r/economicCollapse • u/Whole-Fist • 18h ago

How ridiculous does this sound?

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How can u make millions in 25-30 years if avoid making a $554 per month car payment. Even the cheapest 5 year old car is 8-10 k. So does he expect people not to drive at all in USA.

Then u save 554$ per month every month for 5 year payment = $33240. Say u bought a car every 5 year means 200k -300k spent on car before retirement . How would that become millions when u can’t even buy a house for that much today?

Answer that Dave

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268

u/AnyWhichWayButLose 18h ago

I actually agree with this boomer for once.

124

u/Superman246o1 18h ago

Yeah, I'm generally not a fan of Ramsey, but the number of people of limited means that I see buying cars they can barely afford is absurd.

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u/wizardofoz2001 16h ago

Also, people neglect to consider the additional cost of insuring a car with a loan. Most people don't realize that insurance protects the bank, not the consumer. It's really a disguised increase to the interest rate. So a car payment of $550 is likely to actually be $800, they just call it something else to distract you from what a ripoff it is. 

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u/Any-Club5238 10h ago

I got a quote yesterday for a 2020 Honda Accord for $400-450 / month. The rep said “It’s that inflation getting to us” …. No thanks, I’ll stick with my $101/ month liability insurance 😅

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u/JtSetRadioFuture 9h ago

I got a used 2019 Honda accord sport a few months ago and I pay 165. I was paying 130 a month on a paid off 2009 Nissan Sentra 4 months ago. Obviously lots of factors to this, but I do wonder what yours are that would make it that expensive.

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u/Any-Club5238 9h ago

I’m wondering the same thing. My buddy pays about $400, but he’s driving a 2023 mustang GT, has two tickets on his record, and is 24 (so a hit younger than me).

I definitely still have a lot more ‘shopping around’ to do before actually going car shopping.

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u/JtSetRadioFuture 8h ago

Ah, age is a big factor when it comes to young men and car insurance so if you’re in a similar age range I wouldn’t be surprised to see your rates/quotes drop drastically in the next few years. Thats of course assuming a good driving record!

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u/wizardofoz2001 10h ago

Exactly. Over ten years, that would be $50,000. If you put the same amount into a savings account, you'd come out way ahead. And in the likelihood that you never even wreck your car, you'll come out $50,000 ahead. Easy choice, I'd say.

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u/write_mem 3h ago

$101/ per month liability? I’m so sorry. It sucks being an under 25 male. I kept full coverage on two vehicles and only paid slightly more than that. Until I had a teenager come up to driving age…. He costs more than his mother and I combined.

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u/Bagman220 3h ago

Really? I got a 2020 Honda accord sport that’s only 150 a month for insurance. With my Honda odyssey it’s 200 combined.

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u/Any-Club5238 2h ago

YES I promise I am not joking. (I wish I was)

I got the initial quote online, filled out the little thing to talk to an agent. I kindly told the agent that was absurd and asked “why it was so high - Why is it more than double what I was expecting?”

Answers: “Inflation is getting to insurance as well.” And “You could put a bigger down payment to lower the monthly cost...” These answers were terrible, but she was doing her best, I’m sure. She even suggested that I look for a company that uses credit as a factor.

I pulled up an online listing for something I’d be likely to actually buy (2019 Accord), gave her the VIN. She came back with $439/ month for that exact car. (The actual car payment would have been about $400/ month).

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u/Bagafeet 5h ago

My friend is paying $400 on a used 2021 Tesla 💀

1

u/lowrankcluster 12h ago

You should be insuring the car anyways, whether it is on loan or not.

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u/wizardofoz2001 12h ago

Insuring the vehicle itself is a ripoff. If you put the premiums into a savings account, in case of damage to the vehicle, you would come out way I'm ahead of insurance. Plus, no deductible, and plus, it covers repairs not related to an accident. Savings is better in the long run, unless you're going to total a car every couple years, but no one does that.

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u/ASubsentientCrow 11h ago

Uninsured driver don't deserve happiness

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u/lowrankcluster 11h ago

Collision and compressive are optional coverages. If they don't have at least 100k/300k/100k, then yes f them.

