I have concluded that, in the USA, most ordinary folks have, much to their detriment, never heard of Dave Ramsey.

https://www.daveramsey.com/blog/the-truth-about-car-payments

He's a mixed bag. Some sound advice, in particular the parts about living within one's means; but there's also things that are utterly unrealistic, like:

> If you were to invest that (...) into a good mutual fund with a 12% rate of return, you would have over $100,000 in 10 years! At 20 years, you would have made $470,000. And at 30 years? That mutual fund would be worth $1.6 million!

Maybe I'm not savvy enough but I have not encountered mutual funds that will reliably sustain 12% over three decades.

"Cash for Clunkers" took a lot of wind out of this particular sail. It crippled the used car market for years, and propped the door wide open for predatory "buy here pay here" auto sellers.

Nevertheless, I haven't had a car payment for so long that I can't remember the last time I paid one. Trips to the mechanic are frequent and costly, but at least I'm not uselessly paying interest.

I'm surprised Ramsey can have a successful national brand saying little more than infinite variations on "spend less than you earn", but there he is, and I guess some people need to hear it like that.

I've never personally owned a car, but I did grow up in a pretty car-centric area and am generally aware of my parents' purchasing decisions, in an environment where there wasn't a lot of money to go around.

If you must have a new car (we bought used fairly often, with good results), there are a dozen cars you can buy for around $15k, which works out to $270/mo with a 3.1% loan. I'm really stacking the deck here: I ignored cars that are too small, since I assume a family with children, I'm using a pretty high interest rate, and I'm ignoring used cars. Bear in mind that the _average_ payment means that it's ignoring the substantial amount of people who don't have kids and would be fine with a smaller car, or those with better credit who can get a better rate.

That being said, I don't know enough about the distribution of the discussed figure to say whether it makes sense in the way we're using it: $500 is the mean payment, not the median, so it would be a mistake to assume that there's an "average person" who pays $500. It's just as likely that some people have higher payments (that they can afford easily) and poorer people have lower ones.

You can buy excellent cars that will last a long time for far less than $500 a month. $500 a month for much more car than you need is a very poor decision because you can get by with much less and invest the rest.