No, You Don't Have To Be A Millionaire And Pay Cash To Buy A New Car

enzo1 · 08-21-2015, 08:27 AM

No, You Don't Have To Be A Millionaire And Pay Cash To Buy A New Car

ckelly78z · 08-21-2015, 10:45 AM

Sounds like this very opinionated woman has a hard on for Dave Ramsey. I absolutely, completely agree with Dave on this issue (and many other), about not foolishly buying a new car/furniture/wardrobe/house just because you think you deserve it, but can't afford it easily.

Dave can completely afford that new Corvette, and quite frankly, deserves it also.

scottmandue · 08-21-2015, 10:47 AM

But it helps...

McLovin · 08-21-2015, 11:44 AM

I generally agree with him, but I agree with the blogger that Ramsey overstates how inexpensive used cars are.

As the woman points out, Hondas, etc. don't depreciate 70% in 4 years.

If they did, yeah, it would be no-brainer financially foolish to not buy a 3-4 year old Honda instead of a new one.

Cars are a tremendous money drain for most people. IMO, more important than the "new v. used" and even "buy v. lease" questions is the question of how long you keep cars.

THAT's where it gets really expensive, and where significant money can be saved.

The way to minimize costs is to buy a quality car and keep it for 10-12 (or even longer) years, and maintain it well.

When you do that, your amortized "per year" cost goes way down.

If you must have a new (or relatively new) car every 2-4 years, it's going to be expensive, whether you buy or lease, or buy new v. used.

That's the biggest downside of leasing, it's a bit of a "trap" because it's easy and is highly pushed by dealerships (because it's the easiest way to get customers into new cars year after year). The upside is you're driving a brand new car every few years, the downside is you are paying a lot for that. Probably more than most people should, given their financial situation.

wdfifteen · wdfifteen's Garage

Quote:

Originally Posted by ckelly78z

Dave can completely afford that new Corvette, and quite frankly, deserves it also.

Why does he deserve it?

VincentVega · 08-21-2015, 12:17 PM

x2 mclovin

monthly/yearly cost is what it comes down to. Sometimes a lease can workout, but it usually doesnt. Nothing wrong with buying anything if you can afford it.

Quote:

Why does he deserve it?

that's funny

maybe because he's perfect?

Hugh R · 08-21-2015, 12:46 PM

Quote:

Originally Posted by wdfifteen

Why does he deserve it?

Uh, because he can afford it without using other people's money? Why do you "deserve" anything you own in your life?

cockerpunk · 02:42 PM

i agree with the lease, but financing a new car is a no brainier. at interest rates of below 2%, its free money. you'd be a fool to not finance at those rates. you literally are losing money by buying in cash at below 2% rates on a car loan.

on2wheels52 · on2wheels52's Garage

I know exactly how many car payments I've made in my life

Jim

daepp · 08-21-2015, 03:29 PM

He deserves because he's earned it.

The writer, btw, is an idiot. Mediocre at his craft and lousy on argument.

LeeH · 08-21-2015, 03:39 PM

The "woman" writer appears to be named, "Tom."

Yeah, Dave can adjust the numbers to make his point - like his article that shows how a few dollars per week can make today's young person a millionaire... assuming a 12% annual return for the next 30 years.

Many used cars are holding their values fairly well these days. When my wife wanted a Mazda CX-5 a while back, I went to look at the one used one for sale in Phoenix only to find it just sold. But the difference between the used one with 18K miles and a brand new one was only a couple of thousand dollars. My 2014 Mazda3 S Touring was offered at about $4000 below what it cost new. Ended up buying for $2000 less than that. Could have bought a brand new i Sport for the same money, but I wanted the bigger engine and toys that came on the S Touring model.

wildthing · 08-21-2015, 04:12 PM

It is called Personal Finance for a reason. There are general guidelines, but not everything applies to each person's situation.

onewhippedpuppy · 08-21-2015, 05:40 PM

Quote:

Originally Posted by daepp

He deserves because he's earned it.

The writer, btw, is an idiot. Mediocre at his craft and lousy on argument.

Yup. Blogs give every talentless hack a voice, and Jalopnik is full of them. Most of their articles appear to be written by high school students that still own the beater that mom and dad bought them for sweet sixteen. Case in point was one of their writers with zero track time stuffing a new V6 Camaro during a press day. Too much car I guess....

wdfifteen · wdfifteen's Garage

Quote:

Originally Posted by Hugh R

Why do you "deserve" anything you own in your life?

That was my question. Why?

cstreit · cstreit's Garage

This is ridiculous.

If you can finance a new car - you can pay CASH for a new car.

All it takes is saving. Remember saving? It's what people did before credit. If you wanted something you tucked money away until you could pay for it.

onewhippedpuppy · 08-21-2015, 06:06 PM

Quote:

Originally Posted by cstreit

This is ridiculous.

If you can finance a new car - you can pay CASH for a new car.

All it takes is saving. Remember saving? It's what people did before credit. If you wanted something you tucked money away until you could pay for it.

If more people followed that advice, as well as the advice of Ramsey, our society would be a much better place.

VincentVega · 08-21-2015, 06:38 PM

Quote:

If you can finance a new car - you can pay CASH for a new car.

when 1-2% loan rates are common why would you tie up $$ in a car?

onewhippedpuppy · 08-21-2015, 07:07 PM

Quote:

Originally Posted by VincentVega

when 1-2% loan rates are common why would you tie up $$ in a car?

Because you can quit contributing to your mutual fund. You can't quit making your car payment, house payment, credit card payment, etc. Getting laid off in 2014 was a HUGE wake up call for me. Plus, if having that money invested is that critical to your long term investment plans, maybe you should rethink your purchase.

$10k will buy a very decent reliable used car. Nobody NEEDS a new car.

VincentVega · 08-21-2015, 07:48 PM

Quote:

$10k will buy a very decent reliable used car. Nobody NEEDS a new car.

sure, but that has nothing to do with using credit as a tool to your advantage. Not for everyone I guess but statements saying any auto loan is bad just doesnt add up.

sc_rufctr · 08-21-2015, 08:01 PM

Nothing beats the convenience of a good quality new car. They just work.
For a single lady who can get a good finance deal (~0% interest) they're probably the best option but you need to keep the car for more than 8 years to make it worthwhile.

But if you can DIY then an ancient MB makes a lot more sense to me.

For me it's about cost per year. My current daily is 21 years old... I plan to keep it another two years and then it would owe me less than a $1,000 a year. (aside from normal running costs). That's cheap motoring.

I know a lady who bought an i30 Hyundai diesel. That car was nothing but trouble and after 3 years of ownership she traded it for a Corolla.
Turned out to be a very expensive car because she got next to nothing for it as a trade.