Do you think financial advisors like Dave Ramsey..etc give people good or bad car buying advice on car buying? (luxury, vehicle)
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I have a hard time with most of his advice because it sounds good, but the math seldom adds up. With cars, I've found that buying used, unless you have the ability to work on it, is just buying someone else's problems. I've bought used in the past and the life cycle cost as always higher than buying new because of repairs. Bought my truck new 16 years ago and the only "repairs" it's had are normal maintenance. Plan to give it to my son next year for college and replace it with another one that I hope to have just as long.
The big problem with his cash for everything is how to get from here to there, because in the interim you still need housing, transportation, etc. And every dollar you save is losing money on interest vs inflation.
Yeah, I'd LOVE to pay in cash but in reality unless you save as much as you can beyond housing, food, etc. you won't be able to do this. A used car, you SHOULD be able to pay cash upfront unless it is some late model repo or something like that. There are a good amount of used cars at around $3,000-4,000 so it's reasonable. Now yes, you can get someone else's problems with used cars as well as buying from Salvos, Savers, Goodwills and factory stores, BUT at least with used, now you can try and run a carfax on them.
I agree with Dave Ramsey although I rarely listen to him. I decided long before I ever heard of him to not finance cars and have never had a car loan. Have always had some savings and would just buy what I could afford. Cars have never been a status symbol for me and, when I was younger, women I dated didn't really seem to care what kind of car I drove. My investing started out as a savings account for my next car. That was about 28 years ago. That grew and grew because the vehicles tend to keep going and I would often keep them longer than most would. Always have bought used. My last car purchase was less than 5% of what started out as my car fund. Years ago, I used a portion of the fund to pay off the house, which was early. Based on my experience, if you pick the right vehicle, they can run and run for years with very few issues. I think financing is right for some people though. I sure appreciate the people who finance their vehicles and take good care of them because, when I go shopping for a used car, I find some really nice deals out there.
His advice is part of a total package. Everyone here seems to focus on only one part (car advice) and ignore that it makes sense only when taken together with the rest of it. If you're not up to your ears in debt, then his advice isn't for you.
That's absurd, you can use the banks money and pay zero or.9% and keep your money. How exactly does spending your bonus on a lease (of all things) with no return in the end, save you money? My last 2 car's were financed at 0%. That's called a win/win.
Most Americans finance a GM for 0% then after 4 years tries to trade in a car or sell used only to find out their car is worthless. The $30k financed at 0% is effectively a $5k car after 4 years. The only option to get the most is to trade it back for another worthless GM that loses value.
After all these trade-ins and financing you still have an iff car with car payments vs a high quality used Japanese car that retains value.
All new cars regardless of financed or purchase all take a huge depreciation hit on the 1st year. Which is why used cars win if you can find a great deal on slightly new.
$30k new domestic, after 4 years is worth ~$7k, continuous car payments and reliability issues.
$11k used Japanese, after 4 years is worth $9k+, no car payments and small wear and tear issues.
I've bought used Hondas, Toyotas, and Subarus and sold them for the same price that I've paid for even after putting on 20-30k mi on them with very little maintenance.
Just about all my well to do folks drive a Japanese car to work. Look at Jeff Bezos, he still drives a Honda Accord.
Most Americans finance a GM for 0% then after 4 years tries to trade in a car or sell used only to find out their car is worthless. The $30k financed at 0% is effectively a $5k car after 4 years. The only option to get the most is to trade it back for another worthless GM that loses value.
After all these trade-ins and financing you still have an iff car with car payments vs a high quality used Japanese car that retains value.
All new cars regardless of financed or purchase all take a huge depreciation hit on the 1st year. Which is why used cars win if you can find a great deal on slightly new.
$30k new domestic, after 4 years is worth ~$7k, continuous car payments and reliability issues.
$11k used Japanese, after 4 years is worth $9k+, no car payments and small wear and tear issues.
I've bought used Hondas, Toyotas, and Subarus and sold them for the same price that I've paid for even after putting on 20-30k mi on them with very little maintenance.
Just about all my well to do folks drive a Japanese car to work. Look at Jeff Bezos, he still drives a Honda Accord.
I better call the dealer I just bought a car from and tell them they overpaid for my trade!
2010 F150, bought new 30,900 sold 59K miles later for 21K. Threw in $880 bucks and drove out in a brand new 2015 Honda Accord coupe.
Warren Buffet drives an older Lincoln Town Car......guess we better tell him a used Japanese car would be better!
Location: San Ramon, Seattle, Anchorage, Reykjavik
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Quote:
Originally Posted by KittenSparkles
I think his target audience is people who coasted along, ended up with a lot of credit card debt, and are now trying to figure out how to dig themselves out of the hole. Being Christian probably helps too.
Location: San Ramon, Seattle, Anchorage, Reykjavik
2,254 posts, read 2,750,161 times
Reputation: 3203
Quote:
Originally Posted by jasperhobbs
$1500 -$3000 won't buy much of a used vehicle. Also probably a good reason they are for sale.
I wouldn't say that's always true if you buy right rather than the first car you find. I bought a used Volvo wagon with 145,000 for $2200 to haul dogs, wood, plants, etc in. 42,000 miles later I sold it for $2500 and didn't have a single repair bill. You have to pay attention. Lot's of good cars out there. Tend to be Toyotas, Hondas, Subarus, or Volvos with a few big 3 trucks as well.
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