# How much does an average new car cost? The answer will shock you.

How much does a new car cost? Let’s do an experiment to find out.

Grab a partner and take a drive to that stretch of road in your town where all of the car dealers seem to have agreed to open shop. As you drive past, have your buddy write down the prices in the wind shields. Inevitably, you won’t have a single actual price in your list. You will have what the down payment is, the cash back value (does anyone even know what that means?), and the monthly payment.

## The average monthly payment will be over \$400/month if you’re in America.

Visit the dealers’ websites. Find the prices there. Oh wait, you can’t. You’ll find people who look happy standing around cars with big letters on top of the image:

“0% apr* for 72 months!”

“No credit, no problem! We finance*”

*I’m not sure what the asterisks point to, but they’re always there.The average new vehicle loses about 75% of its value in the first 3 years. Which means at the end of that 72 months, the new tires and full tank of gas will be worth more than your car. So what do car dealers sell? Debt. And if you think for one minute that the “0%” rate is because the car dealer is giving you charity, guess again. They make out like bandits on the markup, selling your debt to a third party, and late payment penalties that about half the customers will face.

## FYI \$400/month over your working lifetime (40 years) invested at 10% is \$2.5million.

Even if I am half wrong, that’s a lot of money to pay for 7 cars (that’s how many you would get if you traded each one in at the end of the 72-month payment plan).

So what’s the average new car cost?

Between \$100,000 and \$200,000.

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