AUTO TRUTHS

Throughout this website we collide head on with any number of uncomfortable truths. 

Perhaps the biggest single uncomfortable truth of them all.
Our relationship with our automobiles.

Car loans are easily your number one wealth killer. 
At least your house go's up in value.
 Car loans have of late revealed themselves as America's number one wealth killer.

YOU LIKELY WILL, OR ALREADY HAVE, WASTED HUNDREDS OF THOUSANDS, POTENTIALLY MILLIONS OF DOLLARS FOR NO GOOD REASON AT ALL.

Hear Scrooge out. 
As of the time of this writing the average new care payment was $730 per month VS $523 per month for a used car payment. 
Also bear in mind a few other uncomfortable truths. 
Amongst the most inconvenient is that in recent times these loan terms are for as long as 72 months(or 6 years).

 But wait, there's more. 
Automobiles aren't one of those expenses that go away or are diminished in our older age. 
While some expenses do go down in our later years, we don't travel as much, our household responsibilities are largely handled by ourselves, and most of our miscellaneous items are sitting in the garage.
 Cars on the other hand we pretty much can't do without.
 Why this matters is often hidden to us. The financial decisions we make during our lives follow us to our last breath. 
That means those car payments we were making as young as twenty years old would have, if avoided, taken as many as five or six decades to swell into MILLIONS! 
That means it's worth it to you to completely re-examine your outlook toward car payments.
The bottom line, you should never have one. 
Ever.
 At the very least you have to aim for never, ever having one.

Here's why.
Here are just two quick examples of what car payments WILL do to your wallet.

EXAMPLE 1:
In the least painful of our examples, we'll look at what a single car payment at twenty years old has on our seventy-year-old self.
Twenty-year-old Bill buys a four-year-old used car. 
The terms of his agreement were a $400 monthly payment for five years (60 months).
The final cost to Bill for this used vehicle is $24,000.
 However had he instead put that $400 into an account returning 10% it would have grown to $30,624.49 over that six year period.
That's $30,000 in his account not the car dealers. 
But that's only the tip of the iceberg. What would that relatively small amount, paid off at twenty-six eventually represent?
To come to that figure, we take the $30,000. Bill's account would have grown to by age twenty-six and now invest it, without a single penny added, to age seventy.
 For that we just take $30,000 and track its return over the next forty-four years until age seventy.
The final tally?--- $2,186,714.51!!!
OVER TWO MILLION DOLLARS. 
And that's a single, once only payment originated in Bill's (or yours?) twenties.

EXAMPLE 2:
Olga follows our previous example of Bill except she is never able to completely break free from car payments.
As a result she pays an even steeper price. Though she does manage several ten year breaks from payments when she does buy another car.
There is always the five year commitment that goes with it.
Each of her five year commitments, when combined, equals up to $98,000 to the car dealer and not in her account.
If she had instead invested that money it would have, by the age of seventy reached..... wait for it,
$2,442,300.!!! 
Nearly two and a half million dollars.
Poor Olga, and Bill for that matter.

In both examples our two heroes are seventy years and old short at least two million.
All this having been said, there are of course some matters that need to be addressed.
For starters the vast majority of us (at least here in America) have to have a vehicle.
 It's a legitimate must for most of us.
 And we haven't even examined the other costs associated with car ownership (gas, repairs, insurance, etc).
Bottom line: Cars are almost always our most expensive necessity (second only to buying a home) and easily the most expensive DEPRECIATING ASSET.

O.K. So we need transportation but we also recognize how car payments could rob us of literally millions of dollars.
What exactly is the answer?
The reality is there is no perfect answer. 
Owning a car is going to cost you something and there are always more factors to consider.
Obviously you need to consider your situation. 
For instance you might work in the trades and for all practical purposes you genuinely need some sort of truck.
 Or your job requires a vehicle that doesn't qualify as a beater (i.e. real estate agent, sales).
So with all this we come to a conclusion we would rather not have to but must.
 We lower income earners are left with, for all intensive purposes, a few painful choices.

1. You will, in nearly all likelihood, just have to hold on to current automobile for YEARS longer than you would like to. 
That is to say hold on to it until the wheels fall off.

2. If you can't discipline yourself to hold on to your car for as long as you should (literally almost forever) then you are absolutely forced to make far more money than you thought you could AND find a number of other areas in your life where you can save more.

3. Impulsive or even "ordinary" car purchases equals MILLIONS of dollars down the road.

4. What we're dealing with here is no less than the number one wealth killer.