a median monthly income of $4,250. This means local drivers spend roughly 15.5% of their earnings on car payments, which is the 11th-highest rate in the country and equates to about $1 out of every $6 earned going straight to an auto lender.
Furthermore, Georgia drivers face a median annual percentage rate of 15.7%, which is the second-highest rate in the country and well above the national median of 12.9%.
Consequently, a massive portion of their monthly payment goes toward financing interest rather than paying down the actual vehicle principal.
Why you should care:
Budgeting more than 15% of an income strictly for a car note leaves far less breathing room for other critical expenses, such as housing, groceries, savings or emergency funds.
Additionally, committing to a 72-month loan term at a 15.7% interest rate means buyers are highly likely to end up underwater, owing more than the car is worth as it quickly depreciates.
While the underlying data stems from drivers actively looking to refinance to lower their payments, high interest rates and existing negative equity make it incredibly difficult for them to qualify for better terms.
What we don't know:
This study focuses strictly on auto loans. It remains unclear just how much worse the overall financial strain becomes once additional automotive expenses are factored into the equation. The baseline data does not account for Georgia’s high auto insurance premiums, fuel costs or routine vehicle maintenance.
For the full report, visit https://www.consumeraffairs.com/finance/car-payment-affordability-by-state.html
The Source: The information in this article was gathered from a press release by ConsumerAffairs