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What I wanted to do here today in this video is share with you a little bit of what you can expect if you download the guide, what's in there, and share with you a couple of my thoughts on this whole process. So, first of all, some statistics that I just found absolutely astounding here. This comes from the 2013 Consumer Expenditures Survey conducted by the US Bureau of Labor and Statistics, and they actually say that the average car loan today is actually just over $30,000, and the average monthly payment for a car is $503 a month, with the average length of the loan being 68 months.
I'm not sure how you feel about that, but to me, that is absolutely astounding, how expensive cars have gotten here over the last few years. So, on top of that, not only are the cars themselves expensive and the car payments, but as you know, there's a total cost of car ownership that not only includes that monthly payment but also includes the maintenance on the car, the gas that you're going to have to put into the car, so you need to consider fuel economy, and also the insurance that you have to pay on the vehicle as well. That obviously is going to vary tremendously from one car to another, depending on the make and model and the year, you know, how fuel efficient is it. Some cars, you can replace the brakes relatively cheaply.
One of the things that we have in the guide here is I have a worksheet that really can help you put all of that together. So if you're shopping for cars, once you've got it narrowed down to maybe two or three or four cars, you can start filling out these worksheets here, maybe call your insurance company, find out how much the insurance would be on that particular make and model of car, maybe find out how much it costs to replace the brakes, and you can start putting together this worksheet to give you some idea of how much it's going to cost you to own that car for the year. Not just the payment, but all of the other stuff that goes into that.
First question is whether to buy or to lease. There’s a lot of different opinions about this. Some people feel very strongly one way or another. My personal feeling, and what I do, is I prefer to buy my cars. We buy cars and tend to hold onto them for a very long time, and my current car, just as an example, I think has 166,000 miles on it. The car still looks great, still runs great. It's been pretty maintenance-free, but what I like about that is the car's been paid off for several years now, so I haven't had a car payment I think in three years, maybe three an a half years. So the only thing I'm paying for is the gas and the maintenance and the insurance on the car.
The best way I think to buy a car, in my opinion, if you're trying to be budget-minded, is to look for a used car. I like to look for something slightly used. I like to look for something that's maybe two years old or less, and something that has low miles. Something that has maybe under 30,000 miles. And you usually save quite a bit of money by doing this. According to edmunds.com, an average car loses 11% of its value the moment that you drive it off the lot. So that's very significant.
During the first five years of car ownership, a car depreciates anywhere from 15 to 25% each year, so that means a car that's two years old might be 35 to maybe as much as 50% cheaper than a brand-new car. What's also good too is sometimes, especially if you buy one of these used cars from a dealership, sometimes they'll include a bumper-to-bumper warranty on the car as well, and that's actually what I got when I bought my last car. I had a factory certified used car that had a 100,000 bumper-to-bumper warranty, so if anything went wrong, I was covered. And that sometimes is one of the big issues that some people are concerned about with buying a used car, is if something goes wrong, having those expensive car repairs and everything.
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