He says buy in cash but if I have 25000 in cash and put that all into buying a car I'm losing the opportunity where I could invest 20000 and put 5000 into the car. My car loan would be 2-3%
@@fitybux4664 He said God used to Dave to help him with money management. Dave pre dates UA-cam and algorithms. He didn’t say Dave’s videos “miraculously “ showed up in his suggestions.
My husband drives a 2002 Toyota Camry and I drive a 2011 Hyundai Sonata. Both paid for. We are going to drive those suckers into the ground before we ever think about getting another car!!
"before we ever think about getting another car" -- we do the same at my house (2010 Wrangler and 2008 Mercury Milan), but we also periodically shop around even while our current cars are doing OK. That way when one of the cars craps out and isn't worth fixing, we already have pretty reasonable ideas about our replacements. Otherwise in the rush to get the next car so that we can get to work and such, we might end up making a less informed decision on the next car.
Save up for a decent used car, I hit the jackpot found myself a 2007 Camry with 35k miles on it and bought it for $7k in June, what a blessing. I’m gonna drive it into the dirt and maintain it as much as possible. Took me few weeks of looking for it but it was worth the wait
Are you sure those are the real miles? Always then you see a car that’s almost 18 years with nothing in miles, please always check all the document and history to see real proof. If not you can get scam.
I disagree, I dont have a car note.... far from a millionaire though. Just gotta save the cash!!! Discipline.... it's hard at first but its worth it in the long run
No they became millionaires because of how tight they were with money for years, that includes never buying new cars and having a car payment ! You should listen to the 'millionaire theme hour' that Dave does. It's mind blowing
I am not mediocre nor broke and I have a car loan. I have no debt besides my house. 401k in place, investments,college for my kids . I even have a Roth and a CD. Work full time and have a college degree.. Make good money . I dont think you can take all those millions to your grave my friends. 75 years old with 10 million you can't spend. Life not enjoyable. My school friend just passed away age 39. Life is short.
@@youtubecommenter1000 lol. You're always going to be in some kind of debt in life at some point. Life ain't no video game. No restart. Once it's over that's it. You better live your life.
I have a 2004 honda, and it's almost at 200,000 miles. Transmission was giving out. All we did was paid 1700 to rebuild it and some new parts and she is driving agian!
yes!!!! i got a job right out of college and this was my first and hardest lesson learned 10 years later but never again. i will teach this to my kids. never ever ever buy new. always used and cash or there is no deal.
I know this is 4 years old. I tried buying 100k-150k mile cars for $5k and $10k in cash. Seemed great at first because we didn't have a payment, but even with great care they all broke down every 2 years and the fix was more than the car. Stress isn't worth it. The cars would have just ate up our emergency fund every year.
Did the “responsible” thing bought a car 4K in cash, every 6-8 weeks it would break down and I ended up using all my AAA tows. Constantly calling into work cuz the shit would clunk on my way in, financed a Camry for 15k going on two years not a single problem.
This is what I keep trying to tell my husband. One of our cars is on its last leg. I want to use it only for short trips and try to make it last until we can get 4-5K saved up to buy a decent used car, which would only take us a few months. He wants to finance. We have good credit and would get a low interest rate, but I don't want to pay any interest at all. I would rather save the 3 or 4 hundred a month that a car payment would take up and invest it in something that won't depreciate in value.
Try to look for a Crown Victoria, Grand Marquis, Chevy/Geo Prizm, Toyota Corolla, Nissan Sentra, Chevy Cavalier, Pontiac Sunfire, Suzuki Swift, or Chevy/Geo Metro. The first two, look for 2002 and on; the other, look for 1996 and on (edit: the Sentra is 1996-1999 only). Many of them are under $3,000. Have a mechanic you trust look it over (including for VIN swapping and flood damage) before buying, and transfer the cashier's check and title in front of a DMV employee. As for your husband, have him look at the inverted yield curve, and increase in companies buying back stocks with cheap debt. I think we're about to have a lot of layoffs to pay the increased debt service, and it's going to get a lot of people with car loans into a lot of trouble. I think we're going back to the days of 300-400 applications for every opening. Save the $300-400/month in the bank as a bigger emergency fund than Dave suggests.
@@EMichaelBall I agree with your suggestions for used car models. Toyotas are excellent in general, my mom had a Nissan Sentra for 18 years and it was still running strong when she sold it. I had a 94 Chevy Cavalier that I drove for years as a commuter car because at the time I also had a Grand Cherokee that I would drive when the weather was bad or when I had to haul a lot of people or cargo. The rest of the time I drove the Cavalier for the fuel economy. I gave it to my sister when I moved out of state. I couldn't take it with me, and she needed a car, so win/win. She finally got rid of it a couple of years ago because it just wasn't worth putting money into fixing it anymore, but it had 400,000 miles on the original engine. Not bad for a car that I paid $1200 for back in 2002. My uncle, who I consider to be a very smart guy, swears by Geos. He gets a new truck every 2 years for work, but he loves the Geos for long commutes and also for when fuel prices skyrocket. He says that they're cheap, reliable, get great fuel economy, and are surprisingly comfortable (he's 6'5").
I think you bring up a good point Kaylee but I also think that when you have the cash to pay for the car in full it might be smarter to take a loan and invest the money instead. Because if you are able to bring in more return than the interest on the loan you can benefit that way. I recently did a video talking about this
used Toyotas with decent miles are very difficult to find where I live. I did get lucky almost 10 years ago with one, but my wife friggin' wrecked it three years ago. Problem around here is everyone either drives them until the wheels fall off or they all own 4x4 pickups
@@drunclecookie216 Same around me... reliable used cars sell for so close to the new price, that I don't understand the justification for going used in some cases. Want a 2-3 year old Lincoln, Cadillac, BMW, Merc, Audi, etc with
@@markg999 Not entirely and not the point. The point was that if you are looking for a used but still relatively new car, you will save very little on an Accord versus buying new. But if you are in the market for a luxury car, you can save quite a bit versus buying new.
I just signed a bad loan deal on a car I’m financing I’m screwed 🤦♂️🤦♂️they want thousands in interest I got a 23.99% interest bc I didn’t see the percentage I went in blind now I’m paying for it 🤦♂️🤦♂️🤦♂️🤦♂️
@@turtleanton6539 fortunately,i was able to get out of the contract with no damage whatsoever to my credit. I learned a valuable lesson and I now know what knowledge to come into a car dealership with.
Anette yeah, they rip you off. I just got out of my car loan. You end up paying double for the car after you pay it off due to insurance and gas and maintenance!
You don't have peace worrying about if this car is going to die on me on the way to work on the hwy. Have peace of mind with that car note, you sound disciplined enough to handle it. Everything doesn't work for everybody. Do what's best for you and your situation.
Exactly! I always see people talk about buying a $200 dollar car and riding it to death, well that $200 might actually be the death of you. Be smart buy used and pay it off asap.
Plus who says get a $500 payment. Bought my truck new in 2013 for $21,800. My payment was $275 a month. It has been paid off for 2 years now. Is there no middle ground?
@@DustinDeweerd Dave Ramsey and his sheep don't do middle ground. There is exactly one way to do everything and that applies to every person on Earth in every situation.
Some people just lack comprehension I see.. He said that the AVERAGE CAR PAYMENT is $500 (New). Plus not everyone has decent/ good credit being that isn't even AVERAGE in itself.
If your in a situation where you need a car to get around due to a job or being involved in an accident & your establishing credit, Have little to no debt, and are a responsible person A car payment will help you in the long run credit wise if you're applying for a mortgage etc. Doesn't mean you have to get the most expensive car. You can get by with a 5k-8k loan for 24-48 months depending on your income being disciplined.
I know right? Save up money for however many years just to get a used car that we need now. For as long as the monthly payments are reasonable there’s no shame in paying over time. Dave has this thing that EVERYONE wants to be a millionaire and strives to live that kind of lifestyle. He seems to be out of touch with what people actually desire.
Hey Dave, I put a 2K deposit on a brand new pickup truck with a 37K price tag, and went through all the paperwork. My finances are great, but after watching your show, I decided to cancel the deal. I never had a car payment before and realized if I can't pay it cash, then I probably shouldn't buy it. I'm 28 and earn over 6 figures. My coworker is selling me a 10yr old honda civic fully loaded for $1500. I'll continue saving my money, and rent a truck when I absolutely need it. One day, I'll buy the toys I want with cash. Now I gotta go to the dealer and fight for my deposit or at least part of it. If I lose part of or all of the deposit, it's a much cheaper lesson learned. Thanks for the great advice.
As a CFP I can tell you this video makes little sense to me. 1 - if having a car is needed, then it's not an option to just wait. 2 - why does he assume that the person is going to spend $507 for 7 years. 3 - Why does he assume he is ALWAYS going to have a car payment? If he buys and maintains a decent car, he can drive the car for 10-15 years. 4 - where is he getting that 5.6 million ? What rate of return is he assuming? This feels like advice from someone who gets to preach but doesn't get to work with real people anymore. I just sat down with a 25 year old who is trying to decide on a $250 a month car payment for 5 years vs listening to this advice, but the cost of getting to work would be almost as much, if not more, than the $250 and he would have nothing to show for it other than a favorite seat on the City train (and no car for weekends or anything else) After 5 years he would have a reliable car and no payment for at least 5 years or more. And, yes, Millionaires haven't had car loans. Great. They can write a check. But how about advice for people living in the real world? I have a successful practice and my share of millionaire clients, but I also do a lot of free work in the community and have clients that aren't millionaires. General advice is great people. He is right - debt is bad when it's abused. Don't buy a new car with a new loan every 4 years like some people and don't lease. But do remember to think for yourselves and question when you hear general advice like this.
You are not factoring in full insurance, gas, maintenance, repairs. At the end of the loan term you end up spending a small fortune for something that is worth much less than what you paid for it.
He said investing $507 from age 30 to 70 will make you approximately 5.6 Million, so save 507 for 40 years and hope to maintain a 12.65% growth rate and be alive too. This advice is useless if you're responsible with money and don't keep buying new cars. I need the car now and some things can only be useful and enjoyable if acquired at the right age.
@@sleepytoe8 I'll be honest woth everyone. Idc about $500 a month turning into 5.6 million if I don't get to drive a car that I like and enjoy driving. I don't understand the mentality of not living and enjoying your money until you retire. Being responsible with debt and saving for retirement compared to not ever driving the car you want is stupid. You don't have to have millions saved to drive a nice car.
