Suze Orman, the well-renowned financial expert, is advocating for a significant shift in consumer habits when it comes to vehicle ownership. In a recent conversation with Go Banking Rates, Orman emphasized the financial benefits of holding onto a car for a longer duration. Instead of leasing or purchasing a new vehicle every few years, her advice is to maintain ownership for at least 15 years. This perspective reflects a growing trend among American car owners, where the average age of cars and light trucks reached an impressive 12.6 years in 2024, up from 12.5 years the previous year.
Orman’s philosophy is straightforward: “When I buy a car, I keep it for at least 10 to 15 years or longer.” Currently, she is nearing 12 years with her vehicle, with no immediate plans to change. This stance resonates with many consumers’ shifting attitudes towards car ownership, especially as vehicle costs continue to climb.
Critiquing the common practice of frequent vehicle upgrades, particularly leasing, Orman remarked, “I don’t buy or lease a car every three years just to impress strangers.” Her perspective is increasingly relevant in a market where the average monthly payment for a new car is reported at around $735— a slight increase from the previous year— and used vehicles are averaging about $523. Such financial commitments are becoming increasingly daunting for many consumers.
The cost of vehicles has escalated dramatically, with the average price of a new car hitting $48,247 in late 2023 and used cars averaging $26,091. Given these substantial expenses, the benefits of keeping a car for a longer period become evident. A recent analysis found that over a span of 39 months, leasing ended up costing approximately $16,622 versus $18,910 for purchasing. However, buying a car allows owners to build equity, with the vehicle still retaining about $11,512 in value at the end of that period.
Orman’s cautious approach has significant implications for consumers. In 2022, about 91.7% of American households owned at least one car, with nearly a quarter owning three or more. This prevalent ownership hints at the potential savings for those who break the cycle of constant upgrades and high payments. In tough economic times, the prospect of minimizing payments and maximizing investment becomes increasingly attractive.
As economic uncertainties loom and vehicle prices rise, Orman’s advice to focus on long-term car ownership is likely to resonate even more with consumers. By resisting the allure of new cars and the habit of frequent leasing, individuals can save significant amounts over the lifespan of their vehicles. This fiscally responsible practice not only makes economic sense but aligns with a broader trend recognizing the value of financial stability and long-term asset ownership.
In summary, as consumers navigate the complexities of the current automotive market and rising living costs, long-term vehicle ownership emerges as a prudent choice that encourages fiscal responsibility and smart investment practices. Embracing this mindset could ultimately lead to substantial savings and financial peace of mind for many households.