Is Your Car Busting Your Budget?


– Today we’re going to talk about how to keep America’s favorite status symbol
from stealing your future. (upbeat music) All right, the reality
is, cars are expensive. And listen, the normal way of thinking is that you just go get a car loan because there’s no way you could save up and pay cash for a car. In fact, 44% of American’s
carry a car loan around. Now, the average car
payment is $545 a month. Ah! But it’s costing you even more than that. So, in this episode, we’re
going to talk all about cars. I’m going to tell you the
truth about car loans, share some inspiring stories
of people just like you paying off their car loans, and I’m going to go visit a mechanic who’s going to give us all the secrets to actually saving money
on your car repairs. But first, let’s talk about
one of the biggest ways to put money back in your pocket. Look, I get it. Cars are a status symbol
in our world today. People look at your car and just assume they know everything about you. And you might see someone
drive this really nice car and you just assume that
they have a lot of money. But the truth is, most
people do not own their cars. No. They are paying the
bank, not themselves. And in my personal, humble, wise opinion, a car loan is honestly, probably
the dumbest type of debt that you can get into. Because look, just look at the math. You’re taking out a loan and
paying interest on something that is going down in value. So, mathematically
speaking, this is not smart. So, let’s just look at the
reality of car payments today. Okay, it’s a lot of
numbers, but stay with me. The average car payment
is $545 over 69 months. So, almost six years of paying
$545 every single month. I just keep thinking about
how many pairs of shoes I could buy with that much
money, you guys. It’s insane! And then, on top of that, your
car loses 25% of its value the instant you drive it off the lot if you buy a brand-new car. Now here’s where the math really gets you. The average total car loan is $31,722. Now, by the time you
finally pay off that car six years later, you’ve actually paid
$37,605 in car payments, now on something that’s worth $10,000. Yes, because your car goes down in value over those six years. So, when you look at it, it’s just crazy. Now, on the other hand, what would it look like
if you paid cash for a car and you invested that car payment instead of paying it to the bank? So, if you invested $545 a month with the average annual rate
of return of 10–12%, in about 30 years you would
have $1.4 million. Yeah, I hope you like the car. I mean, I heard that and I was like, “Oh my gosh, that is insane—
over a million dollars.” That is what your car
payments are costing you. So do not cripple your
future with a car payment. You can pay for a car in cash. People do it every single day. And guess who’s about to do it? (piano music) That’s right—baby number three. We’re changing cars. And I’m about to buy a car, and I don’t think I’ve ever
been this excited, you guys. Because I’ve had a change of heart. For so long I said I would
never drive this type of car. I said, “No, no, no. I’m going to be cool mom. I’m not going to drive this
certain type of car.” Now, pregnant, two kids later, lifting that dang car seat
up in an SUV for four years, I thought to heck with that. Bring on the minivan. That’s right, the Cruzes
are getting a minivan. I am so excited. Can I just tell you, when we
knew we wanted to upgrade cars, I wanted bucket seats. I had the things in
my head that I wanted. And Winston was like, “Babe,
we should look at a minivan.” And I was like, “No, Winston.
We’re so much cooler than a minivan. No.” So then I go online and
I build out this cool Suburban. Okay, well that cost
basically the price of a house after I finished it all online. And I was like, oh my
gosh, that’s so expensive. I was like well, I’m just
going to go on Toyota.com and look up the Sienna
and just build one online. I started building this thing, you guys. I had no idea that
minivans were this amazing. I mean, I knew like the automatic doors, but even like the cup holders you could turn on warm or
cold depending on your drink. I mean, all of sunroofs that you can have, all of the DVD players. I mean, there is a vacuum—
a vacuum built into the van! I mean, I was absolutely sold. And then the price of this
minivan that I built online was a third of the dang Suburban. I was like, I could buy three
of these amazing minivans for one Suburban. I thought, “Babe, we are a minivan family.” So, we’re about to go test drive, and we’re about to go buy my dream car. And I’m so excited, I really am—minivans are just amazing. And here’s the deal. I said, this got me over the
hump of the minivan purchase. Because I was like, this
is my five-year car. When baby boy turns five
and he goes to kindergarten, mama’s going back to an SUV. But for five years—for five years— I get to press a button and my doors open. Uh huh, bring it on. Bring it on minivan. So excited. And you better believe that, yes, we are paying cash for the minivan. Now, if you’re out there and you’re going car shopping just like we are, and you don’t want to get a lemon, make sure to click the
link in the show notes for our used car checklist to make sure you get a great used car. Because, listen, saving up