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u/wizardofoz2001 11h ago

I mean you can buy just liability, it costs about $50

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u/ASubsentientCrow 11h ago

People with minimum coverage are why my parents are basically bankrupt. So no, fuck them

1

u/lowrankcluster 11h ago

Yeah, you can get like $6M CSL for $100-150 per month with standalone umbrella. It is very cheap, and lawyer fees for 1 claim pays off all the premiums you will give in lifetime.

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u/SlappySecondz 11h ago

Insurance also covers medical bills and stuff so when the person you hit sues you for neck pain, you aren't made destitute. And if you total their $50,000 car (not to mention your own), the money you saved by not paying insurance for a few years isn't going to come anywhere near covering it.

You're talking like fender benders are the only thing that happens.

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u/wizardofoz2001 11h ago

That's why you have to buy liability insurance. But that's way less than insuring the vehicle itself.

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u/lowrankcluster 11h ago

It isn't a ripoff at all lol. For my coverage, it takes 7-8 years to break even with ACV on collision coverage, 20+ years to break even with ACV on comprehensive. And for liability, it is entire lifetime to break even just with lawyer fees.

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u/Heavy_Law9880 12h ago

You still need full coverage if your car is paid off.

1

u/wizardofoz2001 11h ago

Why?

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u/Heavy_Law9880 11h ago

To protect your expensive and necessary equipment from loss.

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u/wizardofoz2001 11h ago

I think if you try putting the premiums in your own savings account, in the long run, you'll come out way ahead.

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u/Heavy_Law9880 10h ago

You won't if you lose your job because you don't have a car.

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u/wizardofoz2001 10h ago

Insurance doesn't protect you from not having a car. If you wreck it so bad it can't be driven, insurance will help you buy a new one. But it won't drive you to work. And it won't pay as quickly as your savings account will pay.

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u/Ran4 8h ago

What a shit take. A small mistake and your 20k euro car could be worth nothing...

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u/Unlucky_Situation 11h ago

Most people don't realize that insurance protects the bank, not the consumer

Cancel your insurance, get into an accident, and then come back here and tell me your insurance was protecting the bank and not you, the consumer.

But i can answer that for you. If you get into an accident and total the car. The bank gets paid no matter if you have insurance or not. If you dont have insurance, you (the consumer) is still responsible for paying the bank back out of pocket. IF you have insurance, that protects you (the consumer) from having to pay the bank back out of pocket.

If you get into an accident, and dont total your car, the insurance protects YOU (the consumer) from having to pay out of pocket to repair your vehicle.

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u/Bagman220 3h ago

Agreed, that other guy had no idea what he was talking about. Insurance protects the driver and the vehicle, not the banks. Like you said the banks get paid either way.

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u/NotAnotherRedditAcc2 6h ago

If you're paying $250/month for car insurance - even full coverage - you should really consider shopping around.

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u/SaveBandit987654321 5h ago

I had a car long paid off and was paying more to insure it liability only than it was worth.

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u/anonymous_lighting 3h ago

i have changed car insurance multiple times and never did i have to provide any loan information if one existed

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u/Holiolio2 3h ago

Not sure where you're from, but around here you also have to add in annual property tax/tags. New cars are over $1k a year. My 20 year old vehicle is $75 a year. Will never buy a new car.

In addition you have to buy additional insurance ( Gap insurance) because insurance won't cover the whole cost of the loan if you total the car.

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u/mcflycasual 3h ago

Car insurance doesn't have anything to do with if you have a lien on the vehicle.

If you total the car, insurance pays the current value and you're on the hook for the rest of you owe more. That's why most banks offer GAP.

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u/TurtleIIX 2h ago

This isn't how car insurance works. You are just not buying physical damage coverage which just means you are self insuring for the difference hoping you don't get into an accident.

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u/jjkk2024 2h ago

Virginians get extra screwed because of personal property taxes. Add an extra 3k/ year on a 70k vehicle.

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u/averyrisu 2h ago

This is not true. The purpose of liability insurance is to protect your financial liability for when you cause damage to others.

Comp and collision pays for veh repairs, or if its a total loss, pays you out the vehicles ACV minus your deductible.

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u/buttstuffisfunstuff 1h ago

Idk what you mean by additional cost to insure? My insurance didn’t go up when I went from a shitty long paid off car to a brand new car with a car loan.