My car payment is $98 but I throw all my extra savings at it each payment. The car only cost $3300 and the reason for borrowing such a small amount is that I’m in college and so rather than blow through all my savings to buy a car, I can keep more liquidity with 20% down. Plus having a reliable car has enabled me to take more shifts at work so now with that as well as regular income, ill have the car paid off in like 4 months. My point is just be smart and live within your means
IHEartLReoy I just started my freshman year, I currently don’t work but I do get refunds, and I get 2,500 but my mom asks for 1k. What type of car did you get? How many miles did it have? What year is it from? How long have you had it ? and does it ever just stop functioning out of no where?
People also tend to buy more expensive cars that they don’t need with a car payment. I bought a top of the line crossover thinking I would use all the features. Barely used any of them! Nothing wrong with STANDARD trim Honda, Ford, or Toyota. Your wallet will thank you in the long run.
I don't think he is completely against car payments, but if you are poor why not finance a $3000 car instead of going to the dealer and financing a $20,000 one?
decent used vehicles are very difficult to find where I live (very very rural area) and owning a car here is a necessity if you want to go to work or buy groceries as there is zero public transportation and everything is 10+ miles away from each other. I have gotten lucky in the past with used cars, but most of the time I can never find a good deal with decent miles. Everyone around here will keep those used cars with decent miles and drive them until the wheels fall off or they all own 4x4 pickups which do me no good.
That is actually common everywhere these days. Used car market is not like it was a decade ago. Few "bargains" - the ones available tend to be former rental cars (and don't be fooled thinking they are only sold by rental car agencies - NOT the case!)
This video stopped me from taking out a loan. I will protect my existing car (that runs fine) til the very end and I will continue to enjoy 'clean' pay days where I owe no one. Thanks again!
There is some truth to this but only to an extent. If you've got no money and you buy a $500 car get ready to pay out the nose to maintain it. Best case scenario is to buy a middle-aged Toyota, which if you've got no money, you're going to need to borrow a bit of money for.
Ugh...I've wanted to get a car for years, but I hate the thought of having a car note. I've never owned a car, never had a car note...ever! I've got enough saved to get buy something, but I hate my student loans more than I desire a car.
@@markg999 I bought a 2 year old used car for under 10K and 20K miles, and my interest is below 5% because i have an excellent credit score. It will be paid off in about 3.5 years.
@@TommyboyGTP Cool...I think the main thing is buying a car that for income and savings makes sense. So two people both make example $50k a year have 50k in savings no debt but house...if cash buyer was buying a $30k used car and car payment guy was buying a used car for $14k I'd say the car payment guy was making the right car purchase even though Ramsey says always pay cash.
@@markg999 My next purchase will be an EV. You can already find great deals out there, but i want to pay off my current car first. Overall cost of ownership they pay for themselves with the savings of gas vs. electric and much less maintenance.
Not saying Dave is incorrect, but why does he assume that if you have a car payment, you will have that payment forever? You can get a car, pay it off in 5 years, and then have no more payments for another 10 plus years if you chose a reliable car. Also, a lot of times, you can find deals for 0% apr. Cars do not depreciate nearly as much as they used to, and the payment will outpace depreciation. You can almost always get out of car loans without a loss if you keep it past the first year or so. The only way you would have permanent payments is if you lease forever
It’s a tough thing for sure, I’ve been an automotive master technician for 5 years and an expert level technician for 7 years before that, I’ve been around enough sales and finance people to know, you’re buying something that massively depreciates in value the moment you drive it off the lot, and you’ll have to spend lots of money maintaining it, and then things will still break on it, requiring even more money. It’s a lose lose.
Most people want the gratification of just driving a brand new car but it’s a terrible decision save that 507 for 1 year and get ur self a 6k car it’s be reliable and ur going to have 6yr to build wealth while every1 else is tied to a car note for 7yr and loosing money
@@stormblade1199 Mayb the blessing to help out ur kids grandkids family or friends or even better donate everything to a charity you know leave something impactful a legacy to world that u wasn’t just some stingy fk lol
I'm about to enter a car loan, but I'm getting a 2 year old car with 20k miles on it and I can pay it off in less than a year. I know I'm still losing money to interest, but I'm okay with losing $500 over the course of 1 year to not lose this deal. I can drive this for at least a decade haha
I bought a 2004 hyundai sonata for $3000 and it has lasted me about 4 years now. I had to do some repairs but nothing that has left me stranded on the side of the road. In the meantime I have been able to cash flow college and will graduate debt free. I think the moral of the story is that when you don’t have payments, you have money and with that you can use it to invest or buy whatever you want in cash.
I get the concept of being responsible with money and planning for the future.....but at what point will you actually live? What good is 6 million gonna do you if you spent your entire youth eating ramen noodles and driving clunkers only to have 6 million at 70 yrs old. Avg life expectancy is 80 something.
The main purpose especially if you’re of low income is to build wealth for your kids etc., then you teach them and the family wealth grows in a couple generations. It’s a sacrifice but it’s worth it in the long run. Not every rich family became rich in one generation. Sorry I mean wealthy, there is a difference.
stickshiftt If you’re good with money you can still save and spend enough to have a good time. Saving is first spending is second. It still beats working in your 50’s and 60’s to death because you still have a 20 year mortgage or a 7 year car loan. Did I mention no money or very little money saved up for retirement?
Man you live once. I just had a argument with my grandma about this like I’m not about to wait till 70 to finally live and where I’m from your lucky to make it to 21
I split the baby. I did a large down payment and I’m paying the rest off in 2 years even though I have a 4 year loan. I just pay extra on the principal every month. I got tired of used cars that kept breaking down. I wanted something a lot more reliable.
When you buy a used cheap car, be smart and don’t buy just by look, get a mechanic or a friend that knows mechanics and check the car before buying it, believe me, you will be happy of not paying on repair and only oil change and brakes. It happens to me and in 10 years I’m a master of buying cheap cars that last a lot of time. 😂😂😂
Not always practical to "Not get a car loan". Buying a used, used, used car (Say 8-10yrs old) that is cheap, you may end replacing that after a certain amount of time if it breaks down, a used car a few years old ranges $15-20k, and a new card $26-30k. I don't have that kind of cash sitting around. I recently, retired my 2008 Scion XB ... 215k on it, and bought a new Subaru Forrester. Used cars can be a gamble at times.
Interest rates are very low right now. If you have $10k saved for a car, and you have a choice to hand over that $10k to the car dealer or invest it while you make payments on a loan for five years, wouldn't you come out ahead by financing if the rate is low enough?
thats how you are suppose to do it...drive it another 5 years after paid off..at least you get something out if it ..after 7-10 years most are worth nothing but you got alot of good miles out of it...most people right after warranty is up and any little problem comes up they panic and buy new again....the car companies know this.
I just bought a new car because I got tired of having used vehicles breaking down constantly and being stuck without a car for days. Your gonna pay a car payment or a maintenance bill "every month" one way or another so I'm paying monthly for peace of mind.
Agree. If you can afford the interest, then financing for a short term (say 24 or max 36 months) is all right. I think the lesson Dave is teaching are towards dipheads who finance at 25% on a 84 months loan earning 30k a year.
Man, enjoy your life and do what makes you happy. So worried about saving money but can't do nothing with it once you're old as dirt or dead. I'm not saying go out and be willy-nilly with it. But If you have it enjoy it. You only got one life. It ain't no video game. You don't get a restart or a do-over. once it's done, it's done. You better live your life.
I don’t agree with you, living life is best when you have money in your bank, no payments only your house or bills.. life is when you can sleep like a baby not worrying about a nothing.. something that I learn from my family mistakes is that, they are normal just like your comment and they are a mess in their life and finances and everything.
@@alejandromazariegos9223 That's why I said don't go out being "willy-nilly" with it. My point is if you have/saving money, it's ok to spend it sometimes and have fun with it. But don't over do it. Enjoy the fruits of your labor sometimes. Life isn't about work and saving.
Back in September I bought a 2005 Toyota Avalon Limited in near mint condition with 158,000 miles for $3300 and its serving me well because I refuse to get car payment. Never in a million years.
Here's a gamble: If you have the money for the car ready, you could theoretically put all the money in an index fond and instead (if possible) get a cheap car loan (max 4-5%). After paying 5 years, you've maybe made (depending on the fond and loan) an additional 4%. But as said, that's a gamble.
If a 500 dollar car payment makes or breaks you financially then the problem isn't the car payment. You just don't make enough. The goal shouldn't be to not have a car payment. It should be to get to point where the payment is such a small percentage of your take home pay its irrelevant. Doesn't mean u finance aferarri making 100k a year. But is you make 100k a year and finance a 15k used car I don't think that's gonna be the straw that broke the camels back. Scarcity mindset
you right that will not be the straw the break the camel back, think about this, I save 500 a mouth, I have 50k in 6 years, I take 25k buy a car cash, I keep saveing 500 a mouth, in 10 year I need a new car but I now have 150k, take 35k buy a new car keep saveing, buy the time I need a new car again I have 220k or more, THAT all car payment, now do house payment, see that how you make money, think about it you pay 20k for a car you really pay 30k with intrest, invest the same 20k in the same amout of time and it worth 40k , so instead of lose 10k you gain 20k, do that for 50 years of you life and it a huge difference.
az21bob666 That could work in theory for some people. But the bigger picture is the mindset you're in when making financial decisions. Constantly worrying about not spending here and there and saving a few bucks is robbing you MENTALLY of the ability to put enough effort into expansion and making more money. You can't save your way into abundance. Hence why most "millionaires" Dave interviews is terrified of spending money because they saved their way there and have no idea about expansion and making more. The same way Dave doesn't like credit cards because they psychologicaly make you spend more is the same way penny pinching and saving robs people of truly reaching their earning potential and stay focused on saving $1 instead of making $100 in the same amount of time.
but only a few can make that 100, so for most people saveing work far better. and when you have money you have more freedom to take chance to make even more money.
az21bob666 if someone chooses to work in a field that doesn't make much money that is their personal choice. But they can't expect abundance by staying in it. All comes down to choices. Either you make it happen or you just stay complacent wherever you are. It's never been easier than today to start a side gig or hustle
That's why Ramsey is a charlatan. You hit on the .its one thing to go out buy a car you cant afford .it onther To tell people who are not making good Salaries they can become rich. It's not possible.
