Phoenix is a multicultural city and this is also part of its appeal. According to the last ten year census, taken in 2010, the city’s total population is reported at 1,447,617. With well over one million residents, it is easy to see why the city has such a vibrant and thriving cultural scene. While Caucasians make up 65 percent of the population, Hispanics comprise the majority of the rest. There is also a small Asian community, and the southwestern city is also home to a large number of Native Americans.

Over 80 percent of the city’s population has the equivalent of a high school degree and many residents went on to receive additional training and education.
Even though census data shows that over 79 percent of residents are still residing at the same residence that they did a year ago, and home ownership rates are reasonably affordable many residents are still finding themselves looking for easy deals on automobiles at the “pay here” lots. Some of this is due to the fact that while homeownership rates are up annual salaries are not, and with the average household counting two adults and a child as its residents it can be hard for families to keep their credit ratings out of the subprime zone.

QuickFacts Phoenix city, Arizona

According to an article published in Forbes the cost of living is rising in Phoenix and the average income is not keeping pace. As of 2015 the annual income growth for a household was negative 0.3 percent. While this might seem like a relatively small amount that shouldn’t make any real difference in a household budget, over time this discrepancy in income and living expenses can quickly add up.

With two adults’ standard in most households each has an annual income of $48,000- $52,000 a month. Some analysts even suggest that the average household incomes are actually lower, regardless this can still make it difficult for home owners to make ends meet. Renters might be paying a little less for a place to call home, but the majority of these are single which means there is only one income coming in. Forbes is also predicting that the average home price is about to climb 4.8 percent which will put even more of a strain on residents’ budgets.

With the difference in the cost of living and income, it often seems like the only option left open for residents who need a new vehicle are the reputable “Buy Here Pay Here” lots. The chances of being approved for a car loan are almost guaranteed, regardless of low income and the high cost of living.

Forbes: Phoenix, AZ

While the decrease in the number of bankruptcy filings in 2014 was seen as a positive sign, the rising costs of living has many economists warning that not all Phoenix homeowners are out of the woods. It should also be noted that while the foreclosure and bankruptcy rates are lower, the numbers are only being compared to national averages which don’t factor in the area’s higher cost of living.

Even with a drop in bankruptcy filings “Buy Here Pay Here” car lots are still doing a brisk business, and this is mainly due to residents with poor credit or a few late payments on their records being turned down for an automobile loan by a financial institution. Others are simply afraid or too embarrassed after filing for Chapter 7 or 13 to apply at a traditional lending institution, and prefer to go the more anonymous route of getting a high interest car loan from the dealership. Even though it is often difficult for residents to make the payments, many feel like this is their only option if they want to purchase a reliable vehicle.

Forbes: Phoenix, AZ

Phoenix, Arizona, foreclosure rates appear to be on a decline

This means that everything from groceries, gas, clothing, rent, mortgages and health care will cost residents more. With an average annual income between $45,000 and $52,000, which is slightly below national percentages, it is easy to see why it can be difficult for residents to make all of their payments on time.

Adding to the problem is the unemployment rate of 7.5 percent, according to the latest 10 year census conducted by the US government. Even with job rates rising by an estimated 3 percent, this is often not enough to prevent residents from going into debt. While one missed or late payment will not be enough to send residents into collection or bankruptcy court, it can have a detrimental effect on their credit history. These late and missed payments can effect FICO scores and stay on the reports for up to seven years.

Once the credit scores start falling the chances of being approved for an automobile loan also begin to decrease. Credit scores below 550 are referred to as “subprime”, and this means that you are now considered a high risk borrower. This often leads many residents to try their luck at a buy and pay here car dealership. While the high interest rates often make the value of the loan significantly higher than what the vehicle is actually worth, many residents feel like this is their only chance of being approved for a car loan.

American Fact Finder (pg. 1)

With its’ higher than average cost of living and lower annual income it is not surprising to learn that Phoenix is ranked second in the nation for its repossession rates. Statistics show that the sunny desert city had an estimated one out of every 64 vehicles purchased with a car loan repossessed, which gives Phoenix a rate of 1.56 percent. These statistics don’t seem that high until they are compared to states like North Dakota which only reported that 0.16 percent of automobiles purchased were repossessed.

When a vehicle is repossessed a black mark immediately shows on your credit report, which will have a negative impact on your ability to be approved for a car loan. One of the first warning signs most financial institutions look for when someone is applying for a car loan is whether they have ever had a vehicle repossessed. Not only does this indicate an inability to repay the loan, but it can also be taken as a sign that a car is not that important. Even some of the reputable car dealerships will turn down a loan application if the credit report shows a past history of repossessions. When this happens the only option many people feel is to take their chances at a “Buy Here Pay Here” lot.

