This unemployed Texas man pays $1,200/month for his $56,000 car, has $94,000 in total debt

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American households carry $1.66 trillion in auto loan balances collectively as of Q3 2025, according to the Federal Reserve Bank of New York (1). While there may be many different reasons that justify taking on massive auto debt, for Emmanuel from Texas, that justification appears to be a “super difficult mother-in-law.”

As he explained to Dave Ramsey on an episode of The Ramsey Show, Emmanuel purchased a car, despite being unemployed, because he didn’t want to rely on his mother-in-law’s vehicle (2). Making matters worse, Emmanuel bought a car he couldn’t afford and now owes $56,000 on the auto loan, with the monthly payments coming in at $1,200.

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“I'm sorry, there are no family dynamics that require a $56,000 car; That's absolute bullcr-p,” said Ramsey. “What kind of ridiculous family dynamic causes you to buy a $60,000 car you can’t afford?”

As Emmanuel struggled to justify his purchase, Ramsey and his co-host Jade Warshaw were left incredulous. But the unfortunate reality is that Emmanuel is not alone, and his story highlights how an irrational car obsession has driven many Americans into unsustainable debt.

The auto loan crisis

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 Kelley Blue Book, the average new car price was $50,080 in September 2025, the first time the price has crossed $50,000 (3). Meanwhile, the average auto loan interest rate is 6.90% for new cars in October 2025, per Edmunds (4).

Families are also increasingly burdened by the service costs associated with their vehicles. According to Experian, drivers pay $2,320 annually on average for car insurance as of October 2025 (5).

If you find yourself saddled with larger insurance bills, there might be ways to reduce your monthly car expenses.

You can shop around and compare auto insurance quotes from leading providers near you for free through OfficialCarInsurance.

Here’s how it works: Enter some basic information about yourself and the make and model of your car, and OfficialCarInsurance will sort through their database of thousands to display 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 entirely free and won’t impact your credit score.

Miscellaneous costs of owning a car are also on the rise. 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 Zer spends around 21%, according to Marketwatch Guides (6). Meanwhile, Edmunds 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 improved since then, you might 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 quicker.

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)

Immediate action

Although Ramsey and Warshaw acknowledge Emmanuel’s need for freedom and personal boundaries with his mother-in-law, they both agree that an expensive, unaffordable car is not the best solution. Taking on this debt, despite his financial situation, was also a reckless and “stupid decision,” according to Ramsey.

If you find yourself in a similar situation and are trying to escape the debt cycle, consolidating your outstanding loans into a single one could be a good place to start. This way, you can end up with only one loan at an ideally lower interest rate, helping you get out of debt quicker.

If managing a budget feels overwhelming to you, 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 even uncover forgotten subscriptions, helping you cut unnecessary costs and save potentially hundreds annually.

For a small fee, the app can also negotiate lower rates on your monthly bills, making it a valuable tool for keeping your finances on track.

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Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Federal Reserve Bank of New York (1); The Ramsey Show (2); Kelley Blue Book (3); Edmunds (4; Exeperian (5); MarketWatch Guides (6); Edmunds (7)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.