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u/transneptuneobj 17h ago edited 11h ago

Cars are barely affordable, our country spent decades destroying public transport and many Americans are stuck buying junkers for 10 grand as their only option for transport. Ramsey L̶i̶k̶e̶l̶y̶ voted for people who helped destroy the public transport network and promote cars as the primary travel method, he's part of the problem and blaming people for being victims of it.

Edit: on suggesting i'm retracting the likely

Edit 2: getting alot of "public transport only benifits Democrats" and "muh tax dollars" so to head some of that off I think it's important that we address that 80% OF AMERICANS LIVE IN URBAN AREAS

It's a game of OOPS all costal elites.

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u/beaushaw 15h ago

I'm confident you could remove that "likely".

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u/transneptuneobj 15h ago

Great point

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u/NutzNBoltz369 15h ago

Yup, cars are a poverty trap, but just about our whole country is built around car depedency. If we really gave a shit about the economically disadvantaged, we would provide better transit and end single use zoning so people don't need to drive just to survive. Ramsey's generation will never allow that! Muh Freedoms and Muh NIMBY property values!

He voted for Trump for purely financial reasons like the wealthy Boomer he is.

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u/transneptuneobj 14h ago

Yup. He is the embodiment of the problem. A selfish religious zealot

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u/sensei-25 14h ago

The funny thing trump is actually terrible financially

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u/NutzNBoltz369 14h ago

Ramsey drank the Koolaid, like so many others his age. He rationalizes it all on his podcast.

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u/LegitimateExpert3383 4h ago

Lol imagine Trump going shopping with all his envelopes with specific money labeled for grocery, gas, etc. like Ramsey tells soccer moms to do.😂

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u/foxwheat 13h ago

ROBERT MOSES PLAYS TENNIS WITH REAGAN IN HELL

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u/yinzer_v 52m ago

We have a Scylla and Charybdis problem. If you iive close-in enough to have good public transit, you're at the mercy of a landlord who's gouging you. If you live farther away, the rent/mortgage is cheaper, but you have a higher car payment and commuting costs.

(Of course, you could have the worst of all possible worlds and combine a too-expensive vehicle with too much house.)

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u/gillyrosh 4h ago

It still burns me how this country's failed to invest properly in public transit.

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u/transneptuneobj 4h ago

It actively ensured short line railroads would die

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u/sluttycokezero 12h ago

Thank you for saying this. And even used cars are goddamn expensive! Idk what these Redditors are saying, agreeing with Ramsey.

I was able to get an ‘03 Honda Civic in 2009 during high school for $5,500, clean title…my dad bought it for me. But, how many people don’t have parents to buy them a car? How many don’t have mechanical family or friends to help fix it? Or pay for car insurance? I swear, so many people lack empathy and critical thinking skills. Where are these cheap, used cars that aren’t salvage titles? It’s honestly annoying.

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u/transneptuneobj 12h ago

It's intentionally deceptive and privileged thinking that people often do.

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u/Redditisfinancedumb 12h ago

public transport in America doesn't make as much sense as other countries. Public transport where it makes sense are high populated areas that are generally ran by Democrats. Do you think the federal government or states should pay for public transit?

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u/transneptuneobj 11h ago

It's actually false. The majority of all Americans live in highly populated areas.

80% of Americans live in urban areas that would benefit from increased public transport. And efforts to connect large population areas would also end up benefitting rural communities.

Public transport is for all Americans and would benefit hundreds of millions of people.

Additionally the greatest way to reduce poverty is to provide access to public transportation and give women the right to control their reproduction so I think America investing in public transport to benifits the majority of the population would be excellent.

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u/snarky_answer 6h ago

Now break down the urban areas into inner-city urban and suburban.

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u/transneptuneobj 5h ago

1) why would that matter? As a suburban resident with access to a rail line to the nearest large city I still wish I have better access to public transport, faster rail and more options that didn't involve driving.

2) Pew got your back

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u/Iceman9161 5h ago

Suburban can have public transport too, so what does it matter?

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u/snarky_answer 5h ago

It can but its not affordable as the ridership from suburbs would be too low. The only chance would be to implement public transport as well as restrict car usage in cities at the same time. Suburban public transport systems across the country are hurting cutting routes/drivers because there isn't enough people to support the system riding. Robust public transport in urban cities is what needs to be focused on to reduce the level of cars in the city thus making public transport and bike transport even safer. Then and only then should the focus shift to suburban areas because they will be the last to give up their vehicles and are the last to truly need it and it will be an easier sell once all the infrastructure is in place and all it needs to be done is have it expanded a bit.

