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A friend of mine who took Financial Peace University with me just had their car totaled 2 weeks ago and they still had the whole "pay for a car with cash" in their head and they just got sticker shock when they saw the $7000 they got for their 5 year old car can only get them a 2005-20010 model car with close to 100K miles.
They wouldnt believe me on how much cars cost now days and warned that the advise of buying a car cash only applies to wealthy people, because most middle class people dont have $15-30K cash on hand just sitting their for a car purchase.
While I dont agree with people spending $5-800 a month on a car, even cheaper cars will still require financing and its better to have a low car payment with $20K cash in the bank vs a paid off car that you just bought for $20-30K and if an emergency happens, you have nothing but a paid off new car to your name.
This is what I do. I lease a brand new car every 3yrs. Always a sign and drive no money down deal with payments in the mid $200's. My last car was a 2014 Civic EX. $0 down and $229/month. To top it off, I get to write my payments off on my 1099 as the vehicle is used primarily for business purposes. I'm always covered under warranty and always have the latest tech and safety features.
Now lets say I lease a car for the next 9yrs at $250/month. That comes out to only $27,000 over the span of 9yrs that by the way is a tax write off for me. The average buyer usually trades/sells the car in once its paid off or shortly after. Along the way he/she is paying for maintenance and upkeep. My leases come with free oil changes for the duration of the lease. I pay solely to keep it clean and to put gas. I haven't had to come out of pocket for a car repair in over 6yrs.
Some people have this obsession with car ownership pride. I dont get it. Its a depreciating appliance. To me a car is a tool to get you to/from. I need it to work just like any other necessary appliance in my life. I can care less about "owning" my vehicle. Especially some 10yr old beater that may or may not break down while I'm on the road.
This is what I do. I lease a brand new car every 3yrs. Always a sign and drive no money down deal with payments in the mid $200's. My last car was a 2014 Civic EX. $0 down and $229/month. To top it off, I get to write my payments off on my 1099 as the vehicle is used primarily for business purposes. I'm always covered under warranty and always have the latest tech and safety features.
Now lets say I lease a car for the next 9yrs at $250/month. That comes out to only $27,000 over the span of 9yrs that by the way is a tax write off for me. The average buyer usually trades/sells the car in once its paid off or shortly after. Along the way he/she is paying for maintenance and upkeep. My leases come with free oil changes for the duration of the lease. I pay solely to keep it clean and to put gas. I haven't had to come out of pocket for a car repair in over 6yrs.
Some people have this obsession with car ownership pride. I dont get it. Its a depreciating appliance. To me a car is a tool to get you to/from. I need it to work just like any other necessary appliance in my life. I can care less about "owning" my vehicle. Especially some 10yr old beater that may or may not break down while I'm on the road.
This works for you because you can write off the lease payments. I can run older rigs for about 10-15 cents per mile, but I do all the maintenance. How much they cost me per month depends on how much I run them in a given month. Over the last 10 years, including buying several of the cars, I don't know exactly what I have spent, but I seriously doubt it's anywhere near $27K.
This works for you because you can write off the lease payments. I can run older rigs for about 10-15 cents per mile, but I do all the maintenance. How much they cost me per month depends on how much I run them in a given month. Over the last 10 years, including buying several of the cars, I don't know exactly what I have spent, but I seriously doubt it's anywhere near $27K.
To be honest, even if my leases weren't a tax write-off I'd still lease just for the peace of mind. Like I stated, I dont go high end when I lease. Low - mid $200's for my monthly payments. I laugh at those who criticize people with car payments yet go out and blow just about or even more per month on cigarettes, beer, drugs, etc... LOL.
I have a friend who smokes about $300 worth of marijuana a month yet tells me I'm crazy for leasing because its a waste of money!
You may not pay more with a debit card, but in many instances they will hold a much larger deposit on that card to make sure they have enough funds to cover any incidentals.
They hold $100 for the length of the rental. No big deal. The car rental is usually more than that.
A friend of mine who took Financial Peace University with me just had their car totaled 2 weeks ago and they still had the whole "pay for a car with cash" in their head and they just got sticker shock when they saw the $7000 they got for their 5 year old car can only get them a 2005-20010 model car with close to 100K miles.
They wouldnt believe me on how much cars cost now days and warned that the advise of buying a car cash only applies to wealthy people, because most middle class people dont have $15-30K cash on hand just sitting their for a car purchase.
While I dont agree with people spending $5-800 a month on a car, even cheaper cars will still require financing and its better to have a low car payment with $20K cash in the bank vs a paid off car that you just bought for $20-30K and if an emergency happens, you have nothing but a paid off new car to your name.
When you follow the plan, you are not depleting your emergency savings. Instead, you continue to put money away for the next car as you go along. It is just a matter of paying for a car upfront. You are still paying as much or more for the car with payments, it is just a matter of timing. When you pay cash upfront, you are taking less risk. Imagine that same car that was totaled, yet the owner paid cash. Often, the insurance amount does not even cover what is owed on the car and then you not only have to come up with the gap, but then you need money for the next car.
They hold $100 for the length of the rental. No big deal. The car rental is usually more than that.
