what your car payment is really costing your retirement

The average new-car payment hit $765 a month in 2026. This video isn't about whether you should buy a car — most people need one. It's about a question we rarely ask at the kitchen table: what could that same monthly cash flow become if it had a different job? We run a deliberately simple thought experiment ($765 a month invested for 30 years at a hypothetical 7%), stress-test it at 5% and 9%, build a more realistic "Path B" scenario with a $265 monthly gap, look at AAA's full cost of owning a car, and dig into the money psychology of why a monthly payment makes a big decision feel small. No lectures. No "never buy a car." Just the math, the assumptions behind it, and three angles that make the tradeoff visible — so whatever you decide, you decide it with your eyes open. Key figures in this video: Average new-vehicle loan payment: $765/month; used: $542/month (Experian, Q2 2026) Average cost to own and operate a new vehicle: $12,863/year, including $4,422/year average depreciation (AAA, Your Driving Costs 2026) $765/month for 30 years at a hypothetical 7% return, compounded monthly: ≈ $933,278 (contributions: $275,400). At 5%: ≈ $637,000. At 9%: ≈ $1.4M. Try your own assumptions with the Investor.gov compound interest calculator. Chapters: 0:00 The kitchen-table question 0:47 The averages (Experian, Q2 2026) 1:12 Two paths, same budget 1:37 The $765 experiment 2:20 The honest disclaimer 2:48 What 5% vs 9% changes 3:11 A more realistic Path B 4:05 The bigger bill (AAA 2026) 4:59 Money psychology: the monthly frame 5:51 The replacement loop 6:38 So what is the car payment really costing? 7:02 Three angles to look at the choice 8:14 Your turn Disclaimer: This video is for education and information only. It is not financial, investment, tax, or legal advice, and it doesn't consider your individual circumstances. All investment figures are hypothetical illustrations based on stated assumptions — actual returns vary, can be negative, and are reduced by fees, taxes, and inflation. Future dollars won't necessarily buy what today's dollars buy. Consider consulting a qualified financial professional before making financial decisions. Disclaimer: This video is for education and information only. It is not financial, investment, tax, or legal advice, and it doesn't consider your individual circumstances. All investment figures are hypothetical illustrations based on stated assumptions — actual returns vary, can be negative, and are reduced by fees, taxes, and inflation. Future dollars won't necessarily buy what today's dollars buy. Consider consulting a qualified financial professional before making financial decisions.