010 Buying a Car in 2024, or How Auto Financing Keeps You Poor

Ah, yes, the American Dream: a house in the suburbs, picket fence, and a shiny new car in the driveway. But is it your dream? Clever and aggressive marketing from a young age certainly has convinced you that to be somebody you need to drive a nice car. Yet the reality is that everyone else in the world is so focused on themselves, they don't even care, much less notice, what you drive. In essence, whatever you choose to drive is an expression of your ego . . . to yourself.

And the costs are HUGE. In a typical example for a car-buyer with Good or Very Good credit who is able to qualify for financing of 5-10% interest, over the course of a 60-month loan they will spend 25% more than what they're getting. For example, a $20,000 loan will cost roughly $25,000 -- if you're spending $25,000 for a $20,000 car, are you still getting a good deal? I think not! And add on top of that about 60% decline in the value of the car, and you're leaving $12,000 to disappear in thin air. By including depreciation, that $20,000 car actually costs you $37,000!

In this week's episode we talk about how much cars cost today, what interest rates are, and what are the average monthly payments, as well as insurance and operating costs. You'll learn what the most expensive and the most economical strategies are for buying a car, as well as a few tips and strategies for setting a budget, making an offer, and most importantly what to do with the cash you save when you don't have an auto loan and expensive monthly payments.

While military culture and car culture are deeply embedded within each other, and to be "cool" in the military usually means having the baddest, loudest, or fastest vehicle in the lot, being poor is most definitely not cool. Tune in to this week's episode of Service and Wealth to learn how new cars and auto loans keep -- or make -- you poor, and how you can avoid that trap. 

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