Dave Ramsey is the next best thing to not having a wife when you need someone to tell you "no." I suspect that I had a former neighbor who was a millionaire. He drove an old Plymouth Fury police cruiser for a car. And when he sold his house and had a tag sale, he commented on how usual it was to see a one-hundred dollar bill that one of the buyers paid with. For me, I would advise people: You never want to end up as the richest guy in the cemetery--enjoy your money while you are healthy and alive!
Rich people ask how much, poor people ask how much down and how much per month. Been there done that and never again. That’s the difference it’s a mentality.
Car is paid off but I need a transmission not sure if I should pay for transmission, get a used car, or just get rid of car to finish paying off $14,000 in debt...so confused
@@IMJP4 Maybe. Or medical advancements tack on a few decades. Or you have a legacy to pass on to the kids because you downgraded in cars decades ago. It also isnt just a car. It stacks on all things. You'll be rich far before retirement age.
Learned my lesson.. 0% interest on my focus for 6 years. I took a lose on the car but I will drive it till the wheels fall off... I feel like a lucky one.
The 2012 Ford Focus was a horrible story for my son. He bought it new. Not to mention the other electronics issues, the transmission could never be fixed even after throwing thousand of dollars in there. He had to get rid of it to stop the bleeding.
Used/cash older cars are a short term solution to saving money imo. You initially save money on the price, but once you’ve factored in insurance, gas, maintenance AND repairs in most cases, long term you came out worse. Cause you’ve spent way more money to keep the used/cash car going. In opposed to having a car note, insurance and a full warranty that gives you piece of mind that if something significant happens and you need repair, you know it’s covered. So many focus on money and not piece of mind and true reliability. If you can afford it get a new car from a reputable dealership, be honest about your situation and be open minded to car recommendations. Be smart about a deal and enjoy the new ride and piece of mind cause you never know when a used/cash car will die on you and how fast can you randomly bounce back and just buy another one in that event or shell our thousands for repairs.
Counter point, I drive a 2005 civic si with modifications. The motor can be replaced for around 1000 much like the transmission. Electrics would be worked on while putting in a new motor, labor could be 2000 on the high end of that for either. My motor is 260kxxx and runs like butter. It will be a few years before I need a replacement. Take my wife’s Subaru Impreza which is paid and also 20k brand new, my used Honda expenses are still far under the margin for the cost of a new car.
You can still get a low rate % on a solid used reliable car... Nothing wrong with that! He also failed to address repair risk cost on buying a $2,000 car!
I bought a $1,700 car that appeared to be in good condition when I bought it in May of 2018, since then I've spent almost $4,000 + on it in repairs and as it is broken down again, despite trying to keep up on maintenance, I'm due to have to pay likely another $1,000 in repairs. It's literally the reason I've had to take some time off from college, because I can't afford to keep repairing my vehicle (that I drive 45mins to class on my commute and to work) and still afford to pay for (read:cashflow) tuition 🤷♀️
CNNFakeNews makes a good point. Sometimes the peace of mind may be worth it. I'm currently actively considering it myself. Besides, you don't have to get a 20,000 to 40,000 loan for a car, my bf just got a used 2017 Nissan Rogue with low miles for less than 17,000 and there were plenty of smaller vehicles for cheaper than that 🤷♀️
Repairs are cheap for the most part it's labor cost that gets you, teach yourself to turn a wrench is something I'm trying to learn to save money and learn a new skill.
Well when you buy a used old car, you take your time, never go by eye, find a friend that know mechanics or pay 200 to a mechanic to check the car before buying believe me you will be ok. I bought a used Camry for 9000 cash, I like the car but before buying it all I wanted was to take it to my mechanic and the seller agree, the mechanic gave me the ok to buy it, after 5 years that car still running only expenses are oil changes and brakes.
Easier said than done for people in northern states. My trucks body is falling apart from years of winter roads and the salt. It's 20 years old. We can run vehicles into the ground all we want but you will eventually need to buy a newer vehicle and most of the used ones here are just as bad as mine.
I've been tempted to get another truck. My mind is changed though, my current truck is paid off. It's an old 2004 f150. Yes it need mechanical work to keep it going once or twice a year. Still it's paid off and no car payments. I'm gonna keep it that way!
First of all, I would like to say thank you. You save me on making a bad decision sir. I was actually searching on how to approve in car loan (even though what I was planning to get is a sports bike), and then I saw your video. I watched your video first before the other videos, and now I decided not to get a loan. Again, thank you.
When I was younger, we didn't have a lot of money. So my dad just bought used cars. We never had the luxury of buying brand new vehicles. MY parents slowly build wealth because of our small backyard business. Then having enough to invest, they ventured into rental property and flipping houses for reselling. Our parents, especially my mom, taught us how to be frugal. And now all of us, their children, have several rental buildings of our own. After decades of only using used cars, my dad now currently has 8 vehicles, all of which he purchased brand new using cash. i don't know why he needs 8, but he was a hard worker and I think he deserves them. 😊😊😊
$175 a month for my 2017 corolla and I get a new car after my lease. No headache from car maintenance and I’m chilling. His advice on this isn’t black n white but you do you
You're leasing a car? You realize you are always paying for the most expensive period of a car's life. Buy a 10k car never pay a dime in financing or leasing again. $176/month over 40 years at an interest rate of 8% (historic stock market returns) is $566,909.96
Andy What if he has the money to lease Corolla for 175 and also invest 175 a month. Don’t just assume. I think leasing is the best option if you have good credit.
@@lefthanded5473 Instead of leasing for 175 and investing 175 he could have bought cash and invested 350. Over 40 years that would net a little over $1.2 million Stay broke👍
@@meatball4409 Assuming he lives that extra 40 years too. Spending your entire life living in frugality is stupid. All of your savings will go to medical expenses in old age.
Buy new car. My car is 9 years old. 160,000 miles. I plan to push another 4 years then buy another one or maybe push it more till it has a major issue, well see. I haven't had no car trouble. Just change the oil and only I brought so far 2 new set of tires , 1 new set of brake pads . Car runs like a champ because I'm the first owner, Sure does feel good to have no payments for the past 5 years
Same could be said about saving up the full amount. Why would you pay cash when you can invest the lump sum into high return investments? I get what he’s saying but it seems like with his logic you should never finance anything.
That’s not short term thinking. If you have the cash to invest why put it toward a depreciating asset aka a new car? Why not invest your capital and make low interest monthly payments towards a car. This video just convinced me to finance my next car.
Car loan (or lease, which is basically a loan except you return the car at the end) = far more expensive than owning due to interest, has the same maintenance costs as owning, and you have to get the most expensive full coverage insurance on it.
I am mostly on team dave here. But opportunity cost has caught my attention. If I can pay a low interest rate on a car loan and earn higher interest on index funds and other like investments, why wouldn't I do that? I'm really trying to come up with a good counter argument but when that point came up in conversation I didn't really know what to say besides having peace of mind.
But see here's the rub...the guy didn't say he was going to have a car payment "for the rest of his life" as Dave is critiquing this guy. If the guy has a car payment for say 4-6 years and then keeps and drives the car for 15 or 20 years...that is smart. Not everyone has the cash on hand to plunk down $20K on a car. C'mon Dave...you know better. Bless your heart...
That is true...but I've seen idiots that get new cars every few years and rolled over past loans into new car and paying like $500+ on a Civic. The example you give would be fine but they are rare.
A reliable car, a mid or full size one, is typically 250 a month for 60 or maybe 72 months and after that, the car can easily last five or maybe even 10 years if well taken care of, you don't have to spend $500 a month for a car. There is no difference between saving 250 a month for a car or a car payment at $250 a month
FWIW-- assuming you have the credit to get a 2.9% interest rate, $250 gets you a loan for $14-16.5k over 60-72 months. A New Civic is $19450 (before taxes and fees and any options) and the Corolla $18700. Even if you can negotiate down from MSRP enough to cover the taxes and fees, you'd still have to be able chip in 15-30% or so as a down-payment to get a $250 payment.
@@jayc4715 in metro Atlanta, full coverage and liability or not that much different in price nowadays sadly my twenty-three-year-old car liability insurance is only about $33 less than my eleven-year-old Cars full coverage insurance
Nothing wrong with car payments if you can afford. The problem is people are getting cars with crazy high payments and end up not being able to pay it off and the car ends up on a tow truck.
Dave is assuming an 11.75% return rate for 40 consecutive years, that is not happening, forget about it! A normal investment, with acceptable levels of risk, would average (at best) around 9% over 40 years. So, at 9%, 40 years, $507 a month you would have $2,373,429. That is far from the hyperbolic $5,600,000 he mentions. What you could do is invest your lump sum of $38,370, keep your car payment around $300, invest the other $200 a month and still earn $2,321,801 after 40 years. Thats a present value difference of $23,213. It will only cost you $23,213 over 40 years to drive a car with a car payment, a warranty, and minimal maintenance compared to buying a car with cash, costly repairs and reliability worries. Dealing with an unreliable car could cost people more in the long run. Buying a car on payments can be done right, stop scaring people. Paying cash for everything isn't always the answer....... P.S. Smart millionaires lease their expensive cars because the lump sum payment isn't worth giving up when they are making money on it to cover the lease payments. EXAMPLE: You're rich and want to drive a Porsche 911 Carrera S. They cost roughly $125,000. So you have to decide: Lease = $1,299/ Month for 36 months and $9,819 due at signing. BUT you keep the $115,181 ($125,000 - $9,819) and invest it earning 9% earns you roughly $865 a month. SO, your lease payment is now down to $434/Month. The present value of this lease if now $24,971. You keep the lump sum and pay $24,971 over 3 years to drive a brand new Porsche! OR Cash = You pay $125,000 cash for the Porsche, and you pay for most of the maintenance (lets say on average $100/month) for 36 months. Now the big killer comes in, depreciation! Ouch! On Kelly Blue Book a three year old Porsche with 36,000 miles on it goes for only $81,000. SO, by paying cash ,the same car now cost you $47,491.
Financed a car once and I’ll never do it again. Debt Interest is slavery. It’s not sexy driving a beater around town but boy do I have peace of mind looking at my bank account.
It’s sounds so easy to never have a car payment. But it’s really hard to filter out thru used cars that are reliable. And then used car prices are insane right now.
