Congrats on Your New Car (Payment)

It’s always a bit puzzling when people boast about going further into debt. Every time I scroll through social media, I seem to find someone proudly showing off their new car. Is borrowing money really something to celebrate now? “Look at me, I just started another six years of monthly payments!”

I can’t help but feel skeptical when I see these posts.

One person even shared their new car purchase along with their payment details, claiming that buying new was a better deal because of the zero-percent interest rate. They felt like it was a smart move, saying that the same monthly payment allowed them to spend more on the car.

I’m not impressed. It’s as if people are blind to the bigger picture. Imagine if I had access to $200,000 in credit—personal and business credit cards combined. Would it be wise to go on a shopping spree, buying a yacht, a helicopter, or even a private island just because I could afford the monthly payments? Of course not. Why would I go into massive debt to buy things I don’t need?

The Real Cost of Financing

Here’s why financing purchases like cars, furniture, or anything else can be a terrible financial choice. If you have the money to buy something in full, then maybe a low-interest deal is worth considering. But, if you have to borrow money to make the purchase work, you’re not helping yourself in the long run.

The problem is that when you focus on just the monthly payment, you start losing sight of the true cost of the purchase. The temptation to spend more increases when you think only about how much you’re paying per month.

That’s how you end up financing a $35,000 car that you’ll be paying off until your kid’s college graduation.

Congrats, You’ve Got a New Car Payment

In my opinion, cars should be bought with cash. Or at the very least, you should only buy one if you can afford to pay for it upfront. I understand the appeal of 0% APR offers, but the key is to do the math before jumping in.

Here’s the reality: when you finance a car, you don’t own it—not until you’ve made all those monthly payments. The bank owns it until you’ve paid off that loan, and you’ll be stuck with those payments for years. That “new car smell” may fade in a few weeks, but the payments? They’ll last a lot longer than that.

Buying a car on credit might feel like a good deal in the moment, but in the end, it’s just another loan that you’ll have to keep up with. So, before you get too excited about that new ride, think about whether it’s worth the long-term commitment.