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Dave Ramsey is a millionaire. Therefore, he doesn't know much about what it takes to live a lifestyle of someone with lesser means. His basic show premise is "all debt is bad" which, of course, is patently absurd. Most successful people have some debt to their names. That's because they realize that some financial liquidity is also important. If you pay cash for everything as a middle class individual, your ability to maintain liquid assets will likely be lacking. And, that can be a very bad thing. Then, there's the question: What's my time worth?
Example: You make $30k per year after taxes. After all living expenses (lodging, food, clothing, insurance, utilities, fuel, etc.) are accounted for, you have 10k remaining. Are you really better of taking $6k of that and buying a used car which might last you 2 years and will definitely need repairs? Or, are you better off cost averaging and maintaining a car payment of $300 per month on a vehicle which will largely be worry free for 5-6 years? In the end, the financial cost won't be a whole lot different. And, if you have a job 20 miles away that you need to get to every day, the latter scenario wins every time. Time is the most precious commodity of all. Wasting it stranded on the side of the road or rolling around under an old car every 2 months seems rather foolish when the financial cost of not doing so is just about the same.
I had a new Jeep, but... after listening to Dave Ramsey I thought it would be a good idea to get rid of my new car and drive a "beater" to cut down on debt. So I did.. I got my dealer to buy my Jeep back for what I owed. 11K dollars. So with that off my plate I took out a 4K loan with my credit union to buy me a cash car.
So I found a 2003 Explorer with 168K miles on it for $2100. I took a risk... only to be lied too by the people who sold it to me. here in Texas you have to get an inspection when registering it... So it passed inspection but the mechanic told me it needed a new timing chain. which it does. because there is a clicking noise underneath the hood.
I didn't hear it when I bought it... but when I drove down the road the clicking noise got worse. so now... I have a guy doing it for me for $1250. Im $3,350 into this nightmare.
I didn't wanna risk buying another cash car with the rest of the money out of the 4K. so I just decided to fix it. anyone have a similar story? this just sucks.
So, um...what? you thought you'd just pocket the other $1900 from the credit union? You took out a $4k loan, and now still have less than that into it.
The first mistake you probably made, was in NOT finding a $4k newer vehicle.
The second mistake was in NOT Expecting to put some $$ into a 12 year old vehicle!!!
The third mistake was ...and this is key... you DIDN"T take it to a mechanic FIRST before buying. Anyone who will sell you a vehicle without allowing you take it to your mechanic--well RUN AWAY!
The final mistake? listening to someone who told you to dump a new{er?} jeep to get a beater. Beater almost always needs $$ to keep it running!
Be glad it CAN be fixed for the $1250 AND that you HAVE the "cash money" on hand {a loan from the credit union is NOT a "cash car"!! It is STILL A LOAN TO be paid back!}
You'll need to worry when it cost more to repair than you have in "cash" on hand. Or more than the vehicle is worth to you to keep dumping money into...
Hate to tell you, but she didn't make money on that car. A dollar today isn't worth nearly what it was worth in 1964. Here's a basic calculator you can use. I'm sure there's others, they're probably all slightly different, but close enough it makes no difference. According to that one, she would have had to sell it for 7.7 times what she bought it for just to break even in real dollar terms due to inflation. So while she did better than most, she still lost over 1/2 of her purchasing power.
Never said she made money... only that she sold it for more than she paid... 3 x more.
Plus there were the intangibles as being the center of attention wherever she drove her car later in life... I doubt there is a person around here that didn't know the story of original owner Mustang driven by the little old lady...
The guys at the filling station were always asking her to sell... priceless.
I had a new Jeep, but... after listening to Dave Ramsey I thought it would be a good idea to get rid of my new car and drive a "beater" to cut down on debt. So I did.. I got my dealer to buy my Jeep back for what I owed. 11K dollars. So with that off my plate I took out a 4K loan with my credit union to buy me a cash car.
So I found a 2003 Explorer with 168K miles on it for $2100. I took a risk... only to be lied too by the people who sold it to me. here in Texas you have to get an inspection when registering it... So it passed inspection but the mechanic told me it needed a new timing chain. which it does. because there is a clicking noise underneath the hood.
I didn't hear it when I bought it... but when I drove down the road the clicking noise got worse. so now... I have a guy doing it for me for $1250. Im $3,350 into this nightmare.
I didn't wanna risk buying another cash car with the rest of the money out of the 4K. so I just decided to fix it. anyone have a similar story? this just sucks.