for a car, it takes time. I get it. I know. We’re doing it. But you can do this, I promise. And if you still don’t believe me, that car payments are just, you know, it’s just a way of life. Listen, if you do not believe that you can pay cash for a car, here are a couple of stories
of people just like you from my Facebook community that paid off all of their
car loans. And it’s amazing. Lydia said, “Yes, we paid
off these two car loans 18 months early and no
longer have car payments. Now we can use that money to tackle our last two chunks of debt,
and then we will be debt free. I can’t imagine how awesome that will feel because just having our cars
paid off is super rewarding.” Megan said, “The Dave
Ramsey plan has given us the cup of reality that we needed to hear after we got married and I love it. Maybe I can’t splurge and
go shopping or eat out, but it’s worth it once we see
the debt fly out the window.” I love it. See guys, they’re doing it. You can do it. And just think about how much money that they’re going to have
back in their pockets now that they do not have a car payment. I mean, how amazing would
that be if that was you. Now, another way to put
money back in your pocket is to use one our
Endorsed Local Providers. Okay, these are independent agents who shop current rates on all
types of insurance for you, and ones that you might
be overspending in, like car insurance. Finding an ELP can save
you $700 in 12 minutes. So make sure to click the
link in the show notes to start saving today. All right, coming up next,
I’m trading in my heels for a pair of flats and
heading to the mechanic. That’s right. Yes, he’s going to give us all the secrets on how to save money on car repairs. All right, so there are
some surprising ways that you can save money when you are doing repairs on your cars. So I brought an expert mechanic, Cody, here. And we are here at your shop, Cody. – Yeah. – Thanks for letting us barge in. – Absolutely. – I know, this is so fun. Okay, there’s really five main
places you can fix your car: dealership, mechanic, tire
store, auto repair shop, – Yep. – and your house. – Yeah. – So, I want to walk
through each of these, going from the most expensive, which we know is the dealership. I don’t know much about cars, Cody, so you’re going to teach me a lot. – Yeah, let’s do it. – But I do know the dealership
is the most expensive. So, why would you need to take
your car to the dealership? – I would say any time
you’ve got something that’s within the manufacturer’s
recommended warranty period. – [Rachel] Okay. – You know, sometimes that’s
36,000 miles to 60,000 miles. Or if there’s some
type of a safety recall, often times, those repairs are free. No charge to customer. – Yeah, yeah, yeah. Because dealerships really
are—they’re expensive, right, when you’ve got to take it there? – Yeah, absolutely. – So you want to avoid that if you can. – Yeah. – Next would be a mechanic.
– Right, right. – Where you actually go—like yourself— to a professional to help fix your car. So when would you for sure
want to go to a mechanic? – Everybody’s range of what
they feel comfortable with is different. – [Rachel] Yeah. – Oil changes— a lot of people think
that oil changes can be . . . you know, they can do them
at home and save money. – [Rachel] Yeah. – By the time you buy the
oil, you dispose of the oil, you’re really not any further ahead. – Because the average oil change is like— – $35, you know sometimes
you’ll find a special $29.99 or $19.99. – Totally, so you may save
five bucks here or there. But the hassle—just having someone do it, without all the tools is great. – Right, right, absolutely. – Okay, and like electrical
issues and stuff with cars. – Electrical stuff, check
engine light issues. – [Rachel] Yeah. – When it takes some
specific diagnostic equipment and knowledge is when you
might need a mechanic. – Okay, perfect. Next, kind of a step down from that I guess, is a tire store. You can go to a tire store,
obviously get new tires there. – Right. – But they’ll actually
do other services for you for free sometimes, right? – Right, a lot of tire stores
take care of slow leaks, a nail in a tire, something like that. – [Rachel] Yeah. – Most of your big chain tire stores do free rotation, balance, you know for the lifetime of your tires. – Oh, yes. Okay, how often do I need
to get my tires rotated? – Recommended is
every other oil change. – Okay. – Like 6,000 miles to 8,000 or 10,000 miles. – Okay, get tires rotated. – Take advantage of it. – Yeah that’s so good, so good. Okay and auto part stores, which are kind of separate. Like Advance Auto Parts, all
that—I see those around. So why would you go to
somewhere like that? – Again, they do a lot
of free services too, like testing batteries,
alternators, starters. And they will actually
install batteries for free. – Oh, seriously? – A lot of light bulbs
they’ll install for free. Stuff like that. – So would you recommend,
like a light bulb, that’s a great example, like go buy it at the auto parts store? – They’ll sell it to you and a lot of times they’ll
install it and everything. – Yes, so nice. All the tiers, you guys,
of ways to save money. You don’t just have to
take it to the dealership. Think through it all. And last but not least, the
cheapest way is your home. Things you can do at home . . .
