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Dave surely "repackages" common sense. Problem is, common sense does not exist in people minds, what is clearly seen from posts. What exists is deeply embedded idea to have what I want. Masses were well trained to think only that way and any common sense person irks them, as, somewhere deep inside, they know that he is, actually, right. So masses will find any excuse to dis him. Yes, he went bankrupt - learned his lesson - and raised back. Did you? As if you did not - well, maybe grant a guy some respect. He is NOT asking for your money and good advice is invaluable.
Don't like what Dave says - well, read what Ultrarunner said. So, OP, to your question.
You buy used, you pay cash. Period.
I listened to the financial advisors regarding leasing a car and this is how it's worked out for me. My mother died in late June around the same time as my car lease was ending so I decided to drive her car for awhile. Even though it is a 2002 Chrysler Concord, it only had 78K miles on it and all the luxury features for a car of that time. Since I started driving it in late August, I have spent over $2K in repairs and that doesn't even include the almost $3K my mother put in to it a few months before she died. I would have been better off taking that $2K and using it as down payment on a pre-owned vehicle. I hate having an unreliable vehicle.
And I own one of them. And what you describe is not on the list and is made by known unreliable manufacturer and is known garbage. And it does not change the point. Find RELIABLE used car, pay cash. Drive till wheels fall off. Save a ton.
I don't agree that driving an old pos is a good idea because it can be unsafe and too expensive to have it repaired by a professional mechanic. However, I do think that buying a moderately used car makes good sense. What do you think?
I don't think he recommended driving a POS, did he? Of course not. But for those looking for an excuse to justify an expense that maybe they can't afford w/o it affecting their retirement, I imagine that's how they'd refer to older vehicles.
There is something to the argument of both. It makes sense to buy a used vehicle, if its origin and ownership and maintenance can be traced & verified. However, I have read that if someone is going to keep the vehicle past a certain number of years, it's actually more cost efficient to buy new. If you keep a vehicle more than 10 years, depreciation of new vehicles doesn't matter. But you DO get longer warranty covered, and you are assured of the history of the vehicle, and you save on the taxes & fees of having to buy another vehicle sooner if you'd bought used. I don't know if that's always true, but I read that, and it makes sense.
If a person keeps a vehicle less than 10 yrs, there's more of an argument for buying used. Also, you can afford more vehicle by buying a later model used. And, cars are getting weirder & weirder, and with less of the important perks. I had a friend who bought a used Lexis SUV. It was gorgeous. Red. About 30k miles, which is nothing for a Lexis. And it had chrome handles & such. The current Lexis models cut out chrome & such, to hold down cost.
My issue w/current models is that they almost all come w/electronic gadgetry that is of little use to me, and most come w/sunroofs or moonroofs, which I hate and which eat into headroom.
I have a 2011 Honda Fit. Cute little car. But it has all these silver pedals around the steering wheel, and buttons on the steering wheel. I haven't used any of these things even once. This is SMALL CAR. The dash is just a few inches away from the steering wheel. All that added stuff does is add to the cost of the car.
Consumer debt is stupid, simple as that. If debt doesnt generate more income than it costs, its bad for you. Save your pennies and negotiate a cash price.
Each to your own. Look how Warren Buffet lives. This is a very wealthy man that doesnt have to impress anybody. And he does his own thing. No mansions and no Ferrari or chauffeured limos.
I am retired and drive max of 2000 miles a year, I am not going to spend beaucoup bucks to project an image. Not going into any debt, never have, never will. I want something simple as possible that gets me legally to the grocery store and doctors office for lowest cost per mile. I prefer manual transmission, just cause automatics make high mile inexpensive car very unreliable. So does engine with dozen cams and electronics up the wahzoo. Rebuilt automatic in such car costs two or three times what the car is worth. And rebuilds of high tech automatics dont have good track record. And I just prefer driving a manual transmission where I am in control, hate mechanisms trying to outguess me or trying to force their will on me.
I listened to the financial advisors regarding leasing a car and this is how it's worked out for me. My mother died in late June around the same time as my car lease was ending so I decided to drive her car for awhile. Even though it is a 2002 Chrysler Concord, it only had 78K miles on it and all the luxury features for a car of that time. Since I started driving it in late August, I have spent over $2K in repairs and that doesn't even include the almost $3K my mother put in to it a few months before she died. I would have been better off taking that $2K and using it as down payment on a pre-owned vehicle. I hate having an unreliable vehicle.
It is expected to have to buy tires, brake pads, battery, oil changes... I have had these expenses for my 1972 Plymouth Chrysler too...
Maybe blessed because the only repair in 20 years was a timing chain... under $40 in parts and a Saturday morning of my time to replace...
I do know people that should never own a car out of warranty... they simply spend and spend.
The truck needed an alignment so I took it in... just for the alignment as I changed the ball joints at 150k...
Again... this was just for an alignment... about an hour later I get a call saying due to the age of the vehicle I should replace the shocks and complete brake job including new rear drums and discs... the simple alignment would have turned into a $2500 repair... all I could think is what are they smoking?
