finance.yahoo.com 5 days ago URGENCY: 6/10
Suze Orman: Cars Are a Financial Trap
Suze Orman warns that many Americans are trapped in a cycle of car payments that jeopardize their financial future. Discover why rolling negative equity into new loans is a dangerous trend that could lead to long-term debt.
The Financial Danger of Car Payments
Suze Orman has raised a red flag regarding the way Americans handle car payments, labeling them as a significant financial risk. Many drivers are treating these payments as a never-ending obligation, neglecting essential savings for retirement and emergencies. This behavior is not only unsustainable but is also leading to a cycle of perpetual debt.
The statistics paint a grim picture:
- The average price of a new car reached a staggering $50,326 in December 2025.
- Monthly payments for new cars have surged to an average of $767, with 20.3% of loans exceeding $1,000.
- A shocking 29.3% of trade-ins involve negative equity, meaning buyers owe more than their cars are worth.
Orman emphasizes that while some factors are beyond consumers' control, such as rising car prices and limited affordable options, many are exacerbating their financial woes by continuously rolling over negative equity into new loans. This practice locks them into a cycle of debt that can be hard to escape.