Jill Gonzalez (WalletHub, Overspending on Cars)


Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

Joining us now on the line is Gil Gonzales from wallet out here to talk about the city's. That overspend on cars the most Jill thanks for coming on with us. Joseph let's talk first about the other methodology that was used here how exactly did you go about measuring business. Actually pretty simple here we looked at the media ought to learn balance of more than 2500 US cities. Compared to him that he'd be average income. And then it looked to see it and think what that debt to income ratio just on Ottawa. What cities ended up overall fuel to the entire country what cities ranked worst. In this study. The companies and hacked it did not do well here in Florida did not do well. And we're seeing that in places where property and should be immediately keep where are the fact that our. You putt and that's spending more on cars about what it means to be right around the country. And so you mentioned yeah Texas is there SE about a four to name some Georgian names on the list as well. Where does the north east rank overall compared to some of these places. Get a little bit better honestly though they knew worst. Percentile would be in 1990 that's where these debt to income ratio is very eyes and and is 60%. Most placing it in the north he did better maybe the highest percentile linguistics yes. With less than 40% debt to income ratio. I can't stand few places like west Polaris electing you Cambridge. Then that's great debt to income ratio. Anywhere from ten to 20% that in a very. It in in terms of the overall effect this has on local economies. You know it if this money is being spent on cars does it impact those local areas and anyway. Yeah absolutely I mean if you're just looking at. First about the overall economy last year auto sales declined for the first time in eight years. And that they haven't at the end of the year to them on the mr. natural disaster and ended up happening where. People an hour in the market for a new car or whether they like it or not. Directly aimed at across the country that some of those economies are going to get a little bit about it. But also that many but the team. Standing out there. Let's look at some of the New England states and China hone in on. He'd be key areas in those states what are we see in terms of Maine what were the cities that tended to be best their verse of the cities that tended to be works. Lillian did the best pair decked and Tammy you're right under 25 and so that basically boils down there. The media not island that has 101000 dollars. In more like 42000. Dollars not Q back. In Mena copper iron in Boehner didn't do. Debt to income ratio like thirty. I'm guess New Hampshire probably pretty strong along the coast gets a little weaker as he had in ruined. Yeah like it did pretty well here and 20% median on island edit twelve pound and intently at least six pounds and conflicted as a OK Rochester and a little bit worse. And you know looking at some of these other cities Massachusetts in general seems to be. Ranking pretty highly as far as not having an off an awful lot of auto debt relative to income. Yeah Winchester need and Munich in electing McCain are hover around that twelve and mark in the immediate auto loan debt. It's higher around. 151000 dollars but the intent and also allowed ire from nine east side of 1151000. So that's what he's still get it ratio and it looks pretty dead. Very good Jill thank you very much of the time we appreciate it. Joseph Gonzales from wallop of talking about cities overspend on colors give carpenter. Not anymore paid off two years ago me tell you to agree at a carpet at the old lease payments every month we drive. A Honda Accord 2016. So it's a nice car a kind of a mid range car with your payment per month if you don't money my payment it is to 93 that. And give you some advice. Don't release again because you don't police and now it is a big debut some some three financial advice. In and Tucker chucked very name is John EU EU should do this right now. What was your car payment when you bought that card number. Who'd attempted to do four. Or. And. One needs something somewhere that brought 400 tornado in you don't have a payment anymore. Now what I want you to do is keep making that 420 dollar payment I did this back in the 1980s started by car payment lose 300 bucks. And I paid it off like chucked it at Peter opera that he earned it but then I kept saving 300 dollars a month in a mutual fund. And then when I needed new car I going to that mutual fund and I pay cash for that new car because I've saved it. And I've never had I've never had to borrow money. For cards at times that I have borrowed money. Would be when they offers 0% financing are really low rates of financing that'll do it yet the right now you know getting it from the dealers are easy go to and argued today. Ending their car payment. You know I don't even know I haven't bought a car bought cardinal while but you know it's just like 5% 6% said additional bargains out there to take. Whatever your old car payment used to be each take that 420 dollars. Find you know a maybe a balance neutral fund fairly conservative mutual fund to be a stock all stock mutual fund. Put it into that fund and then when you need your next new car so a three year should now you're cart dies out and you. You see all the money you'll need in that we borrowing money your your it is. Buying cars like when the worst investment you can make. Oh would it mean to you you drive the thing awful lot of drops 30% valued at even when you buy a used car like unit odd got a pretty good deal in the used car as I didn't. It's it's still goes out of business and if you didn't the guy sold do you still made money relative that's that's out always work which is fine mystified that. But my advice to you would be for those of you who don't have car payments are you to the courier try to figure out how this get ahead of the game. Don't borrow money by car save the money in advance the other thing it'll do psychologically for a is. You'll you'll realize you've got all that money in the mutual fund you wanna part with it. In you'll save yourself Jack and drive this car another 50000 miles down you'll you'll you'll keep your cars longer. And what are the lead again one of the worst investments you as a consumer can make. Is going out in buying a new car or any kind of card new or used they go down in value. On a frequent basis drive an old beater there's nothing wrong. Reality especially when you're married you know trying to impress anybody now do you you don't need to be cool kid yet do we have to show the neighbors that you drive a Lexus. When the dumbest things you can do.