Suze Orman's road rules for car-buying

Harry Lindback of Dearborn Heights, Mich., shops at Bill Brown Ford Dealership in Livonia, Mich.
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Harry Lindback of Dearborn Heights, Mich., shops at Bill Brown Ford Dealership in Livonia, Mich.

The car you're driving could be driving you into poverty, says Suze Orman. While lenders are relaxing terms and offering longer periods for borrowers to pay, Orman is sticking by her rules of the road.

"Lending standards have loosened up, so many of you who couldn't buy a car before … are going out there and buying cars that are so expensive it's not even funny," Orman said. She points out that this is made possible only because the loan is being drawn out "over six years, seven years, even eight years so [that] your payments are [small]."

(Read more: Beware of new tricks of the trade to get your money)

Suze Orman

The numbers tell the tale.

The average monthly payment was down to $460 in fourth-quarter 2012, versus $468 a year earlier, according to a report by Experian Automotive. It also found that the average auto loan length for a new car was at an all-time high of 65 months.

Orman cautions buyers to factor in the additional costs associated with owning a car, such as insurance and gas prices, which have skyrocketed.

"You can see yourself spending up to $1,000 [in overall car costs], and unless you make serious money, you cannot afford it," she said.

Suze's road rules

—Never finance a car for more than three years

—Never lease a car

—Keep your car for at least 10 to 15 years

Calculate your payment here

Orman says if the payments on a three-year loan are too large, then you can't afford the car.

See more of Suze Orman's advice on Saturdays on CNBC at 9 p.m. ET.

By CNBC's Sakina Spruell. Follow her on twitter @SakinaCNBC.

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  • Suze Orman

    Host of "The Suze Orman Show," Orman is a two-time Emmy Award-winning television host and an expert on personal finance.

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