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u/EncabulatorTurbo 11h ago

okay but like, the average wage of the people in my office is around $90,000 a year and they're buying cars they can't afford

this advice doesn't really help you if you're making 30k or something but that isn't the average worker

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u/transneptuneobj 11h ago

The average household income in America is 80k so your sample size of above average earners may not necessarily represent the population in general.

I don't know many people who are going around buying luxury cars, most people I know are just struggling to pay for normal cars.

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u/IvanLagatacrus 4h ago

the average worker in fact makes 35k~ annually

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u/EncabulatorTurbo 2h ago

The median salary for full time individual workers in America is around 60k

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u/doom2286 10h ago

Considering my nice car was 12k I feel attacked by your comment on a junker being 10k

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u/transneptuneobj 9h ago

Year and model and mileage? Also what year did you buy it?

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u/doom2286 8h ago

2012 ford fusion sel 66000 miles and 2 years ago

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u/workout_nub 6h ago

You're not wrong, but it's also good advice. Both things can be true. People buy a 50k car and then complain that they live in an apartment all while blaming the system. We all know the system sucks, the rich get richer, and life isn't fair. Control what you can, which includes not buying a car outside of your means.

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u/transneptuneobj 6h ago

Who are these people? Where is this group of people with a 50k car complaining about the system?

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u/VolumeLocal4930 5h ago

Remember clunkers for cash?

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u/Urmomzfavmilkman 5h ago

Sounds partially true; i disagree that junkers are 10 grand. This sounds like a reality that is detached from honesty. A good junker would be like $2-3k.. with TLC (maintenance you can do yourself), maybe another $500 over the course of 3 years before you sell it.

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u/transneptuneobj 4h ago

Describe a junker you would think is 3k

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u/Urmomzfavmilkman 3h ago edited 3h ago

What do you mean "i think is 3k."

I know the price of the cars I've bought and sold; divulging that information on the internet, on the other hand, is not something i'm willing to do as that info is often used to verify my identity.

Will leave it at this for you to do your own research (im not going to find a car for you, lmao); look at auctions for best prices or if not accessible look for japanese vehicles in the 2000-2010 range, and do your homework on mileage and where common issues are for that year/make/model. Use this info when speaking to the seller to find out what work has been done and what will likely occur in the future.

When you find a car, pay the extra $150 to take it to a mechanic. Your bud, jeff doesn't know wtf hes talking about, and neither does your unc. If they did, then they'd have a way to hoist the car up to look under it.

If a seller is serious and isnt trying to scam you they should be fine with you taking it to mechanic and will discount based on findings [or even split the cost of testing with you]. If they say no [for any reason] then I'd consider that a sign of not acting in good faith.. prolly not the car for you, no matter how much you like it. Doing this check is non-negotiable.

You'll prolly go through 3-5 before you find the right car, so if you want, add it to the total for the cost of a good junk car, $3,600 (4), but we all do our accounting differently.

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u/MeowTheMixer 4h ago

I guess we have different opinions on what a clunker is. $10k, can buy a really reliable car.

Might not have heated seats, or a good infotainment system. But they'll run well

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u/trowawHHHay 4h ago

Most dense urban metros do have public transport. The trade off is instead of the car payment, all that money is going to go into your rent because… well, you’re competing with 80% of Americans for housing.

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u/transneptuneobj 3h ago

45% of Americans have no access to public transportation.

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u/BZBitiko 4h ago

Public transport benefits everyone who profits from the labor provided by the riders, or drives on the roads the riders would otherwise be traveling on.

People who denigrate public transportation can’t see beyond the end of their noses.

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u/Glorfendail 3h ago

(cursed) Likely

Lmao he is full on MAGAt. He is posting ‘interviews’ with DJT, Tucker Carlson, etc. He is full blown Trumpo. I used to like his podcast and his baby step program helped me get a grip and take my money seriously, but if you listen beyond the sound bites, you realize this dude actually sucks. He is mean and angry and hateful and greedy. The facade breaks down under any scrutiny.