Well this is when having a humble mentality is key when is to buy a used car, some people want a used cheap car that looks good just like the BMW, Mercedes but those cars are not reliable at all, when you go to the used car you need to get a Honda or Toyota and sometimes Nissan and buy sedan, Camry civic.. believe me you can’t go wrong.
Well being able to responsibly leverage debt allowed me to drive a corvette in my 20s instead of my 50s when I’m old lol. So to each their own if you are responsible. 👍🏻
Kind of hard to invest money when your car breaks and you don’t have thousands of dollars to buy a car and then lose your job. This is the part that people get stuck on. You can invest and have a reliable car with a warranty and a payment. And before anyone says anything, no I don’t do payments either. But still, I understand the thought process in why a car payment might be a necessary evil.
Is there a way I can request my down payment back from a used vehicle financed yesterday, without penalty. The dealer has not registered or insured the car yet either.
Perfect advice! Pay out of pocket for a $30,000+ vehicle, instantly lose that money on a liability, and scam yourself out of the opportunity cost of financing that money instead! Genuis
I set out to purchase a slightly used Suburban in October 2016 and they were going for around $41,000 - $43,000 with 50k miles on them. During my search, I found a brand new year-end clearance Suburban for $46,000 similarly equipped. Paying an additional $5,000 for 50k fewer miles, which equates to just over 3 years of useful life, was a good investment according to my math so I bought the new one. THis was before I was into the debt free lifestyle and I financed 50% of it at 2.99% but have recently paid it off. I figure it should last me 8 more years and I will start saving / investing for a new vehicle soon. Its better to earn interest while saving than to pay interest while paying for your car.
I generally agree but the car payment for 7 years vs investing for 30 is just an unfair comp. You have to use the same timeframe if you’re going to do that
I'm not a big fan of this guy but I will agree with what he has to say about loans and owing on credit cards. Besides it being wasteful, its actually life changing being completely free of debt. My last debt experience I had my mortgage, a car loan, a solar panel loan, an HVAC loan and more simultaneously. I was miserable.
Mark G .... so true on the mileage . My 2005 Camry has 245,000 miles and running fine and my 2002 Camry has 191,000 miles and running fine also. I keep the Maintenance up on both. No car payments since purchasing both used with low mileage many yrs ago
If you can’t pay cash for whatever it is that you want to buy, you can’t afford it. So save your money and when you have enough to pay cash, buy it. Don’t live on other people’s money. Live on your own money. Don’t owe anybody anything.
Okay but if you’re still buying a car because you need one and get a low interest loan, I still don’t see the issue. It decidedly doesn’t mean you’re going to “keep a car payment the rest of your life”. Pay 20% down, get a 3 year loan on a used car if you can’t pay in full and have the security you aren’t going to break down on the side of the road. Then if you lose your job, you shouldn’t be upside down on the loan and you sell it. I don’t want to live my life on egg shells eating ramen noodles until I retire at 65 with my pile of money I never enjoyed. “Any virtue carried to excess is a vice.” That’s how I feel about this. You have to use your best judgement for your situation.
cedric fundunburks lol. Also, I am 28. Guess what Dave was doing at 28? Filing for bankruptcy. Dave is really great for a financial foundation and he’s helped a lot of people including me, but it doesn’t mean that I agree with every single thing he says. I am a nurse practitioner doing home visits. My car has 110,000 miles on it. I have to have a reliable car. I’m busy paying off debt. My comment comes from the response to this particular struggle. I am fortunate to have a good income, could trade in my car, and could cash flow the rest for a decent car without much sacrifice at all if I paused my snowball. Two years ago when I worked as an RN still making decent money and above the median for my area, I wouldn’t have been able to do that without a year or more notice. What about people making average income and below average income? In my area, if you don’t have your own car, the only transportation you’re gonna be riding in is the struggle bus. Public transportation is practically nonexistent.
@@michaelbenesch1725 Sure, I'm not aware of anyone saying he hasn't helped anyone. What I'm suggesting is that it is possible that since not everyone is exactly the same, some people might be motivated by seeing small debts fall off while others might be more motivated watching their entire debt owed decrease faster. In some cases, there is little or no difference, but in some cases it could mean saving thousands of dollars and being debt free months earlier. Is it not possible for some one or some thing to be helpful and have it still possible to be more helpful? I think most people would agree that the March of Dimes is helpful-- but for every dollar they take in they spend about $0.25 on admin and fundraising. Can we also agree that if they could button things up and get that down to 15-20 cents on the dollar, that they could still be more helpful?
"Debt is always easy until you have it" --- Dave Ramsey
Until you have debt or got it cleared
True
Facts wish I found Dave earlier
Whenever I get close to getting a car loan I just come and watch a Dave Ramsey video on car loans and I'm fine again for the next 6 months
Same
Haha 😂
Yeah same. That’s why I’m here now.
He says buy in cash but if I have 25000 in cash and put that all into buying a car I'm losing the opportunity where I could invest 20000 and put 5000 into the car. My car loan would be 2-3%
Also I buy used not new. 3-4 years old
I’m not going to lie, God used Dave to renew my mind and begin to be patient with saving money.
Brother, Money Management And Self - Discipline Are The Main Keys To Never Going Broke. Always Remember That
Or - was it just the UA-cam algorithm? I don't sense anything miraculous here.
@@fitybux4664 He said God used to Dave to help him with money management. Dave pre dates UA-cam and algorithms. He didn’t say Dave’s videos “miraculously “ showed up in his suggestions.
@@fitybux4664 I’m not religious either, but relax my guy. Don’t have to be triggered every time somebody mentions God
@@stocksxbondage Yeah the Atheists seem to be easily triggered by God.
My husband drives a 2002 Toyota Camry and I drive a 2011 Hyundai Sonata. Both paid for. We are going to drive those suckers into the ground before we ever think about getting another car!!
That Hyundai will be in the grave before you know it lol.
"before we ever think about getting another car" -- we do the same at my house (2010 Wrangler and 2008 Mercury Milan), but we also periodically shop around even while our current cars are doing OK. That way when one of the cars craps out and isn't worth fixing, we already have pretty reasonable ideas about our replacements.
Otherwise in the rush to get the next car so that we can get to work and such, we might end up making a less informed decision on the next car.
@@rosen380 That's a very smart idea!
@@memphistiger4647 yeah you're telling me!! It's an OK get around car, but honestly I don't think I'll ever buy a Hyundai again
Dumb move
Save up for a decent used car, I hit the jackpot found myself a 2007 Camry with 35k miles on it and bought it for $7k in June, what a blessing. I’m gonna drive it into the dirt and maintain it as much as possible. Took me few weeks of looking for it but it was worth the wait
Wow good deal...change your fluids some new spark plugs and check your belt...but that car should last a long time my wife has an 08 with 190k miles.
Wow that's an amazing deal
Same man, 7k for a cadilac with only 50k miles. Feels good
Imagine finding a deal like this living in New Jersey in 2022🤦🏽♂️
Are you sure those are the real miles? Always then you see a car that’s almost 18 years with nothing in miles, please always check all the document and history to see real proof. If not you can get scam.
"90% of millionaires say they haven't had a car payment in decades"... probably because they are millionaires and can afford it.
Lol right
If you did not get it they spoke about the payments before they became millionaires, hope it helps.
I disagree, I dont have a car note.... far from a millionaire though. Just gotta save the cash!!! Discipline.... it's hard at first but its worth it in the long run
And they're also not driving a 1991 corolla either.
No they became millionaires because of how tight they were with money for years, that includes never buying new cars and having a car payment ! You should listen to the 'millionaire theme hour' that Dave does. It's mind blowing
I am not mediocre nor broke and I have a car loan. I have no debt besides my house. 401k in place, investments,college for my kids . I even have a Roth and a CD. Work full time and have a college degree.. Make good money . I dont think you can take all those millions to your grave my friends. 75 years old with 10 million you can't spend. Life not enjoyable. My school friend just passed away age 39. Life is short.
It’s still debt
@@youtubecommenter1000 Silly comment. So what if it's debt? A house is debt. Can you afford the debt is the question.
@@KayDejaVu Once again, it’s still debt. Just because you can afford it, does not mean it’s not debt.
@@youtubecommenter1000 lol. You're always going to be in some kind of debt in life at some point. Life ain't no video game. No restart. Once it's over that's it. You better live your life.
@@youtubecommenter1000 u can get rich off debt stop listening to this guy.
I have a 2004 honda, and it's almost at 200,000 miles. Transmission was giving out. All we did was paid 1700 to rebuild it and some new parts and she is driving agian!
Nice
Me too (99 Corolla)...then the timing chain broke 2.5 years later.
Oh love that
And how long have you been in use of it
@@regie957 sorry hearing that
And have you gotten it fixed
@Rose Santibanez . Sorry, but you paid more than %50 of the car’s total value to repair it??? Wow.
Cuz ur going into debt and paying interest on a vehicle that is slowly depreciating in value !
Investing Hustler *quickly
Unless it’s a Tacoma.
yes!!!! i got a job right out of college and this was my first and hardest lesson learned 10 years later but never again. i will teach this to my kids. never ever ever buy new. always used and cash or there is no deal.
Or you can finance a car that’s value is slowly increasing & is easy maintainable with regular maintence
Ayawrxsti Depends how old the car is
I know this is 4 years old. I tried buying 100k-150k mile cars for $5k and $10k in cash. Seemed great at first because we didn't have a payment, but even with great care they all broke down every 2 years and the fix was more than the car. Stress isn't worth it. The cars would have just ate up our emergency fund every year.
same
Did the “responsible” thing bought a car 4K in cash, every 6-8 weeks it would break down and I ended up using all my AAA tows. Constantly calling into work cuz the shit would clunk on my way in, financed a Camry for 15k going on two years not a single problem.
This is what I keep trying to tell my husband. One of our cars is on its last leg. I want to use it only for short trips and try to make it last until we can get 4-5K saved up to buy a decent used car, which would only take us a few months. He wants to finance. We have good credit and would get a low interest rate, but I don't want to pay any interest at all. I would rather save the 3 or 4 hundred a month that a car payment would take up and invest it in something that won't depreciate in value.
Your husband has a smart wife. That would be the best way to do it if you can. Also look for a Toyota they last forever if you take care of them.
