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According to the Federal Reserve Bank of New York (1), US households collectively carry $1.66 trillion in auto loan balances as of Q3 2025. While there can be many different reasons to justify taking out a large auto loan for Emanuel of Texas, that justification seems to be a “super difficult mother-in-law.”
As explained to Dave Ramsey in an episode of The Ramsey Show, Emmanuel bought a car despite being unemployed, because he did not want to rely on his mother-in-law’s vehicle (2). Making matters worse, Emanuel bought a car he couldn’t afford and now owes $56,000 on the auto loan, with monthly payments coming in at $1,200.
“I’m sorry, there’s no family dynamic that needs a $56,000 car; that’s absolute bullcr-p,” Ramsey said. “What ridiculous family dynamics lead you to buy a $60,000 car you can’t afford?”
As Emanuel struggled to justify his purchase, Ramsay and his co-host Jade Warsaw were left incredulous. But the unfortunate reality is that Emanuel is not alone, and his story highlights how an irrational car obsession has driven many Americans into unsustainable debt.
The rising cost of cars, along with rising interest rates, has created a double whammy for the average American family’s transportation costs in recent years. According to Kelly Blue Book, the average price of a new car in September 2025 was $50,080, the first time the price has exceeded $50,000 (3). Meanwhile, the average auto loan interest rate for new cars in October 2025 is 6.90%, per Edmonds (4).
Households are also increasingly burdened with service costs associated with their vehicles. According to Experian, drivers pay an average of $2,320 annually for car insurance through October 2025 (5).
If you find yourself saddled with large insurance bills, there may be ways to lower your monthly car expenses.
You can shop around and compare auto insurance quotes from major providers near you for free through Official Car Insurance.
Here’s how it works: Enter some basic information about yourself and the make and model of your car, and OfficialCarInsurance will sort through its database of thousands to show you the lowest rates available.
Compare offers from leading insurance companies like Progressive, Allstate, and GEICO, and unlock rates as low as $29 per month. The best part? This process is completely free and does not affect your credit score.
The miscellaneous costs of car ownership are also increasing. Due to high interest rates and unpredictable gas prices, American drivers spend about 18% of their income on car-related expenses, while the average Gen Xer spends about 21%, according to MarketWatch Guides (6). Meanwhile, Edmonds reports that nearly 20% of new car loans require monthly payments in excess of $1,000 (7).
If you bought your car a few years ago when rates were sky-high, or your credit score has since improved, you may be able to negotiate a lower interest rate on your auto loan. The result? Lower monthly payments or the ability to pay off the loan faster.
Read more: Warren Buffett used 8 solid, repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich).
Although Ramsey and Warsaw acknowledge Emanuel’s need for independence and personal boundaries with his mother-in-law, they both agree that an expensive, cumbersome car is not the best solution. Taking out this loan despite his financial situation was a reckless and “stupid decision”, according to Ramsay.
If you find yourself in a similar situation and are trying to avoid the debt cycle, consolidating your outstanding debts into one may be a good place to start. This way, you can end up with just one loan at an ideal low interest rate, helping you get out of debt faster.
If managing a budget feels overwhelming, apps like Rocket Money can simplify the process.
Rocket Money tracks and categorizes your expenses, providing a clear view of your cash, credit, and investments in one place. It can also unlock forgotten subscriptions, helping you cut unnecessary costs and save you hundreds annually.
For a small fee, the app can negotiate lower rates on your monthly bills, making it a valuable tool for keeping your finances on track.
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Federal Reserve Bank of New York (1); Ramsay Show (2); Kelly Blue Book (3); Edmonds (4; Experian (5); MarketWatch Guide (6); Edmonds (7)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
