Are you saving enough for a secure retirement? Most Americans aren't, often because putting aside extra cash for the future seems unaffordable. The problem is that you cannot live on Social Security alone, and since few employees have guaranteed pensions in today's economy, that means it falls on you to save enough cash for your golden years. 

At the car lot.

Image Source: Getty Images.

Of course, if you simply can't spare the money to save now, what can you do? Well, you can start by looking in your garage. If you have a late-model vehicle you're paying a car loan or a lease on, it could be one of the things that are ruining your chances at a secure retirement.

How your car could total your retirement savings

The majority of vehicles Americans are buying are financed. According to data from Experian, in the first quarter of 2016:

  • 86.3% of all new vehicle purchases were financed for a term of 68 months, with an average loan amount of $30,032 and an average monthly payment of $503.
  • 55.3% percent of all used vehicles were financed for a term of 66 months, with an average used loan amount of $20,723 and an average monthly payment of $376.
  • 31.1% of all new vehicles were leased, with an average term of 36 months and an average monthly payment of $406.  

The average length of ownership of a new vehicle was 79.3 months at the end of 2015, while the average length of ownership of a used vehicle was 66 months, according to Insurance Institute for Highway Safety. 

If you do what the average American does and take out a 68-month car loan for a new car that you keep for 79 months, you'd never even go a full year without a car loan (you'd only get an 11-month break before buying a new car). If you bought your first car at age 20 and worked until age 65, you'd be making auto loan payments for all but six years of your entire 45-year working life. 

Used-car owners who take out a 66-month loan for a car they keep for 66 months would never get a break from a car loan at all, nor would a leaser ever have a break from lease payments. In any scenario, this means the average American is almost constantly paying for a car. But what if you could instead divert some of this cash to retirement savings instead?

How changing your car-buying habits could make you rich as a senior

Instead of buying that $30,000 new car or $20,000 used car, what if you instead bought a reliable used car that was under $10,000 and had a reputation for longevity?

In 2016, the average price of a 2007 Honda Accord was between $6,112 to $9,513. This vehicle was found to be one of the longest-lasting cars available; thousands of them are on the road with well over 200,000 miles. Most drivers put close to 13,500 miles per year on their cars, so if the car was just under nine years old when you bought it and you drove it until you reached 200,000 miles, you'd have close to six years before you needed a new car.

For the same $503 monthly payment you were paying for a new car, you could have a $7,800 loan for a mid-priced Accord paid off in around 17 months, assuming a 7.81% loan rate for a used vehicle (the average loan rate for a used car from a franchise). You wouldn't need another new car for around 4-1/2 years, so during this time, you could save $250 per month that would go toward repairs and the purchase of your next car -- and you could direct the other $250 that would have been going to your car payment toward retirement savings. By the time another 4-1/2 years has passed and it's about time for a new vehicle, you'll have plenty of cash for another reliable used car. Pay cash for that car, keep setting aside $250 for your next vehicle, and keep paying your $250 per month into retirement savings.

If you rinse and repeat the process for your entire career, buying reliable used cars for cash and diverting an extra $250 per month into a tax-deductible IRA, how much would you have saved by the time you retire? If you started at age 25, the $250 cash per month you diverted from your car costs into your IRA would grow to $621,000 by age 65, assuming your investments earned an average of 7% per year. If you started at age 35, you'd still have a respectable $294,000. And even if you start late at 45, you'd manage to build an IRA worth $128,000. And don't forget: This is just from redirecting the cash you've spent on your car toward your retirement savings.

The math is similar for a leased or used vehicle too. You could save thousands by avoiding financing charges and skipping the fancy vehicle for a reliable used model that you drive as long as you can. You just have to decide whether you'd rather have a shiny new car today or a more financially secure retirement years down the road.