Try to look for a Crown Victoria, Grand Marquis, Chevy/Geo Prizm, Toyota Corolla, Nissan Sentra, Chevy Cavalier, Pontiac Sunfire, Suzuki Swift, or Chevy/Geo Metro. The first two, look for 2002 and on; the other, look for 1996 and on (edit: the Sentra is 1996-1999 only). Many of them are under $3,000. Have a mechanic you trust look it over (including for VIN swapping and flood damage) before buying, and transfer the cashier's check and title in front of a DMV employee.
As for your husband, have him look at the inverted yield curve, and increase in companies buying back stocks with cheap debt. I think we're about to have a lot of layoffs to pay the increased debt service, and it's going to get a lot of people with car loans into a lot of trouble. I think we're going back to the days of 300-400 applications for every opening. Save the $300-400/month in the bank as a bigger emergency fund than Dave suggests.
@@EMichaelBall I agree with your suggestions for used car models. Toyotas are excellent in general, my mom had a Nissan Sentra for 18 years and it was still running strong when she sold it. I had a 94 Chevy Cavalier that I drove for years as a commuter car because at the time I also had a Grand Cherokee that I would drive when the weather was bad or when I had to haul a lot of people or cargo. The rest of the time I drove the Cavalier for the fuel economy. I gave it to my sister when I moved out of state. I couldn't take it with me, and she needed a car, so win/win. She finally got rid of it a couple of years ago because it just wasn't worth putting money into fixing it anymore, but it had 400,000 miles on the original engine. Not bad for a car that I paid $1200 for back in 2002. My uncle, who I consider to be a very smart guy, swears by Geos. He gets a new truck every 2 years for work, but he loves the Geos for long commutes and also for when fuel prices skyrocket. He says that they're cheap, reliable, get great fuel economy, and are surprisingly comfortable (he's 6'5").
I think you bring up a good point Kaylee but I also think that when you have the cash to pay for the car in full it might be smarter to take a loan and invest the money instead. Because if you are able to bring in more return than the interest on the loan you can benefit that way. I recently did a video talking about this
@@EMichaelBall I have a 2011 crown Vic nice car paid cash never had a car payment debt free only way if you can .
Step 1: Buy a used Toyota
Step 2: Refer to step 1
Thank me later
I bought a new one 14 years ago. paid off for 10 years now.
Maintenance maintenance maintenance makes it hum
used Toyotas with decent miles are very difficult to find where I live. I did get lucky almost 10 years ago with one, but my wife friggin' wrecked it three years ago. Problem around here is everyone either drives them until the wheels fall off or they all own 4x4 pickups
@@drunclecookie216 Same around me... reliable used cars sell for so close to the new price, that I don't understand the justification for going used in some cases.
Want a 2-3 year old Lincoln, Cadillac, BMW, Merc, Audi, etc with
@@rosen380 That's because those cars are not reliable..why they lose value so quick.
@@markg999 Not entirely and not the point. The point was that if you are looking for a used but still relatively new car, you will save very little on an Accord versus buying new. But if you are in the market for a luxury car, you can save quite a bit versus buying new.
Had a company car most of my career and my wife drove the used cars we bought from the company. That was a huge benefit.
Whats the company name
I just paid off my car loan. Never again!
Feel you.
I just signed a bad loan deal on a car I’m financing I’m screwed 🤦♂️🤦♂️they want thousands in interest I got a 23.99% interest bc I didn’t see the percentage I went in blind now I’m paying for it 🤦♂️🤦♂️🤦♂️🤦♂️
@@CarlosRuiz-cc1eryou sure are.
@@turtleanton6539 fortunately,i was able to get out of the contract with no damage whatsoever to my credit. I learned a valuable lesson and I now know what knowledge to come into a car dealership with.
@@turtleanton6539 fortunately, I was able to get out of the contract with no damage to my credit.lesson learned.
Exactly! Also, when you get a car loan, your car Insurance goes up a lot until the loan is paid off.
Anette yeah, they rip you off. I just got out of my car loan. You end up paying double for the car after you pay it off due to insurance and gas and maintenance!
not really mines went up only 12 dollars
You don't have peace worrying about if this car is going to die on me on the way to work on the hwy. Have peace of mind with that car note, you sound disciplined enough to handle it. Everything doesn't work for everybody. Do what's best for you and your situation.
Exactly! I always see people talk about buying a $200 dollar car and riding it to death, well that $200 might actually be the death of you. Be smart buy used and pay it off asap.
Plus who says get a $500 payment. Bought my truck new in 2013 for $21,800. My payment was $275 a month. It has been paid off for 2 years now. Is there no middle ground?
@@DustinDeweerd Dave Ramsey and his sheep don't do middle ground. There is exactly one way to do everything and that applies to every person on Earth in every situation.
Some people just lack comprehension I see.. He said that the AVERAGE CAR PAYMENT is $500 (New). Plus not everyone has decent/ good credit being that isn't even AVERAGE in itself.
@@MrDozier23 So spicy.
If your in a situation where you need a car to get around due to a job or being involved in an accident & your establishing credit, Have little to no debt, and are a responsible person A car payment will help you in the long run credit wise if you're applying for a mortgage etc. Doesn't mean you have to get the most expensive car. You can get by with a 5k-8k loan for 24-48 months depending on your income being disciplined.
The problem that must dealers the only sale used cars under 10k want cash, unless you get the loan from the bank
Avg used car price in 2022 is now close to 30k. Good luck paying cash!
I know right? Save up money for however many years just to get a used car that we need now. For as long as the monthly payments are reasonable there’s no shame in paying over time. Dave has this thing that EVERYONE wants to be a millionaire and strives to live that kind of lifestyle. He seems to be out of touch with what people actually desire.
That's because overpriced Trucks are what drives the Average up. If you don't mind driving a 20 year old car, you could get anything for cash.
Hey Dave, I put a 2K deposit on a brand new pickup truck with a 37K price tag, and went through all the paperwork. My finances are great, but after watching your show, I decided to cancel the deal. I never had a car payment before and realized if I can't pay it cash, then I probably shouldn't buy it. I'm 28 and earn over 6 figures. My coworker is selling me a 10yr old honda civic fully loaded for $1500. I'll continue saving my money, and rent a truck when I absolutely need it. One day, I'll buy the toys I want with cash. Now I gotta go to the dealer and fight for my deposit or at least part of it. If I lose part of or all of the deposit, it's a much cheaper lesson learned. Thanks for the great advice.
👏🏼🔥
Wise decision
Was it cash deposit?
thank yu am in with u..no hurry
As a CFP I can tell you this video makes little sense to me. 1 - if having a car is needed, then it's not an option to just wait. 2 - why does he assume that the person is going to spend $507 for 7 years. 3 - Why does he assume he is ALWAYS going to have a car payment? If he buys and maintains a decent car, he can drive the car for 10-15 years. 4 - where is he getting that 5.6 million ? What rate of return is he assuming? This feels like advice from someone who gets to preach but doesn't get to work with real people anymore. I just sat down with a 25 year old who is trying to decide on a $250 a month car payment for 5 years vs listening to this advice, but the cost of getting to work would be almost as much, if not more, than the $250 and he would have nothing to show for it other than a favorite seat on the City train (and no car for weekends or anything else) After 5 years he would have a reliable car and no payment for at least 5 years or more. And, yes, Millionaires haven't had car loans. Great. They can write a check. But how about advice for people living in the real world? I have a successful practice and my share of millionaire clients, but I also do a lot of free work in the community and have clients that aren't millionaires. General advice is great people. He is right - debt is bad when it's abused. Don't buy a new car with a new loan every 4 years like some people and don't lease. But do remember to think for yourselves and question when you hear general advice like this.
You are not factoring in full insurance, gas, maintenance, repairs. At the end of the loan term you end up spending a small fortune for something that is worth much less than what you paid for it.
@@guillermogouldburn763 yes, but those are things you'd pay for even if you payed for it in cash. Except for maybe liability instead of full coverage.
guillermo gouldburn so when you buy a car cash you don’t gotta pay for gas, maintenance, or repairs? Cause I’m pretty sure that comes with every car
He said investing $507 from age 30 to 70 will make you approximately 5.6 Million, so save 507 for 40 years and hope to maintain a 12.65% growth rate and be alive too. This advice is useless if you're responsible with money and don't keep buying new cars. I need the car now and some things can only be useful and enjoyable if acquired at the right age.
@@sleepytoe8 I'll be honest woth everyone. Idc about $500 a month turning into 5.6 million if I don't get to drive a car that I like and enjoy driving. I don't understand the mentality of not living and enjoying your money until you retire. Being responsible with debt and saving for retirement compared to not ever driving the car you want is stupid. You don't have to have millions saved to drive a nice car.
My car payment is $98 but I throw all my extra savings at it each payment. The car only cost $3300 and the reason for borrowing such a small amount is that I’m in college and so rather than blow through all my savings to buy a car, I can keep more liquidity with 20% down.
Plus having a reliable car has enabled me to take more shifts at work so now with that as well as regular income, ill have the car paid off in like 4 months.
My point is just be smart and live within your means
IHEartLReoy I just started my freshman year, I currently don’t work but I do get refunds, and I get 2,500 but my mom asks for 1k. What type of car did you get? How many miles did it have? What year is it from? How long have you had it ? and does it ever just stop functioning out of no where?
How does someone even get a loan that low? I cant even borrow 7100 with 659 credit score and only 9k on student loans. Its mind blowing
XxToptankxX Yeah Capital One wanted 7-8k down and like 500 a month for a 2020 corolla.
Living below your means is wiser. Harder to do, but typically safer
So true Dave! Thankfully paying mine off in the next few months! 😁 I plan to NEVER borrow again!
Congratulations, paid mine off 10 months ago.... it's an awesome feeling and a burden lifted!!!!
Your on the right track beautiful
@@BigCed Thank you 😊
@savageheartbeat oh yes! I can't agree more!! 😄
I hope you liked your car.
Im not ever getting a car loan again. EVER..EVER..NEVER AGAIN.
People also tend to buy more expensive cars that they don’t need with a car payment. I bought a top of the line crossover thinking I would use all the features. Barely used any of them! Nothing wrong with STANDARD trim Honda, Ford, or Toyota. Your wallet will thank you in the long run.
This times a thousand....when paying cash you buy something you can afford. Easy loans have made college and car cost go up a good amount.
Let's never buy anything ever and save our money until we die👍
So basically if you are poor what options do you have but a car payments or save for years just to get a car I have to be missing something.
I don't think he is completely against car payments, but if you are poor why not finance a $3000 car instead of going to the dealer and financing a $20,000 one?
