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Dave Ramsey urges graduates to avoid financing a new car purchase
The discussion cites a 7.14% average 60-month auto loan rate at commercial banks as of May and notes 14.7% of new auto loans had terms of seven years or more by end of 2025.
Yahoo Finance reports that Dave Ramsey told a recent caller, a 23-year-old college graduate from Massachusetts, that buying a new car after graduation is a top financial mistake, after she asked whether financing a new Tesla Model Y was a “stupid” decision.
In the segment, the caller said she had no debt and listed $25,000 in stocks and $3,000 in cash, with a new job lined up to pay $130,000, plus potential $30,000 in bonuses. She said the Tesla Model Y she was considering was quoted at an out-the-door price of $53,000 and that financing would involve a 2% APR, with a payment estimate of $442 per month for 72 months if she put $23,000 down.
The outlet also tied the advice to higher borrowing costs and longer loan terms, citing Kelley Blue Book data that the average transaction price for a new car surpassed $50,000 for the first time in 2025, and Federal Reserve Bank of St. Louis data showing the average 60-month auto loan rate at commercial banks at 7.14% as of May.
Yahoo Finance further noted an analysis by the Century Foundation that by the end of 2025, 14.7% of new auto loans had terms of seven years or more, describing that the prevalence of seven-year loans has about doubled versus early 2018.