How Much Car Can I Afford?

Don’t Let the Cost of Owning One Drive You

Gregory Karp

How Much Car Can I Afford?—Less Than You Think

For many consumers, the logic goes like this:

“I need a vehicle for transportation.”

“New vehicles cost about $30,000.”

“I must spend about $30,000 for a vehicle.”

The problem is the third notion, the conclusion. It’s lazy thinking that stems from “wants”—car lust—rather than an analysis of “needs”—transportation.

“The worst auto accidents you’ll ever see occur on the showroom floor,” says get-out-of-debt specialist Dave Ramsey, author of The Total Money Makeover.

Those accidents happen as consumers sign up for years of crippling debt to buy vehicles they can’t afford. Americans have quickly gotten used to new car ...

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