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In 2012 the state celebrated its 100^th birthday and the city of Phoenix joined in the festivities. Even though this is a comparatively young state, there are plenty of fascinating events that helped shape it and the capital city. Along with having the distinction of a visit by Babe Ruth in 1926 and the haunting of the Hotel San Carlos by Leone Jensen, it has also seen a “UFO crash” and is the proud home of the first McDonald’s franchise. The city has also seen its share of tragedy, but it has done little to dampen residents love and enthusiasm for the city.

In 2014 a record 3.29 inches of rain fell on the city in a single day, which is more than enough to trigger flash flooding in the desert valley city. Over 200 homes were flooded and a large number of the city’s businesses were also crippled, and this is still having a negative effect on the economy.

While the desert does receive anywhere from one to three inches of rain each year it is still a dry and arid area that is trying to support over 1.5 million residents, and a large number of annual tourists. Since many of the goods need to be shipped into the city, prices for daily essentials are typically higher than those found in other areas. As the cost of living increases and wages stay the same, it is not uncommon to find a majority of the residents living on credit.

With lines of credit already open one would expect to find FICO scores in the “good” or at least “fair” rankings. Unfortunately this is typically not the case in this occasionally “cash strapped” city. Lower credit scores mean that finding a good interest rate on an automobile loan is difficult, if not impossible, and this can also cause many residents to choose to take their business to a “Buy Here Pay Here” car lot. There is hope for residents who want to avoid the uncertainty often associated with some of these less than reputable car lots if they are willing to take the time to apply for a bad credit auto loan. It will take time and some work on your part, but even with bad credit it is still possible to find and finance a reliable and affordable car.

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The city voted in January of 2016 to approve funding for a new business district downtown. Known as Roosevelt Row, when everything is said and done it will be home to an eclectic mix of restaurants, theaters and art galleries. This is in addition to the city center known as Copper Square which is home to two professional sports teams, along with the tallest building in the state.

The plans to revitalize and add to the city’s current business districts is an effort to entice more residents and large companies to the area, along with keeping up with the annual influx of tourists. Tourism accounts for a large percentage of the city’s annual budget, which helps to explain why law makers have already approved $4 billion in funding for the project. With poverty rates at 23.3 percent the added jobs and income the revitalized downtown business districts will bring will go a long way towards helping residents reestablish credit and finally start bringing themselves up out of debt. Once credit has been established FICO scores will start to go up making it possible for residents to reduce the amount of their subprime auto loan.

Businesses are already showing interest in the area, and some new shops and restaurants have opened their doors. This is also leading analysis to predict job growth around 2.3 percent. Once again this will help bring welcome financial relief to residents who are already dealing with the burdens that the come with the high cost of living in the area. As the downtown business districts continue to expand and grow, there is even talk that some of this could extend to outlying neighborhoods.

Downtown District

Roosevelt Row becomes Phoenix’s newest business district, despite complaints

Even though Phoenix is a large and sprawling metropolis with a dry, hot climate that makes walking uncomfortable and even difficult, many residents are finding that they can get by without a vehicle thanks to the city’s public transportation system.

With a greater emphasis being place on going “green” Phoenix has joined other U.S. cities and welcomed in “zip cars”. These cute, economic and eco-friendly vehicles can be rented by the hour and used to commute around the city. The rental fee also covers insurance and gas, which makes this an affordable way for residents to get around. There are also Uber drivers, along with the traditional taxi cabs.

Like most major metropolitan areas there is also a light rail system, which covers the entire downtown district. Even though residents living in the city center often find it easy to get around without a vehicle, the same cannot be said for those living outside the immediate downtown area. Public transportation in the suburbs is almost nonexistent, and residents in these neighborhoods can even find it difficult to get to the bus station if they don’t have a car. For residents living outside of the city owning a vehicle is almost a necessity, especially if they work more than a mile from their home. This means regardless of their credit scores they may have to look for subprime auto loans.

How I Live & Work Without a Car In Phoenix, Arizona

When it comes to walkability scores, Phoenix will also be ranked low. It is a desert city, which means heat and bright sunshine are constant. Even though the weather is not exactly conducive for walking, this doesn’t mean that you can’t get around on foot.

Many residents are starting to take notice when it comes to protecting the environment, and whether it is this or the ridiculously high cost of driving in the city more people each year are making the conscious decision to park their vehicles and walk. While this can be difficult for residents living in outlying neighborhoods, those living in the downtown area often find that walking is much easier than driving.

Copper Square and the Roosevelt district are still under construction, and drivers are never sure which street is open. Parking rates typically start around $20, and that is only for a couple of hours. With $4 billion already allocated for improvements in the downtown business district walking around will soon be something residents look forward to, at least for short distances.

