Approximately 58% of American adults under the age of 35 will purchase a car that has a negotiated price of $40,000 or greater. This is hardly a surprise, as the Kelly Blue Book has indicated that the average price of a new car crossed the $33,500 last year. The purchase of a new vehicle is something that takes a huge toll on wealth accumulation.
This is because people tend to focus on whether they can handle the monthly car payment rather than analyze the cumulative cost of those car payments to figure out the true cost (which includes interest payments for purchasing the car). With average interest rates for those with credit above 630 is 4.5% for car loans, those monthly $400+ payments are going to cost just shy of $10,000 in interest tacked onto the cost of a car.
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