Terrence from Atlanta has a budget problem, and he knows it.
The Georgia father recently called in to The Ramsey Show seeking advice on how to get rid of his car, a 2021 Kia Stinger GT2 that costs him $1,200 a month. He also pays $2,000 in child support every month — a financial burden that leaves him with little breathing room despite earning a six-figure salary.
“I make $10,000 a month,” Terrence told co-hosts Ken Coleman and Dr. John Delony. “I bring home $5,200 after taxes and child support.”
Terrence bought the Stinger for about $60,000 — rolling in negative equity from a previous vehicle. Two years later and he still owes $57,000, but the car is now only worth about $30,000.
“Oh boy, that’s a bath!” Coleman exclaimed. “That is a bat right there.”
Terrence’s situation isn’t rare. Unfortunately, many Americans find themselves “car poor” — trapped by high monthly payments, inflated prices and interest rates that stretch already-thin budgets.
According to CarEdge, the average price of a new car in the U.S. hovers around $48,699. Meanwhile, Experian reports the average monthly car payment for new vehicles sits at $742 as of Q4 2024.
Interest rates on auto loans are also elevated, with new car buyers paying an average of 7.1% in Q1 2025, according to USA Today. All of this has led to Americans accumulating $1.64 trillion in auto loan debt as of Q1 2025, according to Trade Economics.
Those numbers don’t even factor in insurance, gas or maintenance costs. And with 20% of new car buyers now paying over $1,000 a month, Terrence is among a growing cohort of American drivers underwater on their loans.
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Terrence’s question for the co-hosts was simple: what’s the fastest, least painful way out of this situation?
In order to give the co-hosts a complete picture of his finances, Terrence said he typically has between $1,300 and $1,400 remaining every month after paying his child support and other expenses.
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