@@jundialhaqiqa9907 he’s against financing period. If you can buy it outright you can’t afford it.
@@JustINformU That's not true at all lol the wealthiest people finance all their luxuries
@@stormblade1199 Dave is wealthy and he doesn't lol
decent used vehicles are very difficult to find where I live (very very rural area) and owning a car here is a necessity if you want to go to work or buy groceries as there is zero public transportation and everything is 10+ miles away from each other. I have gotten lucky in the past with used cars, but most of the time I can never find a good deal with decent miles. Everyone around here will keep those used cars with decent miles and drive them until the wheels fall off or they all own 4x4 pickups which do me no good.
That is actually common everywhere these days. Used car market is not like it was a decade ago. Few "bargains" - the ones available tend to be former rental cars (and don't be fooled thinking they are only sold by rental car agencies - NOT the case!)
This video stopped me from taking out a loan. I will protect my existing car (that runs fine) til the very end and I will continue to enjoy 'clean' pay days where I owe no one. Thanks again!
There is some truth to this but only to an extent. If you've got no money and you buy a $500 car get ready to pay out the nose to maintain it. Best case scenario is to buy a middle-aged Toyota, which if you've got no money, you're going to need to borrow a bit of money for.
Ugh...I've wanted to get a car for years, but I hate the thought of having a car note. I've never owned a car, never had a car note...ever! I've got enough saved to get buy something, but I hate my student loans more than I desire a car.
Just never buy anything ever... save your money and when you die you will have nothing and someone will get the money... Great plan
@@mjuberian yeah max out your cards get five mortgages 😂😂😂😂 and snort coke on weekends.
The car payment price is for new cars used cars are way cheaper
But interest rate is higher for used like around 5% or higher...new is pretty low. I pay cash now @$!@# car loans.
@@markg999 I bought a 2 year old used car for under 10K and 20K miles, and my interest is below 5% because i have an excellent credit score. It will be paid off in about 3.5 years.
@@TommyboyGTP Cool...I think the main thing is buying a car that for income and savings makes sense. So two people both make example $50k a year have 50k in savings no debt but house...if cash buyer was buying a $30k used car and car payment guy was buying a used car for $14k I'd say the car payment guy was making the right car purchase even though Ramsey says always pay cash.
@@markg999 My next purchase will be an EV. You can already find great deals out there, but i want to pay off my current car first. Overall cost of ownership they pay for themselves with the savings of gas vs. electric and much less maintenance.
@@TommyboyGTP What sort of EV? Tesla I am not sold on yet...beautiful cars but have some build and reliability issues from some owners.
Financing not bad if you can pay your car off with ease. It’s all about how you manage your money.
Not saying Dave is incorrect, but why does he assume that if you have a car payment, you will have that payment forever? You can get a car, pay it off in 5 years, and then have no more payments for another 10 plus years if you chose a reliable car. Also, a lot of times, you can find deals for 0% apr. Cars do not depreciate nearly as much as they used to, and the payment will outpace depreciation. You can almost always get out of car loans without a loss if you keep it past the first year or so. The only way you would have permanent payments is if you lease forever
He's hyperbolic because he's dave ramsey. Having no debt is his big scary selling point.
Everytime i think about buying a car like my friends, i watch this video.
Thanks Dave
You probably can’t afford a car payment like your friends 🤣😂
Exactly why I’m here 😭
@@Emolovesblack28451 (update) I just purchased my first home about a year ago. So keep at it.
It’s a tough thing for sure, I’ve been an automotive master technician for 5 years and an expert level technician for 7 years before that, I’ve been around enough sales and finance people to know, you’re buying something that massively depreciates in value the moment you drive it off the lot, and you’ll have to spend lots of money maintaining it, and then things will still break on it, requiring even more money. It’s a lose lose.
Most people want the gratification of just driving a brand new car but it’s a terrible decision save that 507 for 1 year and get ur self a 6k car it’s be reliable and ur going to have 6yr to build wealth while every1 else is tied to a car note for 7yr and loosing money
What's the point of building wealth if you're so stingy that you don't spend it lol
@@stormblade1199 Mayb the blessing to help out ur kids grandkids family or friends or even better donate everything to a charity you know leave something impactful a legacy to world that u wasn’t just some stingy fk lol
@@ItsMikeArre So you want me to work hard my entire life just to give it all away? You stupid bro😂
@@stormblade1199 the rich get richer and the poor get poorer my friend it’s that mind set that keeps u on food stamps
@@ItsMikeArre Do you think you can become a billionaire by saving money?😂😂😂😂😂
I'm about to enter a car loan, but I'm getting a 2 year old car with 20k miles on it and I can pay it off in less than a year. I know I'm still losing money to interest, but I'm okay with losing $500 over the course of 1 year to not lose this deal. I can drive this for at least a decade haha
I bought a 2004 hyundai sonata for $3000 and it has lasted me about 4 years now. I had to do some repairs but nothing that has left me stranded on the side of the road. In the meantime I have been able to cash flow college and will graduate debt free. I think the moral of the story is that when you don’t have payments, you have money and with that you can use it to invest or buy whatever you want in cash.
I get the concept of being responsible with money and planning for the future.....but at what point will you actually live? What good is 6 million gonna do you if you spent your entire youth eating ramen noodles and driving clunkers only to have 6 million at 70 yrs old. Avg life expectancy is 80 something.
What good is working your whole life to pay off debt? If you save up you can retire earlier and use the money to make more money and buy nicer things.
Jeramithehuman but by that time, your old and money will be spent on medical expenses. I think that’s his argument.
The main purpose especially if you’re of low income is to build wealth for your kids etc., then you teach them and the family wealth grows in a couple generations. It’s a sacrifice but it’s worth it in the long run. Not every rich family became rich in one generation. Sorry I mean wealthy, there is a difference.
stickshiftt If you’re good with money you can still save and spend enough to have a good time. Saving is first spending is second. It still beats working in your 50’s and 60’s to death because you still have a 20 year mortgage or a 7 year car loan. Did I mention no money or very little money saved up for retirement?
Man you live once. I just had a argument with my grandma about this like I’m not about to wait till 70 to finally live and where I’m from your lucky to make it to 21
If you have a good income, you can still get a new car at $18-22k your car doesn't have to be a & 50k BMW.
So much truth in this.
Or wait 3 years till that 50k bmw is 20-25k?
tworains2 Then the maintenance bills will slowly start creeping up on ya.
@@lefthanded5473 extended warrenty
I split the baby. I did a large down payment and I’m paying the rest off in 2 years even though I have a 4 year loan. I just pay extra on the principal every month. I got tired of used cars that kept breaking down. I wanted something a lot more reliable.
You still are losing money though. 10% lost as soon as you drove it off the lot. A 2-3 year old car with low miles is substantially cheaper.
There’s no point in paying extra for the principal when you’re just paying mostly interest
@@yunga8305 The interest is calculated based on the principal amount. So if you pay down the principal, the interest payment drops as well.
When you buy a used cheap car, be smart and don’t buy just by look, get a mechanic or a friend that knows mechanics and check the car before buying it, believe me, you will be happy of not paying on repair and only oil change and brakes. It happens to me and in 10 years I’m a master of buying cheap cars that last a lot of time. 😂😂😂
Not always practical to "Not get a car loan". Buying a used, used, used car (Say 8-10yrs old) that is cheap, you may end replacing that after a certain amount of time if it breaks down, a used car a few years old ranges $15-20k, and a new card $26-30k. I don't have that kind of cash sitting around. I recently, retired my 2008 Scion XB ... 215k on it, and bought a new Subaru Forrester. Used cars can be a gamble at times.
Interest rates are very low right now. If you have $10k saved for a car, and you have a choice to hand over that $10k to the car dealer or invest it while you make payments on a loan for five years, wouldn't you come out ahead by financing if the rate is low enough?
Right?
Yes that's true but Dave doesn't teach people about one of the most important concepts in financial literacy which is *LEVERAGE*
Paid for a new car 14 years ago.
I stuck to a low budget.
Paid it off 10 years ago.
I MAINTENANCE IT TO DEATH !
Rides like new
Sun Set what kind of car?
And if it gets wrecked you’ll be making another loan for 10 years
The dream! Glad to hear it's worked out for you!
wont that maintenance bill just keep going up n up
thats how you are suppose to do it...drive it another 5 years after paid off..at least you get something out if it ..after 7-10 years most are worth nothing but you got alot of good miles out of it...most people right after warranty is up and any little problem comes up they panic and buy new again....the car companies know this.
I just bought a new car because I got tired of having used vehicles breaking down constantly and being stuck without a car for days. Your gonna pay a car payment or a maintenance bill "every month" one way or another so I'm paying monthly for peace of mind.
Agree. If you can afford the interest, then financing for a short term (say 24 or max 36 months) is all right. I think the lesson Dave is teaching are towards dipheads who finance at 25% on a 84 months loan earning 30k a year.
I own a 2015 Mitsubishi Mirage with 22 Thousand Kilometers, not Miles. Fully paid out and living the Dream!
I saved $9,000 and I bought Toyota Camry 2012 with 45,000 miles. The dealership would charge me 17,000 same car with 110,000 miles.
Intrest is the main issue stay away from it
I am still in Baby Step #2 and have paid off my car!!!! Thank you Dave Ramsey for showing the world the WAY!!!!!
@Channel Twenty One thanks
That instance gratification make people broke🚗
100%%%%%
Man, enjoy your life and do what makes you happy. So worried about saving money but can't do nothing with it once you're old as dirt or dead. I'm not saying go out and be willy-nilly with it. But If you have it enjoy it. You only got one life. It ain't no video game. You don't get a restart or a do-over. once it's done, it's done. You better live your life.
I don’t agree with you, living life is best when you have money in your bank, no payments only your house or bills.. life is when you can sleep like a baby not worrying about a nothing.. something that I learn from my family mistakes is that, they are normal just like your comment and they are a mess in their life and finances and everything.
@@alejandromazariegos9223 That's why I said don't go out being "willy-nilly" with it. My point is if you have/saving money, it's ok to spend it sometimes and have fun with it. But don't over do it. Enjoy the fruits of your labor sometimes. Life isn't about work and saving.
I financed a motorcycle a few years ago worst decision I ever made.