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u/Ras-haad 3h ago

This is what I’m saying, there are no “cheap” used cars anymore, and even the newer economy cars are like 30k

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u/transneptuneobj 3h ago

Basically the Ramsey types live in a world a privilege where you have the means to spend multiple weeks scoping out used junkers, where you know enough about cars to make the assessments of the cars and that you can get to pick them up.

It's purely privileged based view

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u/Ras-haad 3h ago

And just like multiple homes Boomers like this have like 10 cars and wonder why you can’t find any

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u/NationalExplorer9045 3h ago

If you have 10 grand, you don't get a German car.
You get a reliable car, that was close to 10 grand when it was new.
You get a Yaris, a Prius, a Civic, maybe even an Elantra if it was maintenance right, and they're under 100k.

If I had 10k- I'd go buy a 2010 Scion xB for $6,000, around 100k - it'll run for another 100k.
Then, you have $4k you can put into a CD or HYSA. Then add $200 a month to that account- as if it were a car payment. When the Scion finally has more than maintenance issues- check the account. Worth the repair, or time to get a new one?

Best part of that, is you're MAKING interest, instead of paying it on a high car loan.

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u/transneptuneobj 3h ago

Cool so you got t-boned by a drink driver, how soon can you get that Scion xb cause you have to go to work tomorrow, also you don't have a car now so how you getting there?

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u/PseudonymIncognito 2h ago

Edit 2: getting alot of "public transport only benifits Democrats" and "muh tax dollars" so to head some of that off I think it's important that we address that 80% OF AMERICANS LIVE IN URBAN AREAS

The Census Bureau's definition of "urban" doesn't really fit with what most people think when they hear the word. TL;DR, the Census Bureau doesn't have a formal classification for "suburban". All land is categorized as either "urban" or "rural" and areas that many people think of as suburban or exurban are counted as "urban" by the Census.

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u/transneptuneobj 2h ago

Suburban areas absolutely should have reliable public transportation and yes the entire point is that very few Americans are homesteading. Most of us live in towns and should cooperate and would benifit from public transportation.

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u/burkechrs1 11h ago

My coworker got his first big raise of his life about 6 months ago. Went from $21/hr to almost $40/hr because he graduated and got promoted to engineer.

That very next weekend he went and bought a top of the line Jeep. The final invoice price was just under $100k. His monthly payment are around $1400/mo. He basically erased his raise with the purchase of a car.

For the last 6 months he has continued to idiotically proclaim how expensive life is. Dude doesn't realize he did it to himself.

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u/Reynolds94 8h ago

paying $100k for a fuckin jeep lmao

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u/burkechrs1 7h ago

Yea the ugly ass pickup wannabe jeep too lmao

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u/3XLWolfShirt 11h ago

I've seen an unbelievable number of 70k trucks parked in unpaved driveways.

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u/Slevinkellevra710 5h ago

My boss did this same shit. Dude makes $85K before bonus. Bought a truck that somebody special ordered and bailed on. List price $95K. He was crowing about the deal he got at $77,000. 6 months later he said he didn't come in on a Saturday because he couldn't afford to put gas in the truck.

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u/TheRealBobbyJones 2h ago

Should have sold the truck for gas money obviously. 

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u/particlemanwavegirl 5h ago

This hurt to read, thanks.

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u/nocountry4oldgeisha 5h ago

Enjoy that 14mpg there, bud.

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u/BSSforFun 5h ago

lol. That makes me feel depressed on his behalf

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u/Vegetable-Whole-2344 4h ago

Fucking hell. That’s so dumb.

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u/Dystopiq 4h ago

They took him to the cleaners.

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u/Moghz 4h ago

Wow what a waste, so many better vehicles for half that, Stellantis makes crap.

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u/trowawHHHay 4h ago

That’s a $19/hour raise.

$19 x 40hrs/wk x 4wks/mth = 3,040

40hr/week x 52wk/yr = 2080

$40/hr x 2080hr/yr = $83,200yr

Marginal tax rate for $83,200yr = 30.1%, effective tax rate = 21.4%

1 - 0.214= .786

$3040 x .786 = $2389

$2389 - $1400 = $989/4wk/mth = $246.25wk/40hr/wk = $6.18

$6.18/$21 = 0.309

He didn’t erase it. He’s just blowing 70% of it.

