Cost of a vehicle at all-time low

The Vehicle Affordability Index now shows that cars are the most affordable they've been since Jimmy Carter was president.

That's partly because of the intense competition in the car market that makes new vehicles a real deal at this point.

To arrive at this finding, researchers took the average income and figured out how many weeks you'd have to work to equal the average cost of a vehicle. The result? 23 weeks of work.

But here's the disturbing news: We're snatching defeat from the jaws of victory. First off, the average length of a loan is now 63 months, which is way too long. Second, repossessions have skyrocketed at all levels of car purchases -- partly because of the economic downturn.

42 months is the longest auto loan you should ever take out, according to Clark. If you can't afford the payment on a 42-month loan, then you need to buy a cheaper car. Paying cash upfront for a vehicle is always a good idea too.

Meanwhile, the price of used vehicles is down because there's too much supply. CarMax is among the major used-car sellers that's really taken it on the chin. So in addition to the great deals on new vehicles, there's never been a better time to buy a used car either. As always, remember to get a mechanic to carefully vet any used car before you actually buy it.

In related news, Clark recently read that an SUV purchased today will be worth a mere 30 cents on the dollar in 36 months. That's food for thought!