Many U.S. households cannot afford to purchase the average used car, according to a study from 

Used cars
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The study looked at 25 million used cars sold in the 50 largest cities in the country, and found that most used cars sold would result in over-extending the average household.

One of the reasons used car affordability is problematic is because the weak economy has spawned low household income, according to Phong Ly, CEO of

"In order to afford a car, they're taking out a loan that has a far longer loan term than ideal, and paying a lot more over the life of the loan than ideal."

One of the standards used in the study is the "20/4/10" formula. That formula shows a used car buyer putting down 20 percent of the car's price, taking out a loan for no more than four years and not spending above 10 percent of their monthly income on a car payment.

Ly says for too many, the formula doesn't work and actually gets in the way of family finances because households are overextended so much, that it's impossible to save for other expenses.

"If you look at the total cost of the loan that they have to end up paying, it is far more than what they should be paying, based on the income that they are making," Ly said.

However, the news isn't all bad. In fact, used car prices are moderating because of the high number of leases on the road.  Used car affordability in the New York metro area, which includes North Jersey, is better than in many other areas of the country.  New Orleans is one of the worst cities for used car affordability, accord to the study.

For buyers who are in the search of a used car, Ly said it's important to not just focus on the vehicle's monthly payment.  He said buyers should also consider the length of the loan and its interest rate.