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What is easily bandied about is the 0-1.5-2% car loans. Yeah those loans are available. To people who have good credit and pay their bills. Just because a 0-2% loan is offered doesn't mean you walk in and just get it. You must qualify for it.
I had a buddy who bought a truck about two years back . At 9% rate. The truck loan after 6 year loan was going to cost him 72,000. The truck was going to be worth maybe 18-20k tops after 6 years. The dealer then called him back because they couldn't qualify him. So they wanted to redo the loan at 14%. I told him to give them back the keys and walk away. So not everyone gets these 0-2% loans
DR advice is not for people who have their financial ducks in a row. It's for people in financial quicksand that are holding on to a 100 pound ball and chain attached
To some buying cash makes sense. To others it doesn't. I do whatever is financially more beneficial to our finances at the time if I need to purchase a vehicle. Last car we bought 3-4 months ago was bought used with cash. The one 5 years ago was cash. Before that was payments and before that was payments. (The payment cars was 3% at a time where 6 was normal) and my money was saved making 7% in investments. )
You're right, There are 2 different arguments going on here. One is the original post. The other is people making blanket statements on what you should and should not do, and people responding to them telling them there wrong in certain situations. I've never heard of the guy being talked about. The way you've bought your cars is an example of when it makes sense to do it either way.
I like Dave Ramsey. I LOVE the "debt free" concept. We always buy used cars anyway. (So far so good.) And we don't have credit card debt. So we sort of follow his principals but my other half isn't really familiar with him. We do need to be on a tighter budget and we'd have more in the bank.
I like what he says about "the cheapest car to drive is the one you're driving right now".
You're right, There are 2 different arguments going on here. One is the original post. The other is people making blanket statements on what you should and should not do, and people responding to them telling them there wrong in certain situations. I've never heard of the guy being talked about. The way you've bought your cars is an example of when it makes sense to do it either way.
Dave Ramsey is a guy who is a no debt drumbeat type. Which is ok. He simply has the purchasing power and doesn't need to borrow. Some like not owing anyone anything. I prefer it but it doesn't mean I won't use someone else's money if it's beneficial to me.
The biggest issue I have with Ramsey's advice about car buying is that it only seems to make sense if you currently have no car. If you have a car where you are paying $600/mo at some crazy 8% rate then chances are you are VERY upside down. It isnt like you can stop paying for a few months so you can buy a car with the $2500 you didnt spend on car payments. He never seems to be able to explain getting you FROM the car payment TO the beater.
I believe he tells people who are in an upside down situation (they owe $14k on the car but it's only worth $10k) to get a personal loan to cover the difference. However, this is only possible if someone has decent credit. Most people who cannot afford their car payments don't have good enought credit to get a personal or signature loan like that.
Here is my advice. And it's free, btw, lol. Last new car I bought was in January of 1985. A VW Cabriolet. And I still have it! In the meantime, instead of paying out ridiculous monies every month, I instead put it into my portfolio. My adviser has been with me for about 30 years. In the meantime since about 2005, I have bought five (5) homes. I still have the house I bought 39 years ago, which is my main property. Three are in Hawaii, one in Utah, and another in California. I paid cash for three of the six homes and have them all rented out. My positive cash flow for all five is around $40,000.00 a year.
Since I'm getting old, I have no wish to buy a new car. I have 10 cars, all but the VW I bought used and for cash. All have served me well, and yes, there has been a lot of maintenance, but a hella cheaper than paying $50,000.00 for a new car. Heck, I paid less than that for my first home, lol.
I would go with a used car. Shop and read and see which is the best value. My advice, a 1998 Toyota sdn. Now if you need a car for looks than for just transportation, then I don't know the answer for that. I bought a 1996 Cadillac Seville for $700.00. I put in about $2100.00 to make it run perfect. And it does look good, with all the luxury options you want. $2800.00 for a luxury car? Not bad, eh?
Also there is 0% financing available you end up not paying any interest
Often at the expense of a higher purchase price, however.
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