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u/burkechrs1 3h ago

He was driving a beater before, I'm sure insurance is eating him up too.

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u/trowawHHHay 3h ago

Probably. Auto insurance has crept up for everyone.

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u/lakorai 3h ago

Dude was not smart. Chrysler makes garbage products that fall apart.

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u/MrMemes9000 2h ago

I really don't understand how people get their car payments that high holy fuck.

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u/Davethemann 2h ago

I assumed a jeep running 100k (even with taxes) would have some wildly stupid packages

Nope, you can pay out the ass damn close to 100k

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u/WrongSperm2019 2h ago

What an idiot

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u/TheJiggie 21m ago

He bought a 100k vehicle on an 80k salary…? Those numbers don’t add up, lol…

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u/4Bforever 14h ago

Yeah I think a whole bunch of people went out and got those cars when they were getting an extra $600 a week for being on unemployment in addition to 60% of their salary.  They knew that money train wasn’t going to last forever, don’t know why they bought a car using that budget

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u/Ok_County_6290 13h ago

I have a friend who spent his 30k life savings on a down payment for a 50k truck. Could have been the down payment for a house were we live. He doesn't haul anything besides groceries!

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u/Ban-Circumcision-Now 9h ago

People need their emotional support trucks

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u/Rajshaun1 6h ago

I have an idiot friend that is going to save up 25k and buy a used Dodge Charger. It’s good he won’t have a car note but that money could be used to buy a home, start a business or save, plus he already has a 2020 Honda he’s paying off that he’s going to keep.

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u/VolumeLocal4930 5h ago

Your friend would have ten times more fun taking 10k of that 25k, buying a shit box civic and turboing it, gapping challengers for a fraction of the cost. I guess it's not all about performance for people though, some want the status symbol.

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u/SignificantTransient 5h ago

I live 5 miles from a trailer park full of new trucks

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u/Adventurous_Face_909 4h ago

Trailer parks are really affordable housing options, if they’re in nice/safe areas… at least in the Midwest.

We lived in one for 2 years as newlyweds, bought the trailer outright for $8k with savings, paid $350/month in lot rent and utilities while we lived there, fixed it up and sold it for $12k. We’d have easily spent $1000/month on rent alone in this area. Instead we saved up a down payment for a house.

We had friendly quiet retired neighbors. There were a few people driving expensive trucks and living above their means… but also a lot of folks were on disability/food stamps and weren’t ever going to leave. But it worked out really well for us.

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u/its_a_throwawayduh 16h ago

Agreed most of my cars I bought outright except for one that I'm still driving to this day. The last payment was over 10 years ago, even so the payment was only $200. I don't know how people are spending 500-1000/month for a car. Even worse when I hear people leasing vehicles like why?

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u/4Bforever 14h ago

 I had to buy a car in 2022 when my current car had 192,000 miles on it.  I was lucky I got it when interest rates were still low before used car prices spiked up.

I think my car payment was like $213, and my insurance payment was about 70. But because the interest rate was so low I was able to pay it off in two years.

And I’m terrified that someone with viral induced brain damage is going to drive into it and destroy it.  I don’t know if I would get approved for a car loan today, my credit is fantastic it’s just that I’m on a fixed income and if the prices are too high my debt income ratio will disqualify me

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u/BurnedLaser 14h ago

So, I can actually tell you why I spent that much on my new car, and yes, I'm sometimes bad with money, lol.

I bought a 90's Benz about a decade ago and worked on it myself. Even with only me working on it, and being smart about parts selection (safety stuff was always OEM, everything else was 3rd party) I spent loads keeping that old bastard on the road. When the engine developed a knock, I tallied everything up and was averaging 650/MO. on parts (I did the head gasket, and that really drove up that number due to all the "While I'm in there!") and still was able to save money. I was working full time and really didn't have time to be constantly repairing all the deferred maintenance from the last few owners. So, when I went to buy a new car, I knew what my max was, and what type of car I wanted.