Dave Ramsey is very irresponsible promoting this idea
Reality is that it works ONLY works for people that can do their own car maintenance.
It does help a lot to know your way around cars... at least what things should cost.
Just about all of my co-workers buy new cars for their kids or help their kids buy them... huge difference from I was 16 and just about all of my friends were wrenching on their cars...
I do understand having a new Honda or Toyota gives the parents peace of mind and lets them sleep nights.
Even in my own family the kids are coming of age and my siblings are against anything without a warranty... just shows how far we have come.
The cost of simple repairs can really ad up fast... I just did a brake job using factory parts... Dealer was $1200 and it took me 2 hours and less than $300 for new rotors and pads... OEM
As mentioned in a previous post... I have only bought one new car and have done very well with second hand cars...
Last edited by Ultrarunner; 09-11-2015 at 09:36 PM..
I had a new Jeep, but... after listening to Dave Ramsey I thought it would be a good idea to get rid of my new car and drive a "beater" to cut down on debt. So I did.. I got my dealer to buy my Jeep back for what I owed. 11K dollars. So with that off my plate I took out a 4K loan with my credit union to buy me a cash car.
So I found a 2003 Explorer with 168K miles on it for $2100. I took a risk... only to be lied too by the people who sold it to me. here in Texas you have to get an inspection when registering it... So it passed inspection but the mechanic told me it needed a new timing chain. which it does. because there is a clicking noise underneath the hood.
I didn't hear it when I bought it... but when I drove down the road the clicking noise got worse. so now... I have a guy doing it for me for $1250. Im $3,350 into this nightmare.
I didn't wanna risk buying another cash car with the rest of the money out of the 4K. so I just decided to fix it. anyone have a similar story? this just sucks.
$2100? You didn't research or look long, did you? Did you do CL? Wait until you need to replace shocks, water pump, tires, U joints, brakes, bearings, service the AC and do a complete tune-up. Yeah, used cars need attention they may not have gotten from a previous owner[s]. If you know how to do it yourself it is way cheaper. You can learn watching YT videos.
The world is so negative. "You did this wrong" " You made this mistake" blah blah blah you negative Debbie downers... but thank you to those who had positive things to say.
I know I have to pay the loan back! and yes I call it a cash car because I have the title... Ok?
I researched and seen explorers with over 200K on them! this was a 1 owner car and i saw proof of that! yes it's my fault for not having a mechanic with me!
I cant complain too much.. Timing chains and belts ect. break in due time
im going to drive this 1 or 2 years! hopefully the cost of repairs wont be pricey! all I can do is pray and take care of the ford.
but you all are just hateful and terrible with the comments! im done reading negative feedback
Make sure to save around $2000 for a new transmission, those things go through transmissions, and wheel bearings also.
The 2003 explorers are POS's, I would never touch one with that many miles on it. When getting a beater, I think that means a historically reliable at a high mileage car, not just any car that runs at the right price. The 2003 and 2004 explorers are money pits.
Cman59. Don't take it too hard. None of these guys are being negative. They are giving you reality check..
I agree to most other posters. They all made good valid points.
You got the right idea. But you did it all wrong...it's a lesson learn. You chose a high mileage unreliable truck... Next time. And there will be a next time. Ask first and research before you buy.
I myself avoid dealers as much as possible. I like buying from individual owners...
But if you don't know what you're doing. It doesn't matter where you buy.
I just came home from looking at a car. I am coming back, In the morning, I might pick it up..
Cash deal. But i don't borrow anyone's money...
Take it as lesson learned. And learning cost money.
As a VW mechanic/engine builder/Parts house owner of 28 have bought and sold many cars.
Always would look at any car at the peoples home, ASKED different questions, checked title as to how long they owned the car and it should be in their name and address.....if anything different I would politely PASS.
Once had a customer come in and tell me about his purchase that had NEVER been HIT. I showed him where the R/R had previous damage as they are Notorious for that...same with the L/R.
Never buy a car meeting someone at a gas station of Mkt parking lot...they may be a Flipper.
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$2100? You didn't research or look long, did you? Did you do CL? Wait until you need to replace shocks, water pump, tires, U joints, brakes, bearings, service the AC and do a complete tune-up. Yeah, used cars need attention they may not have gotten from a previous owner[s]. If you know how to do it yourself it is way cheaper. You can learn watching YT videos. 
