New analysis by The Pew Charitable Trusts showed again how much that monthly payment is critical to formulating a vehicle installment contract.

The report indicated the majority of American households are living paycheck to paycheck because analysts discovered 55 percent are savings-limited, meaning they can replace less than one month of their income through liquid savings.

Erin Currier, director of Pew’s financial security and mobility project, explained that even as the national economy continues to recover from the Great Recession, most U.S. families remain financially fragile. Authors of Pew’s report titled, “The Precarious State of Family Balance Sheets,” drew from multiple nationally representative data sources to develop what they believe is a clear picture of household financial security in the United States.

“Our analysis finds that many American families, even those with relatively high incomes, are walking a financial tightrope,” Currier said.

“Many have little if any cushion to absorb an unexpected financial setback. It’s a precarious state that threatens not just financial security, but upward mobility,” she continued.

Because families are so financially pinched, they’re stretching terms to keep their vehicle installment contracts affordable. According to the latest information available from Experian Automotive that took a glimpse of data from October and November, the volume of contracts ranging between 61 to 72 months jumped 40.3 percent year-over-year. And the increase for contracts lasting between 73 and 84 months climbed 25.7 percent year-over-year.

Meanwhile, Experian mentioned the average monthly payment for a new vehicle stands at $479, while for a used model the payment sits at $355.

More findings in the Pew report revealed widespread financial fragility, including

— Although income and earnings have increased over the past 30 years, they have changed little in the past decade. The typical worker had wage growth of 22 percent between 1979 and 1999 but just 2 percent from 1999 to 2009.

— Substantial fluctuations in family incomes are the norm. In any given two-year period, nearly half of households experience an income gain or drop of more than 25 percent, a rate of volatility that has been relatively constant since 1979.

— The Great Recession eroded 20 years of consumption growth, pushing spending back to 1990 levels. As a result, the net increase in average annual household spending is just 2 percent since 1990.

— Even when pooling all of its resources — including from accounts that are potentially costly to access, such as retirement accounts and investments — the typical middle-income household can replace only about four months of lost income.

— Most families face financial strain across all balance sheet elements: income, expenditures, and wealth. Fully 70 percent of households face at least one of these problems, with many confronting two or even all three.

— The report concludes by noting that policymakers should focus on policies and programs that support asset accumulation, which can help meaningfully improve American families’ financial standing.

Sources for the data in the report include the Congressional Budget Office, the U.S. Census Bureau’s Current Population Survey, the University of Michigan’s Panel Study of Income Dynamics, the U.S. Bureau of Labor Statistics’ Consumer Expenditure Survey, and the Federal Reserve Board’s Survey of Consumer Finances.