Ramit SethiRamit Sethi: The No-BS Guide to Living a Rich Life

Watch this if you're planning to buy a new car #income #money #budget #financialfreedom

4 Mar 2023 · 1 min

Watch on YouTube

0:39

Short advice video explaining why buying a car based solely on monthly payments is misleading. Using a $75,000 truck example at 5.5% interest with $0 down over five years, the speaker shows the true cost (about $91,000) and notes additional ongoing costs (fuel, maintenance) that push the real cost above $100,000.

Questions this video answers

$75,000

5.5%

$0 down

Five year loan

About $1,432 per month

Chapters

This is why you never buy a car based on monthly payments. You need to understand that car dealers are there to make the maximum amount of money from you. Let me show you how it works. Assume you're buying a $75,000 truck at 5.5% interest. If you put 0 down with a five year loan, you'll pay about $1,432 a month and the total amount you pay for that truck will be about $91,000. Let me say that again. You thought you bought a $75,000 truck, but it's actually costing you 91,000 plus the incremental gas, plus all the other assorted maintenance, which means your truck actually costs way over $100,000.