Depends on where u go. I've had them place a hold on my credit card anywhere from $250-$1000 for car rentals. Same for hotels. Just recently I stayed at a hotel in Miami where they put a hold on my credit card for $250/night and I was there for 4 nights. That's $1000 of my cash that would have been frozen had I not had a credit card with that available credit line.
Depends on where u go. I've had them place a hold on my credit card anywhere from $250-$1000 for car rentals. Same for hotels. Just recently I stayed at a hotel in Miami where they put a hold on my credit card for $250/night and I was there for 4 nights. That's $1000 of my cash that would have been frozen had I not had a credit card with that available credit line.
I would just go to a competitor. Plenty to choose from.
You can find banks that will underwrite a mortgage without having to involve your credit report. May not be the mega banks, but you could possibly see the Federal Housing Administration, or search out credit unions. That's what I did for my first house. I would do some research before dismissing Ramsey as a fool. That's a little harsh.
Since 2009? Banking regulations have completely changed. The FHA most certainly will not issue a loan without a credit check. They have a hard cutoff. No bank or mortgage company could sell the mortgage to Fannie Mae or Freddie Mac. You'd have to go the private equity route and you'd need a pretty major down payment. The interest rate would be much higher than you'd pay for a conventional mortgage.
You can get a no credit check car loan, too. Double-digit interest rates. Unlike a house, it's trivial to repossess a car. A foreclosure on a house can take years.
Never have heard Dave say you must use his people. I mean, sure, he's running a business. He's going to want you to use his company. Why wouldn't he? Would you suggest to prospective clients to use someone else as their electrician? Of course not. You want their business unless you absolutely are too booked to help them. Otherwise, you're going to want to work and earn a living.
He doesn't come out and say it but he heavily directs listeners to his approved people. You can't deny that. I don't much care one way. If I had a radio show and i was taking calls I would say call your local electrician and have him repair it. I wouldn't say call my buddy Joe so I can get a kickback.
FPU provides a lot of benefits. It teaches people to budget. It shows them how to deal with the credit card companies. It shows the basics with investing. It provides a good game plan to get people back on their feet and thinking about their financial futures again. But the most important thing is it helps to empower those individuals who have been slaves to their debt. It provides accountability and hope. Being in debt can be as much a mental and emotional thing as anything else. I mean, everybody knows to not be an alcoholic is stop drinking. But it isn't that easy for some. They need help and support with programs like AA and other substance abuse counseling. The biggest thing is that FPU attacks the debt issue through a biblical view. If you're not religious, you're not going to understand that part. But aside from that, it absolutely provides a good game plan that people can use as a guide to become better with managing their money. Again, yes, there are people like you who don't need help. Then again, there are many people who need people like me to configure their network, servers, and end user client stations. I see all of that as pretty easy concepts, but I know others don't.
Getting out of debt is a relatively simple concept. I don't have a problem with DR advice on getting out of debt. I managed to do it with my wife on our own. Maybe they just lack the drive. I dont know.
Again, alcoholics: Stop drinking. Don't need someone in AA to tell them that, but yet there's a need for those programs. And I would have to disagree that we don't need a guy on the radio telling us that. We also have guys like Clark Howard who approach debt in a different way, but still provides information to help people get out of debt. There is most definitely a need. Otherwise these guys wouldn't exist.
Clark Howare is the advice I like better. Not sure why. Probably the religious angle is what turns me off from DR..
Good for you.
Thanks
Dave Ramsey has specifically said taking out a mortgage is OK with him, of course with caveats. Such as not taking out a 30 year loan, putting no less than 20% down on the house, budgeting the payment so that it can be easily paid with one income, and paying the house off within 15 years. He's not the only financial guru who has said as much. He does say he would rather people buy their homes with cash, but he is not against taking out a mortgage. What he may be against are those who buy too much of a house. Which becomes more of a status symbol. We all know housing in Cali is expensive, but opportunity to make over six figures a year is a lot greater than a lot of states around the country.
Buying a house cash in Tennessee is a far cry from buying a house cash in So Cal. I take 30 year mortgages, I put down 20% and I just make additional payments. This way if I want to I can revert to a lower monthly payment. Thats just the way I do it. May be against what is common device but in the end it's the same. Btw paid my last house in 10 years instead of 15.
The only tool I can see is protection online. Which nowadays, even the debit cards are catching up with fraud protections. As pointed out earlier, people worship the credit score, because it merely tells them how much debt they qualify for. If you're paying cars with cash and your house is paid for, what do you need a credit rating for?
Truthfully I don't need a credit rating. I just use a CC and pay it at the end of the month. Makes no difference to me. I just pay it at the end of the month. Works for me. Credit us fine if I'm buying something and I dint want to use all my money to get it. But if I do buy something on credit I petty much pound it not oblivion quickly. About the only thing I really use credit for is to buy a house. Other than that I really don't use credit
I would just go to a competitor. Plenty to choose from.
I don't know where you're from or if you even get out often, but cc/debit card holds are pretty standard across the board when renting a car or a hotel room.
I've rented plenty of cars in my life when traveling and I have never had just a $100 hold placed on my card.
Even if credit cards are used just for situations like this, they're worth having. Why would anyone want thier cash tied up for days at a time when a line of credit will do it for you while having total access to your cash?
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