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Former NBA star Charles Barkley shared in a recent interview with Shannon Sharpe on the Club Shay Shay podcast that it took a reality check from his mentor, Dr. J, to help him learn some financial wisdom.
“I first was an idiot when I got my money,” the 61-year-old said. “I had like three or four cars…Dr.J says, ‘How many of those cars can you drive at the same time?’” Barkley recalls. “‘Why you got four? This money got to last you the rest of your life.’”
This shifted his perspective on money and cars forever. Here’s why abandoning the car obsession could change the lives of ordinary Americans, too.
National obsession with cars
It’s not just celebrities and professional athletes splurging on automobiles. The average American family owns more cars, spends more on them, and drives further than their counterparts in the rest of the developed world.
In 2022, there were 860 cars for every 1,000 people in the US. By comparison, there were 677 in Canada and 627 in Germany. Most US households (91.7%) had at least one vehicle, and 22.1% of households had three or more vehicles, according to the Department of Transportation. The average American commutes 41 miles a day, much more than the average of 18 miles in the EU.
Additionally, American drivers spend 93 billion hours behind the wheel each year. It’s no surprise that, along with the cars themselves, gasoline is one of the biggest recurring household expenses in the US.
One way you can earn more at the pumps is by using the free Upside app, which allows you to earn up to 25¢ per gallon with your credit or debit card every time you fill up.
It’s a simple way to make your money go further, especially as gas prices fluctuate. Use promo code AFF25 to get an extra 25¢ per gallon bonus on your first transaction.
In addition to this, our car obsession is costlier than you may think. In the second quarter of 2024, the average auto loan for a new car was $40,927, with a 6.84% interest rate and monthly payments of $734.
Simply put, families can save a lot of money by opting for cheaper cars, using public transport, or sharing.
That was Dr. J’s recommendation to Barkley as well. He said, “Son, don’t waste your money on cars. Everyone knows who you are. If you bought a car for $70,000 or $80,000, instead of $300,000, you would’ve had $200,000 more in the bank, and it would have been growing and growing.”
Lower auto costs
Downgrading and trading in your car for something cheaper is usually the quickest way to lower your auto costs. Ideally, buying a used car for less than market price in cash allows you to avoid the auto loan and associated expenses.
However, if this option doesn’t appeal to you, there are other ways to reduce vehicle expenses. Switching to an electric vehicle (EV) can save you about $1,100 annually in fuel and maintenance costs, according to nonprofit Coltura. Switching to a pay-per-mile policy and keeping an eye on auto loan rates and refinancing when they drop can also help. For example, the average rate on new auto loans dropped from 6.98% in December 2023 to 6.11% in September 2024, according to the Federal Reserve.
LendingTree Auto Finance offers a simple and efficient way to lower your car costs by letting you compare loan offers side-by-side from various lenders.
By refinancing your existing car loan through LendingTree, you can secure a lower interest rate, which can lead to significant savings over the life of your loan.
This means more money stays in your pocket while you pay off your vehicle faster. You can get auto loan offers from up to five lenders in minutes.
Perhaps the most effective way to save money is by comparing auto insurance rates for a better deal, especially as a recent LendingTree report found that insurance rates jumped 16.5% in 2024.
Thanks to OfficialCarInsurance.com, comparing multiple insurance companies is easier than ever.
Just enter your basic info, and you’ll instantly get a selection of offers to choose from, including trusted brands such as Progressive, Allstate, and GEICO.
In under 2 minutes, you could save hundreds of dollars a year on your auto insurance costs
Save more at the gas pump
According to the Bureau of Labor Statistics, American households spent about $204 on gas per month in 2023 — adding up to $2,449 annually.
Experts predict gas prices will rise by 25 to 75 cents per gallon if President Trump imposes 25% tariffs on imports from Canada. This move could put a strain on your pockets.
You can ease this burden by signing up for a gas credit card, which allows you to earn points or cash back every time you fill up your tank.
You can compare the best gas credit cards available for free through CompareCards.com.
CompareCards.com makes the process of choosing a credit card quicker and easier. You can view and compare the rewards structure and other features, like annual fees and sign-up bonuses, helping you make an informed decision.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
