I recently read an article online the other day stating that the average cost of a new car is now just over $34,000. Believe it not, Edmunds expects that number to climb above $35,000 in 2017. Needless to say, cars are crazy expensive and these numbers are ludicrous.
The crazy thought is that the top four selling cars in 2016 were the Toyota Corolla, Toyota Camry, Honda Accord and the Honda Civic. All of those cars start at under $25,000. So why is the average so high at $34,000? My theory and probably a number of others is the very low cost of gas, which equates to larger SUV and truck sales.
The number one selling pick-up truck in 2016 was the Ford F-Series. A brand new 2016 F-150 Limited SuperCrew is about $60,000. So there you have it truck and SUV sales dramatically boost that average new car price.
If you purchase a $34,000 car at 2% APR over 60 months, you will pay $595 a month. That is a lot of money to throw at a car for 5 years. I’ve done a number of other related car post in regards to investing your car payment and the results are startling.
Millennials don’t fall victim to projecting your success via a nice, new, expensive car. It’s just not worth. Buy a used car for much cheaper and invest in an index fund instead so you can actually build wealth.