Suze Orman’s Car Ownership Advice for Building Wealth

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Considering buying a car or already own one? Suze Orman offers a different perspective on car ownership that might just make you richer. Many view owning a car as a money pit—monthly payments, maintenance fees, and the inevitable trade-in for something newer and shinier. However, Orman believes you can shift this mindset for substantial financial benefits.

Save Money Without Sacrificing Quality

In her renowned “Money Monday” newsletter, Suze Orman advises individuals to rethink how they approach financing a vehicle. Rather than simply taking out a lengthy car loan, opt to purchase the most affordable car that meets your needs, finance it for the shortest duration you can manage, and enjoy the perks of long-term ownership by driving it for many years after it’s paid off. This approach minimizes your out-of-pocket costs and maximizes the money available for other financial priorities like an emergency fund or retirement savings, ultimately making car ownership a wealth-building strategy.

Understand the True Cost of Trading Up

Contrary to Orman’s advice, many drivers trade their cars too soon. According to data she referenced from Edmunds, a notable number of individuals trading in their vehicles in 2024 still owed money on their loans. Taking on new debt for a luxury upgrade might seem appealing, but it diverts funds from other financial commitments. Orman highlights how this behavior, which includes rolling an average of $6,800 remaining car payments into new loans, can set back your financial achievements significantly. Avoid the debt cycle by embracing long-term ownership of functional vehicles.

Drive Your Financial Success

By adopting Orman’s strategy, you can save thousands each year. Consider funneling what you’d typically spend on car payments into other areas like reducing debt or investing in your future. Financial freedom increases when you avoid unnecessary upgrades and focus on sustainability. After paying off your car loan, those monthly savings allow for strategic financial planning, whether you’re preparing for future purchases or investing in assets that appreciate over time.

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