This piece is part of my 2016–2026 archive migration. Some original formatting, content, and external links may be missing, changed, or not be optimized.
Driving yourself into debt
What an interesting find this fact is: “Currently, 85 percent of all new car purchases in the United States are financed, up from 75 percent in 2009 (Source: PIRG). It’s called driving yourself into debt.
But wait, it gets better…
“The average monthly car payment for new cars is $667. The average monthly car payment for used cars is $515. 38.22 percent of consumers financed new vehicles in the second quarter of 2022. 61.78 percent of consumers financed used vehicles in the second quarter of 2022 (Source: Bankrate).”
Quick note: Having a car payment is not bad if you can afford the car payment, don’t have any other debts, have an emergency fund, and are on track for retirement.
What Is Your Car Situation?
Most likely, you have a car loan, but if you don’t, congratulations. You are a part of a small society of people who either own their car or don’t own one because you can’t afford one; the latter is a blessing in disguise.
It is always better to not buy a car if it doesn’t work for your budget instead of being like most people trying to force things to work out financially.
Most People Don’t Want To Wait
Not only do people lack patience for saving, but they don’t want to buy a used car because they desire everything brand spanking new. There is nothing wrong with wanting a new vehicle that has 100% never been driven before, but what about your bank account at the end of the month?
Will you be shaking in your boots, low-key stressed, or feeling a bit bitter about any of your purchases? We’ve all felt these feelings before over something concerning money; if you haven’t, you’re very lucky because stressing about money is never pleasurable.
The Car Payment Never Leaves
85% of people – probably more – maintain a car payment.
Once they pay off the car note or trade it in, they get another car with a bigger payment.
That’s how the game of consumption works; it never ends.
The same usually applies to homes and credit cards. Most people claim they enjoy paying off their debts, but not enough because they often find themselves right back where they started.
Time Is Money
Recently, I met a woman who has a brand new car. Yet, she has to work 11-hour shifts throughout the week just to be able to afford the car payment.
Does this sound like freedom? Not to me.
I’ve learned the best way to handle my money is to frequently do the opposite of what everyone else is doing.
If I get a car, I may not throw 100% cash down, but I will ensure that when I get the car, my net worth is still positive.
Never go into debt to purchase a car.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.