I don't care how rich I am when I'm 70 bro😂 I can't party no more at that age
Have fun
What's the point of working hard all your life just to pass your money on and never enjoy it
@@stormblade1199 you’re lineage will be broke forever that’s the point
@@luisbarrios4430 but what if you’re the only one left
@@realptkyle then go ahead lol
“Debt always seems easy until you have it”🔥🔥🔥
I’m young and don’t know much about cars. Thank you for being clear and getting right to the point
I have not had a car payment in many years. I also have a credit card, no balance, as I pay off the card in full each month.
Exactly the same here. It feels great not giving money away doesn’t it
Back in September I bought a 2005 Toyota Avalon Limited in near mint condition with 158,000 miles for $3300 and its serving me well because I refuse to get car payment. Never in a million years.
Here's a gamble:
If you have the money for the car ready, you could theoretically put all the money in an index fond and instead (if possible) get a cheap car loan (max 4-5%).
After paying 5 years, you've maybe made (depending on the fond and loan) an additional 4%.
But as said, that's a gamble.
If a 500 dollar car payment makes or breaks you financially then the problem isn't the car payment. You just don't make enough. The goal shouldn't be to not have a car payment. It should be to get to point where the payment is such a small percentage of your take home pay its irrelevant. Doesn't mean u finance aferarri making 100k a year. But is you make 100k a year and finance a 15k used car I don't think that's gonna be the straw that broke the camels back. Scarcity mindset
you right that will not be the straw the break the camel back, think about this, I save 500 a mouth, I have 50k in 6 years, I take 25k buy a car cash, I keep saveing 500 a mouth, in 10 year I need a new car but I now have 150k, take 35k buy a new car keep saveing, buy the time I need a new car again I have 220k or more, THAT all car payment,
now do house payment,
see that how you make money,
think about it you pay 20k for a car you really pay 30k with intrest, invest the same 20k in the same amout of time and it worth 40k , so instead of lose 10k you gain 20k, do that for 50 years of you life and it a huge difference.
az21bob666 That could work in theory for some people. But the bigger picture is the mindset you're in when making financial decisions. Constantly worrying about not spending here and there and saving a few bucks is robbing you MENTALLY of the ability to put enough effort into expansion and making more money. You can't save your way into abundance. Hence why most "millionaires" Dave interviews is terrified of spending money because they saved their way there and have no idea about expansion and making more. The same way Dave doesn't like credit cards because they psychologicaly make you spend more is the same way penny pinching and saving robs people of truly reaching their earning potential and stay focused on saving $1 instead of making $100 in the same amount of time.
but only a few can make that 100, so for most people saveing work far better. and when you have money you have more freedom to take chance to make even more money.
az21bob666 if someone chooses to work in a field that doesn't make much money that is their personal choice. But they can't expect abundance by staying in it. All comes down to choices. Either you make it happen or you just stay complacent wherever you are. It's never been easier than today to start a side gig or hustle
That's why Ramsey is a charlatan.
You hit on the .its one thing to go out buy a car you cant afford .it onther
To tell people who are not making good
Salaries they can become rich. It's not possible.
Dave Ramsey is the next best thing to not having a wife when you need someone to tell you "no."
I suspect that I had a former neighbor who was a millionaire. He drove an old Plymouth Fury police cruiser for a car. And when he sold his house and had a tag sale, he commented on how usual it was to see a one-hundred dollar bill that one of the buyers paid with.
For me, I would advise people: You never want to end up as the richest guy in the cemetery--enjoy your money while you are healthy and alive!
If you make 3000k + a month a 200 car payment is nothing. Get it.
That just means You can't afford the car,just the payment.
Rich people ask how much, poor people ask how much down and how much per month. Been there done that and never again. That’s the difference it’s a mentality.
Chris is going to be broke in the future lol
@@jessicaalderson4043 With that logic, no one in the country can afford to own a home you can only afford the mortgage.
Matthew772 sound like a hater
Car is paid off but I need a transmission not sure if I should pay for transmission, get a used car, or just get rid of car to finish paying off $14,000 in debt...so confused
Just paid off my truck. I owed 30k at the beginning of this year but after hearing Dave I sped the process up and sacrificed. Feels good
The math on his 5.6 million statement applies to getting a 12.5% return over 40 years.......... lol
Wade Slatten. He got me. I had to do the math by myself and then wondered why i believed him for a sec.
You should easily hit 10+% on a mutual fund and its over lifetime. Add another car in there. Over 60yrs
Rich by your 65!!!!...🤣🤣 i might be dead by then
@@IMJP4 Maybe. Or medical advancements tack on a few decades. Or you have a legacy to pass on to the kids because you downgraded in cars decades ago.
It also isnt just a car. It stacks on all things. You'll be rich far before retirement age.
Learned my lesson.. 0% interest on my focus for 6 years. I took a lose on the car but I will drive it till the wheels fall off... I feel like a lucky one.
The 2012 Ford Focus was a horrible story for my son. He bought it new. Not to mention the other electronics issues, the transmission could never be fixed even after throwing thousand of dollars in there. He had to get rid of it to stop the bleeding.
Used/cash older cars are a short term solution to saving money imo. You initially save money on the price, but once you’ve factored in insurance, gas, maintenance AND repairs in most cases, long term you came out worse. Cause you’ve spent way more money to keep the used/cash car going. In opposed to having a car note, insurance and a full warranty that gives you piece of mind that if something significant happens and you need repair, you know it’s covered. So many focus on money and not piece of mind and true reliability. If you can afford it get a new car from a reputable dealership, be honest about your situation and be open minded to car recommendations. Be smart about a deal and enjoy the new ride and piece of mind cause you never know when a used/cash car will die on you and how fast can you randomly bounce back and just buy another one in that event or shell our thousands for repairs.
Counter point, I drive a 2005 civic si with modifications. The motor can be replaced for around 1000 much like the transmission. Electrics would be worked on while putting in a new motor, labor could be 2000 on the high end of that for either. My motor is 260kxxx and runs like butter. It will be a few years before I need a replacement. Take my wife’s Subaru Impreza which is paid and also 20k brand new, my used Honda expenses are still far under the margin for the cost of a new car.
Word to the wise, don’t buy a used bmw or Audi or Volkswagen or Mercedes. Repairs and preventative maintenance kills you.
But miss a few payments on that car note, you will lose the car!
3 used cars and all paid off. Money in the bank for repairs. I love it!
You can still get a low rate % on a solid used reliable car... Nothing wrong with that! He also failed to address repair risk cost on buying a $2,000 car!
So paying an extra few thousand on repairs justifies getting a 20-40k loan? The interest itself will exceed the repair cost
I bought a $1,700 car that appeared to be in good condition when I bought it in May of 2018, since then I've spent almost $4,000 + on it in repairs and as it is broken down again, despite trying to keep up on maintenance, I'm due to have to pay likely another $1,000 in repairs. It's literally the reason I've had to take some time off from college, because I can't afford to keep repairing my vehicle (that I drive 45mins to class on my commute and to work) and still afford to pay for (read:cashflow) tuition 🤷♀️
CNNFakeNews makes a good point. Sometimes the peace of mind may be worth it. I'm currently actively considering it myself. Besides, you don't have to get a 20,000 to 40,000 loan for a car, my bf just got a used 2017 Nissan Rogue with low miles for less than 17,000 and there were plenty of smaller vehicles for cheaper than that 🤷♀️
Repairs are cheap for the most part it's labor cost that gets you, teach yourself to turn a wrench is something I'm trying to learn to save money and learn a new skill.
Well when you buy a used old car, you take your time, never go by eye, find a friend that know mechanics or pay 200 to a mechanic to check the car before buying believe me you will be ok. I bought a used Camry for 9000 cash, I like the car but before buying it all I wanted was to take it to my mechanic and the seller agree, the mechanic gave me the ok to buy it, after 5 years that car still running only expenses are oil changes and brakes.
Easier said than done for people in northern states. My trucks body is falling apart from years of winter roads and the salt. It's 20 years old. We can run vehicles into the ground all we want but you will eventually need to buy a newer vehicle and most of the used ones here are just as bad as mine.
I've been tempted to get another truck. My mind is changed though, my current truck is paid off. It's an old 2004 f150. Yes it need mechanical work to keep it going once or twice a year. Still it's paid off and no car payments. I'm gonna keep it that way!
First of all, I would like to say thank you. You save me on making a bad decision sir. I was actually searching on how to approve in car loan (even though what I was planning to get is a sports bike), and then I saw your video. I watched your video first before the other videos, and now I decided not to get a loan. Again, thank you.
When I was younger, we didn't have a lot of money. So my dad just bought used cars. We never had the luxury of buying brand new vehicles. MY parents slowly build wealth because of our small backyard business. Then having enough to invest, they ventured into rental property and flipping houses for reselling. Our parents, especially my mom, taught us how to be frugal. And now all of us, their children, have several rental buildings of our own. After decades of only using used cars, my dad now currently has 8 vehicles, all of which he purchased brand new using cash. i don't know why he needs 8, but he was a hard worker and I think he deserves them. 😊😊😊
$175 a month for my 2017 corolla and I get a new car after my lease. No headache from car maintenance and I’m chilling. His advice on this isn’t black n white but you do you
You're leasing a car? You realize you are always paying for the most expensive period of a car's life. Buy a 10k car never pay a dime in financing or leasing again. $176/month over 40 years at an interest rate of 8% (historic stock market returns) is $566,909.96
Andy agreed. Some people love being broke
Andy What if he has the money to lease Corolla for 175 and also invest 175 a month. Don’t just assume. I think leasing is the best option if you have good credit.
@@lefthanded5473 Instead of leasing for 175 and investing 175 he could have bought cash and invested 350. Over 40 years that would net a little over $1.2 million
Stay broke👍
@@meatball4409 Assuming he lives that extra 40 years too. Spending your entire life living in frugality is stupid. All of your savings will go to medical expenses in old age.
Buy new car.
My car is 9 years old. 160,000 miles. I plan to push another 4 years then buy another one or maybe push it more till it has a major issue, well see.
I haven't had no car trouble.
Just change the oil and only I brought so far 2 new set of tires , 1 new set of brake pads .
Car runs like a champ because I'm the first owner,
Sure does feel good to have no payments for the past 5 years
Same could be said about saving up the full amount. Why would you pay cash when you can invest the lump sum into high return investments? I get what he’s saying but it seems like with his logic you should never finance anything.
Yeah, that’s pretty much his logic in a nutshell.