I’m fascinated by this, Cody. So you’ve got to teach me. So, what are things that
you can do at home? – I mean, again, it’s whatever
you feel comfortable with. – [Rachel] Yes, yeah. – You know, watch some videos online, and if you feel like tackling it, and as long as you’ve got the tools, and just make sure you
use a jack and jack stand. You know and you’re working
safely around your car, if you’re getting underneath it and stuff like that. – Yeah for sure. Some of the things my
husband is huge on— he changed our oil for awhile— but then the convenience aspect . . . – [Cody] Yeah. – He was like, I’m just going to take it in. Because he’s literally like,
I think I’m saving five bucks. – [Cody] Right, right. – But changing our air filter
and our windshield wipers. – Yes. – Cruzes, we do this at home. I cannot attest that I
do this, Cody. He does. – Yeah. – But those are two great
things to do at home, would you say? – Yeah, yeah. Oh yeah. For sure. And again, you might
want to teach a child. A child that’s never been
exposed to working on something. – [Rachel] Yeah. – They may enjoy changing
the oil and stuff like that. – So an air filter. So changing an air filter, pretty easy. – [Cody] Pretty straightforward. This one is really easy to get to. Every one’s going to be different. You know, look at your
owner’s manual—it usually tells in there exactly where it’s at. They just all come apart differently. Some have screws, some little clips. – Okay, I’m going to ask a really . . . Cars—I don’t know cars. So, when you see a box like
this, is this for sure— this is the air filter? – [Cody] Not necessarily. – [Rachel] Oh. You’ve got several different— – Compartments.
– Resonators. – But when you lift it up . . . – Yeah, inside is the air filter. – Oh, that’s it, okay. – You’ve got the clean side
that goes towards the engine, and the dirty side. What I usually do— the easiest way—is to put it up to the sun. If you can see light
through it, it’s okay— it’s still fine. If you can’t see light through it, then it should be replaced. – How often should you replace it? – Every 15,000 to 20,000 miles maybe, or as it gets dirty. – Okay, and this is something
you can just order off Amazon or get at an auto parts store? – You can get it on Amazon. Just make sure you order the right one. – [Rachel] Yeah, okay. – Local parts store . . .
Amazon’s a little cheaper. – And it just slides right in. – Slides in. – Beautiful. – Make sure it’s clipped back in properly. – So nice. Easy enough. Okay, and then windshield
wipers—easy one to fix. – Yep. – So, I say easy to fix, but you’re going to prove to me it’s easy. – Yeah, they’re easy. So this one, every one is different. Again, read the directions,
watch a video online. But this one just pops up. This pops up. Obviously be careful lifting that up. This thing is spring loaded. If you let it go, you’ve got
to replace your windshield. It’ll shatter that really easy. – [Rachel] Okay. – It just pops out. – [Rachel] Click it in,
just like a little lever. – Slides back in just like that. – [Rachel] Easy enough
and that costs what, if you did that at home? – I mean if you did that
at home, the wipers— you can get them online probably for $5 or $6 a piece. – Yeah, versus a dealership. – Yeah, a dealership would probably charge $20 or $30 a piece for each wiper. – Oh my gosh, so good. Cody, you’re awesome. – Thank you, you guys are awesome. – Thanks for showing us how
to save money with our cars. We can all do it, so thanks. – Absolutely, anytime. (upbeat music) – All right, wasn’t Cody so helpful? Seriously, I love his tips and tricks. They were so great. All right, you need your
money working for you and not against you. And one of the best ways for
your money to work for you is by making sure you
have term life insurance. Term life insurance is very inexpensive. You can secure your family’s future for a fraction of what it costs
to get whole life insurance. Actually, over half the population thinks term life insurance costs three times more than it really does. And it’s something that will actually take care of your family, unlike that $500 a month car payment. Winston and I use and
trust Zander Insurance. Zander makes things super easy. They walk with you through
every step of the process, shop all the top carriers
to find you the best rates, and make sure you’re getting exactly what you need for your family. They’ll give you a huge piece of mind for such a small amount of money. To find out for yourself, go to zander.com and get a quote today. All right, hope you all
feel empowered because I do. I really hope that you see it is possible to live life without a car payment, and how this one decision could
literally change your life. Thank you again for my
guest for coming on today. And thank you guys for
watching this episode. And if you haven’t yet, make sure to subscribe to my podcast and you’ll get even more teaching on this and all kinds of money topics. And as always, be sure to
take control of your money and create a life you love.

About the Author: Michael Flood

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