No one really looks at the big picture when it comes to car payments. Everyone looks at the monthly amount but not the end price that you are paying. In all reality, when you are paying for a car on a monthly basis, you end up paying a lot more then what you would if you bought the car straight up. The mark up for it being paid off like a loan is unbelievable. Paying a crazy amount of money every month for a car is definitely not worth it. Assume that you pay $300 a month for a car and every year or two you exchange it for a new one. Obviously the main benefit of that is you will always have a new car but there is a major downside. That is a big loss of potential money.

If you consider it this way, you buy a cheap car for only a few thousand dollars then put that $300 monthly payment in a savings account at a bank with about 12% interest rate every year, you will start to build a lot of money. If you do this every month for twenty years, you will end up with over $300, 000. That is a whole lot better then having a new car for 20 years straight, right? Now let's assume that you are able to pull this off for thirty years. That is a very impressive amount of money coming back to you which is over one million dollars.

This is simple math, and if you switch it up to a $400 a month payment for 30 years, that is almost one and a half million dollars. You should pay attention to the opportunities which you have and take a pass on paying the crazy interest rates which car loans carry. You will not regret this twenty or thirty years down the road when you have enough money to semi-retire on. You will be able to buy a new home and sit luxurious for a few years with your family. That is definitely better then having a new car every year, right?