The drums were fine and still within spec... the shoes and pads were at 30%... and the shocks were still under warranty from Monroe...
That was 5 years ago and I will do the brakes this Spring... I don't put a lot of miles on the truck as I only use it several times a month when I need it...
I could easily see someone with a credit card over the phone saying OK...
The mechanic started in and I asked to speak to the owner... the owner told him just do the alignment!!!
I’ve been listening to Dave Ramsey for quite a few years. Found him by accident, when I was already debt free. A couple of things; Dave has stated many times that he IS a car guy. Furthermore, if you can buy a really nice car, without putting yourself in debt, or otherwise having negative impact on your financial life, then he’d say, “go for it!”
The problem comes with folks who have no emergency fund, live paycheck to paycheck, don’t put money away in prudent investments for their retirement, who buy cars (or homes, or boats, or an RV, you get the idea) which they really can’t afford.
If you listen to the callers coming in to his program you see a consistent pattern; poor decisions, justified by wishful, magical thinking.
As some of the posters have mentioned, this isn’t rocket-science. It’s just math. If a person has the discretionary money to purchase a really nice (sexy, good looking, super-duper) car, well then, do it! But if you have trouble paying your bills, don’t follow a rational budget, and haven’t planned for the future, well, maybe buying that nice new car sitting in your driveway wasn’t such a hot idea.
And I own one of them. And what you describe is not on the list and is made by known unreliable manufacturer and is known garbage. And it does not change the point. Find RELIABLE used car, pay cash. Drive till wheels fall off. Save a ton.
Owning lots of different cars over the years some have been tagged Not Recommended... happy to say the reports were high exaggerated... at least for me.
What I did find is once Consumer Reports pans a vehicle the value drops a lot... making a car I may not have considered a strong financial move...
Just about anyone will agree cars last longer today...
Not to give the wrong idea... I bought one of those at the bottom of the list.
A good friend had bought a brand new Range Rover in 2006... back when it was owned by BMW... it was meticulously maintained and all at the dealer... tons of receipts... it also qualified for the Investment Tax Credit at the time because of the Gross Vehicle weight and business use... I think it was something like 50%?
He was looking to buy a new 2016 King Ranch truck and was offered $4000 trade in for the Rover he had paid 90,000 for 10 years prior... 10 years and less than 5% of retained value!
The car was showroom... inside and out... accident free.. not even curb rash on the rims.
I asked what are you going to do... he said why... are you interested and I said maybe?
I bought it for the Dealer trade in price nearly 4 years ago... I did spent $1000 on new tires since... the ones on it started showing sidewall checking and I don't mess with safety items.
The vehicle has been an absolute joy and from the reactions many think it is new...
Did I need it no... but buying if after it was fully depreciated with 99,000 miles on the clock made sense.
It has the best headlights, sound system, creature comforts of any vehicle I have driven... it does get 12 mpg but for me well worth the 5k I have in it... did I mention how many air bags it has???
My first new car purchase is a 2015 Hyundai Elantra SE. I wanted a roomy compact with good gas mileage, fog lights (fog can get very thick here), and comfortable seats. My goal is to keep this car for no less than 10 years. Depreciation wasn’t a factor in my decision. Exterior styling and interior layout played a part in my decision. Mazda3 was out due to tight interior and felt harsh over bumps (wife has spinal problems). VW Jetta price got too high when I got the package that included fog lights. Subaru Impreza was tight on interior space. Ford Focus felt too narrow in width and had little rear leg room. Chevrolet Cruze was very tight in rear space. Honda Civic dash layout and exterior styling just wasn’t my taste. Corolla was good until they went with that big mouth fish front grill. The Kia Forte had good interior layout while the Hyundai Elantra has better exterior styling but interior styling not as good as the Forte. If I were in the market today for a compact class car the choices would be even harder as they‘ve all stepped up their game. Still not a fan of the Civic’s boy racer styling.
Do agree that some people are trying to buy vehicles beyond their budget merely for status. They should be buying the best quality vehicle that meets their needs within their budget. If their finances allow then they can splurge all they want on the vehicles they want.
This is just an anecdote of mine. The best car that I feel I have owned is a 1992 Plymouth acclaim. I bought the thing in 2007 to go back and forth to trade school. The car had about 57k miles on it when I bought it and I sold it with about 125k miles with no major problems, just basic maintenance. It had the Mitsubishi 3.0 v6 engine which is pretty reliable with the simple 3 speed automatic transmission. I bought the car for 650 dollars, best money I have ever spent. I sold it to a friend in 2012.
My dad bought a '94 dodge spirit from our neighbors back in 2004 for 450 dollars with 120k miles, that car ran like a top as well. Although, I'm fairly mechanically inclined, so I typically know what to look for when buying cars and haven't shied away from buying used cars. I just see cars as constantly depreciating assets that get me from point a to point b, although I do appreciate well-engineered cars.
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