Car Series (1 of 4): The Car Trap

Is this series for you?

92% of U.S. households have at least one vehicle (Pew Research Center), and the majority of us own one out of necessity, not luxury. 

Cars are sneaky. The monthly payment tends to get all the attention, but it's really the total cost of ownership that consistently lands cars as the 2nd most expensive line item in my clients' budgets. Once insurance, repairs, and (super high!) gas prices are factored in, the total cost of car ownership can quickly rival housing costs - especially since many households own more than one.

And because we need a car, it's easy to stop asking whether we need this car, at this price, on these terms. If you're seeking more financial flexibility and believe your vehicles may have something to do with how stretched you feel, welcome to a four-part series all about saving you money.

This series is for you if:

• Your car payment feels heavier than it should
• You owe more than your car is worth (or you're too scared to look)
• Your lease is ending and you have no idea what comes next
• You're eyeing a new car this December because the ads are everywhere
• You're crushing it at work but somehow have nothing left at the end of the month

If you nodded at even one of those? Stick with me for the next few weeks - a new issue lands every Tuesday in November. 

Why now? Because in a few weeks, every commercial break will be a car in the driveway with a giant red bow on top. Maybe even an adorable, fuzzy puppy in the back seat. Dealers push hard at year-end - and those ads are designed to make you forget about the 84-month loan that comes with it. Before the December temptations hit, let's get you clear on your numbers.

If you feel stuck, you're not alone

Have YOU looked at what people are paying for cars lately?! Because I have. And it's wild.

• The average new car payment hit a record $770 a month in early 2026. Used? $531 (Experian).
• Nearly 3 in 10 people trading in a car owe more than it's worth. The average gap? $6,884 (Edmunds).
• People who roll that old debt into their next loan pay an average of $944 a month (Edmunds).
• Missed payments among higher-risk borrowers just hit a 32-year high (Fitch Ratings).

I'm not sharing these to scare you. I'm sharing them so you know this isn't a you problem. Longer loans, higher prices and higher rates have made it really easy to end up underwater.

Your car costs more than your payment

Here's a number that stopped me in my tracks: the average new car costs about $1,072 a month to own once you add insurance, gas, repairs and depreciation (AAA).

Most people have never added it all up. I hadn't either - until we did and realized how much of our monthly cash flow was just... sitting in the driveway.

That realization is what led us to downsize 6 years ago. Saving money on car payments has allowed us to travel to France, Italy, Scotland, Ireland, England, Mexico and many other places. You'll get the whole story in Issue 4.

Your homework this week (15 minutes, tops)

Before Issue 2 lands, I want you to know your numbers. No judgment - this is data.

1. Find your payoff amount. Log into your lender's site or app. This is different from your balance, so look for "payoff."
2. Look up what your car is worth. Use Kelley Blue Book or Edmunds. Be honest about the condition and mileage.
3. Subtract. Value minus payoff = your equity. Positive number? You've got options. Negative number? You're underwater - and Issue 2 is for you.
4. Add up your real monthly car cost. Payment + insurance + gas + a monthly average for maintenance. Don't forget about car washes, parking, tolls and any paperwork like registration, taxes, and fees.

Write that last number down somewhere you'll see it. It's usually bigger than people expect.

What's coming in this series

• Issue 2: Already stuck? How to get out. Underwater, high interest rate, a lease you regret, or falling behind on payments. Your exit options, one situation at a time.
• Issue 3: How to never end up here again. Exactly what to do before you sign - landing right before the December deals kick in.
• Issue 4: How downsizing our car took us traveling. Our real numbers and how you can do the same. Plus, how I got my investments to pay for my car - and the steps you can take toward it yourself.