---
title: 'This Purchase Will Set You Back 5 Years'
source: 'https://youtube.com/watch?v=kWVEJNUZWII'
video_id: 'kWVEJNUZWII'
date: 2026-08-05
duration_sec: 74
---

# This Purchase Will Set You Back 5 Years

> Source: [This Purchase Will Set You Back 5 Years](https://youtube.com/watch?v=kWVEJNUZWII)

## Summary

The video discusses the financial impact of buying a brand new car, highlighting the high costs and the opportunity cost of investing that money instead. It proposes buying a reliable used car as a financially smarter alternative, showing how the savings can compound significantly over time.

### Key Points

- **The High Cost of New Cars** [00:01] — The average price of a new car is over $51,000, leading to a monthly payment of over $750, or about $9,000 a year. Including insurance and depreciation, the true cost exceeds $1,000 per month.
- **Opportunity Cost of New Car Payments** [00:14] — If the monthly payments were invested at an 8% average return, they would grow to over $213,000 in 10 years.
- **The Used Car Alternative** [00:28] — The average used car payment is $537 per month, which is $213 less than a new car payment. This savings, if invested, would be worth over $45,000 over 10 years.
- **The Five-Year Setback** [00:55] — The $45,000 gap represents about five years of investing for the average person, even if they invest $8,000 a year. Choosing a used car over a new one can set you back five years financially.
- **The Simple Lesson** [01:10] — To save the most money, buy a reliable used car instead of a new one, as the savings compound significantly over time.

### Conclusion

The video concludes that buying a reliable used car instead of a new one is a financially prudent decision, as the savings from lower payments can be invested and grow substantially, potentially setting you back five years if you choose a new car.

## Transcript

five years financially and most people don't even think twice about is buying a brand new car. The average price of a new car is now over $51,000, which translates to a new car payment of over $750 a month or about $9,000 worth of
insurance and depreciation, the true cost of owning that car is easily over $1,000 a month. At an 8% average return, if you invested those payments instead, in 10 years it's worth over $213,000 if it's in the market. But of course,
that assumes you drive nothing at all, but in most cases you're going to need a car. So what I propose is getting a reliable used car instead. The average used car payment is $537 a month, so it's $213 less per month than the new
same commute and your life pretty much stays the same, but that $213 a month invested over 10 years is worth over $45,000. That's $45,000 for doing nothing except for choosing a used car over a new one, and this is what sets
people five years back. Even if you invested $8,000 a year, which is two to the country of what people invest, the $45,000 gap represents about five years So the lesson here is simple, you want to buy a reliable used car, you want to
anymore, and that will save you [music] the most money.