He’s pretty much anti-finance, and encourages you to not do it altogether if you’ve watched his videos
That’s not short term thinking. If you have the cash to invest why put it toward a depreciating asset aka a new car? Why not invest your capital and make low interest monthly payments towards a car. This video just convinced me to finance my next car.
Car loan (or lease, which is basically a loan except you return the car at the end) = far more expensive than owning due to interest, has the same maintenance costs as owning, and you have to get the most expensive full coverage insurance on it.
Please tell me how the “average” car payment is over 84 months when that’s the longest term possible ?!
Man😂
Ford has 120 month terms
I can get a 0% interest 15k loan on a 30k mile car though. Doesn't make sense to me to but a 3000 car with high miles that could cause issues.
My thoughts
I am mostly on team dave here. But opportunity cost has caught my attention. If I can pay a low interest rate on a car loan and earn higher interest on index funds and other like investments, why wouldn't I do that?
I'm really trying to come up with a good counter argument but when that point came up in conversation I didn't really know what to say besides having peace of mind.
But see here's the rub...the guy didn't say he was going to have a car payment "for the rest of his life" as Dave is critiquing this guy. If the guy has a car payment for say 4-6 years and then keeps and drives the car for 15 or 20 years...that is smart. Not everyone has the cash on hand to plunk down $20K on a car. C'mon Dave...you know better. Bless your heart...
That is true...but I've seen idiots that get new cars every few years and rolled over past loans into new car and paying like $500+ on a Civic. The example you give would be fine but they are rare.
thank you for your understanding @@markg999
@@MTobin1000 , You're Welcome
A reliable car, a mid or full size one, is typically 250 a month for 60 or maybe 72 months and after that, the car can easily last five or maybe even 10 years if well taken care of, you don't have to spend $500 a month for a car. There is no difference between saving 250 a month for a car or a car payment at $250 a month
FWIW-- assuming you have the credit to get a 2.9% interest rate, $250 gets you a loan for $14-16.5k over 60-72 months. A New Civic is $19450 (before taxes and fees and any options) and the Corolla $18700.
Even if you can negotiate down from MSRP enough to cover the taxes and fees, you'd still have to be able chip in 15-30% or so as a down-payment to get a $250 payment.
Buy a $3000 Toyota cash..and liability insurance instead of full coverage..
@@jayc4715 in metro Atlanta, full coverage and liability or not that much different in price nowadays sadly my twenty-three-year-old car liability insurance is only about $33 less than my eleven-year-old Cars full coverage insurance
Nothing wrong with car payments if you can afford. The problem is people are getting cars with crazy high payments and end up not being able to pay it off and the car ends up on a tow truck.
Dave is assuming an 11.75% return rate for 40 consecutive years, that is not happening, forget about it! A normal investment, with acceptable levels of risk, would average (at best) around 9% over 40 years. So, at 9%, 40 years, $507 a month you would have $2,373,429. That is far from the hyperbolic $5,600,000 he mentions.
What you could do is invest your lump sum of $38,370, keep your car payment around $300, invest the other $200 a month and still earn $2,321,801 after 40 years. Thats a present value difference of $23,213. It will only cost you $23,213 over 40 years to drive a car with a car payment, a warranty, and minimal maintenance compared to buying a car with cash, costly repairs and reliability worries. Dealing with an unreliable car could cost people more in the long run.
Buying a car on payments can be done right, stop scaring people. Paying cash for everything isn't always the answer.......
P.S. Smart millionaires lease their expensive cars because the lump sum payment isn't worth giving up when they are making money on it to cover the lease payments.
EXAMPLE: You're rich and want to drive a Porsche 911 Carrera S. They cost roughly $125,000. So you have to decide:
Lease = $1,299/ Month for 36 months and $9,819 due at signing. BUT you keep the $115,181 ($125,000 - $9,819) and invest it earning 9% earns you roughly $865 a month. SO, your lease payment is now down to $434/Month. The present value of this lease if now $24,971. You keep the lump sum and pay $24,971 over 3 years to drive a brand new Porsche!
OR
Cash = You pay $125,000 cash for the Porsche, and you pay for most of the maintenance (lets say on average $100/month) for 36 months. Now the big killer comes in, depreciation! Ouch! On Kelly Blue Book a three year old Porsche with 36,000 miles on it goes for only $81,000. SO, by paying cash ,the same car now cost you $47,491.
Financed a car once and I’ll never do it again. Debt Interest is slavery. It’s not sexy driving a beater around town but boy do I have peace of mind looking at my bank account.
Then how do you save up 10,000.
while you working and paying for transportation to get to work. Then paying your normal bills.
Exactly
It’s sounds so easy to never have a car payment. But it’s really hard to filter out thru used cars that are reliable. And then used car prices are insane right now.
Well this is when having a humble mentality is key when is to buy a used car, some people want a used cheap car that looks good just like the BMW, Mercedes but those cars are not reliable at all, when you go to the used car you need to get a Honda or Toyota and sometimes Nissan and buy sedan, Camry civic.. believe me you can’t go wrong.
Dave Ramsey confuses correlation and causation again.
Well being able to responsibly leverage debt allowed me to drive a corvette in my 20s instead of my 50s when I’m old lol. So to each their own if you are responsible. 👍🏻
Kind of hard to invest money when your car breaks and you don’t have thousands of dollars to buy a car and then lose your job. This is the part that people get stuck on. You can invest and have a reliable car with a warranty and a payment. And before anyone says anything, no I don’t do payments either. But still, I understand the thought process in why a car payment might be a necessary evil.
Is there a way I can request my down payment back from a used vehicle financed yesterday, without penalty. The dealer has not registered or insured the car yet either.
Perfect advice! Pay out of pocket for a $30,000+ vehicle, instantly lose that money on a liability, and scam yourself out of the opportunity cost of financing that money instead! Genuis
I set out to purchase a slightly used Suburban in October 2016 and they were going for around $41,000 - $43,000 with 50k miles on them. During my search, I found a brand new year-end clearance Suburban for $46,000 similarly equipped. Paying an additional $5,000 for 50k fewer miles, which equates to just over 3 years of useful life, was a good investment according to my math so I bought the new one. THis was before I was into the debt free lifestyle and I financed 50% of it at 2.99% but have recently paid it off. I figure it should last me 8 more years and I will start saving / investing for a new vehicle soon. Its better to earn interest while saving than to pay interest while paying for your car.
Cash buyers pay 10-25% more for the same vehicle to offset the interest lost. In the end, you pay the same.
Finance, then ask the bank for the payoff. Close it with the bank in cash after the sell.
I generally agree but the car payment for 7 years vs investing for 30 is just an unfair comp. You have to use the same timeframe if you’re going to do that
There is a difference between a car "payment" and a car "loan/lease". Why buy houses then?
I'm not a big fan of this guy but I will agree with what he has to say about loans and owing on credit cards. Besides it being wasteful, its actually life changing being completely free of debt. My last debt experience I had my mortgage, a car loan, a solar panel loan, an HVAC loan and more simultaneously. I was miserable.
just take the 2k and buy yourself an early 00’s Toyota.
Some people do that and the didn't last especially with a lot of driving. I rather just pay more while having something that is dependaple.
Why not an American made vehicle?
@@memphistiger4647 Because they normally dont last as long or become money pits...those old Toyotas can run 300k miles easy generally.
Mark G .... so true on the mileage . My 2005 Camry has 245,000 miles and running fine and my 2002 Camry has 191,000 miles and running fine also. I keep the
Maintenance up on both. No car payments since purchasing both used with low mileage many yrs ago
You can get a E46 BMW 99-05, mine rides like a charm, perfect reliability, engines are bulletproof
If you can’t pay cash for whatever it is that you want to buy, you can’t afford it. So save your money and when you have enough to pay cash, buy it. Don’t live on other people’s money. Live on your own money. Don’t owe anybody anything.
Okay but if you’re still buying a car because you need one and get a low interest loan, I still don’t see the issue. It decidedly doesn’t mean you’re going to “keep a car payment the rest of your life”. Pay 20% down, get a 3 year loan on a used car if you can’t pay in full and have the security you aren’t going to break down on the side of the road. Then if you lose your job, you shouldn’t be upside down on the loan and you sell it. I don’t want to live my life on egg shells eating ramen noodles until I retire at 65 with my pile of money I never enjoyed. “Any virtue carried to excess is a vice.” That’s how I feel about this. You have to use your best judgement for your situation.
Nikki Dedmond I agree! Ever hear that saying when they bury you there’s not a a hole big enough to carry your belongings and money!😉
Dave is rich for a reason and you're not.
cedric fundunburks *you’re.
@@StellaPlayss 🖕🏾🖕🏾
cedric fundunburks lol. Also, I am 28. Guess what Dave was doing at 28? Filing for bankruptcy. Dave is really great for a financial foundation and he’s helped a lot of people including me, but it doesn’t mean that I agree with every single thing he says. I am a nurse practitioner doing home visits. My car has 110,000 miles on it. I have to have a reliable car. I’m busy paying off debt. My comment comes from the response to this particular struggle. I am fortunate to have a good income, could trade in my car, and could cash flow the rest for a decent car without much sacrifice at all if I paused my snowball. Two years ago when I worked as an RN still making decent money and above the median for my area, I wouldn’t have been able to do that without a year or more notice. What about people making average income and below average income? In my area, if you don’t have your own car, the only transportation you’re gonna be riding in is the struggle bus. Public transportation is practically nonexistent.
Like Dave says think long term. Stick to your goals and success will follow you!
But Dave also advocates the debt snowball over the debt avalanche, which is favoring short-term psychological gains over long-term financial gains.
rosen380 yes as it is tough to get started. No doubt it is great advice as he has helped so many!
@@michaelbenesch1725 Sure, I'm not aware of anyone saying he hasn't helped anyone.
What I'm suggesting is that it is possible that since not everyone is exactly the same, some people might be motivated by seeing small debts fall off while others might be more motivated watching their entire debt owed decrease faster.
In some cases, there is little or no difference, but in some cases it could mean saving thousands of dollars and being debt free months earlier.
Is it not possible for some one or some thing to be helpful and have it still possible to be more helpful? I think most people would agree that the March of Dimes is helpful-- but for every dollar they take in they spend about $0.25 on admin and fundraising. Can we also agree that if they could button things up and get that down to 15-20 cents on the dollar, that they could still be more helpful?