People who live outside of the downtown area and work in the business district will still need a reliable vehicle regardless of their credit history. Even though this may lead to a subprime auto loan it is still preferable over losing a job due to an inability to get to work.

How I Live & Work Without a Car In Phoenix, Arizona

Even though Phoenix is the 6^th largest city in the United States and has a high school graduation rate over 80 percent, there are still issues regarding the quality of the education system. There are 482 public elementary and high schools in the city, which include charter and Montessori academies. While Candeo Schools received a rating of 10, according to the national group of realtors, when they are all combined the rankings quickly fall to 4. While part of the low rankings is based on the number of students per teacher, which tends to average around 17 to 20, it is also determined by the quality of the education programs.

The majority of the public schools use curriculums that are outdated or too broad to have any useful applications after graduation. This is also reflected by the number of residents who hold what is commonly termed menial jobs. Over 19 percent of the work force is in the service industry, which typically only pays the current minimum wage. With the cost of living in the city already 2 percent higher than the national average, it should come as no surprise that many residents are living off of lines of credit.

For families looking to provide a good education for their children, many of them will either need to move out to the suburbs or pay the enrollment and attendance fees charged by the Charter schools. With the already high cost of living and average annual income slightly over $46,000 affording to pay for their children’s schooling is a luxury many families simply cannot afford. This means that with children trapped in low rated schools their chances of receiving the education they need to truly succeed without living on credit are slim unless changes are made.

Best Schools in Phoenix

Phoenix Schools

Thankfully there are some public assistance programs that residents can take advantage of. Not only can residents get help with rent and mortgage payments, but also with grocery and utility bills. Simply being able to pay their bills on time can go a long way towards helping them get the credit rating they need to be approved for a car loan. This even applies to residents with a prior bad credit history. If you are truly interested in a bad credit car loan with reasonable interest rates the city even offers debt counseling to those in need.

For information about these and other programs designed to help residents manage their money and pay their bills they only need to call Social Services Department (Phoenix, AZ) (602) 262-6666. A friendly advisor will help residents set up the necessary appointments and begin authorizing them to receive the aid the need to “get back on their feet again”.

Public assistance in Phoenix

Phoenix recognizes that many of its residents, over 20 percent, are living at or below poverty and these rates are only going to get worse as expenses continue to rise. One of the most expensive and necessary bills are those related to health care, and this doesn’t even begin to cover prescriptions and continuing care.

There are programs and clinics that provide free health and dental care for qualifying residents. You can also receive help paying off past and even future medical bills. Prescriptions and some types of therapy are also covered. All of these state and local programs are designed to help everyone in the city lead happy and healthy lives, without ruining their credit or going deep into financial debt.

Residents can take advantage of these health care programs along with several others simply by calling Social Services Department (Phoenix, AZ) (602) 262-6666.

This will put residents in touch with a case worker that will go through all of their options and advise them on the best choices for them. Even though it is expensive to live and be healthy in Phoenix, the city has taken all of the appropriate steps to ensure that no one is forgotten. It should also be noted that the above listed phone number will be able to put residents in touch with programs that are designed to help them resolve past due hospital bills without ruining their credit.

Help with medical bills

With four professional sports teams an almost constantly warm and sunny climate, and surrounded by the vast beauty of the desert, there are plenty of fun activities for residents and visitors to enjoy. During the annual Barrett Jackson Auto Show and Auction visitors come from around the world to see and bid on some unique, rare and antique automobiles, and the numerous Jack Nicklaus designed golf courses are a popular tourist attraction.

The southwestern city is also home to the stunning Butterfly Wonderland, which is also the largest in America. There are over 30 fun water soaked rides at Wet n Wild, which is also a great way for residents to stay cool during the hot summer months. One of the best aspects of Phoenix is its wide variety of attractions, which makes the city really seem like it has something for everyone. Whether it is family fun or a night at one of the city’s fabulous restaurants and clubs, it’s easy to see why in just 100 years it has rapidly grown to become the 6^th largest city in the country.

Fun & Amusement

Phoenix is not a cheap place to live, and this can have an effect on your credit score. If you are not prepared for the higher than average cost of living in this southwestern city, your credit rating could start to fall. Before you sign a lease or mortgage, or even open another line of credit you might want to ask yourself a couple of questions. Do you already owe on a past debt or are you having problems making payments? Are you living paycheck to paycheck, with little breathing room in between? The most important question is are you living above your means? If you answered “yes” to any of these questions your credit is probably at risk.

Before you make any rash decisions or commit to another loan think about your financial security and your credit score. One mistake could have long lasting effects.