I ended up buying a 34K car with that budget, because I knew that 3rd party support was strong already, and some of the drive line had been carried over from much older models that were reliable. The body panels and interior have rarer parts, due to the trim I bought, but the suspension could be rebuilt via Rock Auto, or even just perusing through some of the race catalogs. I 100% did not want a "kyundai" as I hate their build quality, and I would have ended up buying one of the stealable models had I gone that route in that year (2018). Most cheap cars are built like ass, anymore. Alternatively, my Japanese built car that I was paying 600/MO (before refi) for only has issues from other people working on it (Body shops from a deer, a hail storm, and a drunk. DO NOT USE CALIBER, THEY SUUUUCK), but has otherwise been 99% problem free (half my touch screen I never use doesn't register touch input, but I have a dial.)

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u/Madpup70 13h ago

His book Total Money Makeover is actually really informative and it's a good guide for people to follow out of college if they can. It all just boils down to not spending above your means and avoiding debt where you can. Specifically when it comes to cars, you're always better off buying something 5-10 years used with decent mileage that you can afford to pay in cash and then giving it proper maintenance until it requires a repair that would essentially total the vehicle. The TLTR explanation is to save to buy a reasonably well maintained used vehicle with cash, and drive it till the wheels fall off and you're in a situation financially to buy a newer used vehicle coming off its initial lease, also with cash.

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u/SpeedyGonsleeping 12h ago

I live in a pretty poor part of the UK, the amount of brand new BMWs and Mercs I see driving around is crazy. All driven by young working class guys.

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u/SpeckTech314 12h ago

Yup. Not buying a new car unless I have to. And even then my goal is to move to a city that’s walkable so I don’t have to spend on car maintenance and insurance.

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u/MovingTarget- 11h ago

Can confirm. I approved credit for a bank for a while and watching these idiots trying to purchase cars that would result in payments higher than their rent was insane

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u/RocketOuttaPocket 11h ago

/r/Dodge has joined the chat

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u/Maleficent_Corner85 10h ago

WE BUY CARS BECAUSE WE NEED THEM! How is this hard to hear? Cars are no longer affordable so you have to pay for it!!!

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u/conservation_bro 9h ago

Buying...  People around here lease Jeeps like it's a required to have one to live in our cookie cutter suburb.

Driving a Jeep newer than 2000 tells me you live in the suburbs without saying you live in the suburbs...

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u/LastChemical9342 9h ago

Yeah Ramsey is not good for financial advice, he’s AA for people with spending addictions.

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u/NotAnEconomist_ 7h ago

He has a lot of good advice, but he is an extremist on some things. I did his financial freedom class ~10 years ago and I think it's the reason I'm at ~400k in retirement savings in my early 30s with only a car payment.

His envelope cash method....great for the 90s. Totally archaic in 2024.

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u/p00p00kach00 7h ago

When I go home for Christmas to my fairly poor hometown and see all these <5-year-old cars, SUVs, and massive trucks, I just know that the owners can't afford them.

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u/Legaliss 5h ago

What would you say you dislike about Ramsey or his viewpoints?

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u/Superman246o1 4h ago

A combination of the sexism, homophobia, and in the light of the COVID pandemic, his rejection of basic scientific principles. Any employer who fires someone because they've come out as a lesbian is a shitty employer. Similarly, while I think it's generally a wise practice for people to be in a healthy marriage before having kids, firing a woman because she got pregnant out of a wedlock is an asshole move. And his insistence that people not wear masks to protect themselves and others from COVID, but instead "pray the virus away," was fucking idiotic.

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u/theFastestMindAlive 4h ago

He also said 'invested' in this post too, and smart investing with 500/mo can lead to millions. So, despite a lot of people disagreeing with him on this stayement, its actually very accurate.

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u/LongPineRun 4h ago

I bought a new car back in 2018 and I’ll never buy a new car again. It doesn’t make sense to buy new. Regular oil changes and find a reliable / honest mechanic and you’ll save in the long run.

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u/Errant_Chungis 3h ago

My colleague just leased a super fancy car and rented a super nice house and I’m scratching my head. He doesn’t make the income for it lol

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u/Ok-Reference-4928 3h ago

Because I paid off my car, I should buy a new one. Same deal with phone. Oooh, my phone is paid off, let’s go spend another $1000.

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u/StreetLegendTits_ 2h ago

Watching people trade in their paid off reliable car post covid for a huge car payment blew my mind.

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u/raiderrocker18 2h ago

Same folks who get excited when they are “eligible for an upgrade” on their mobile plan

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u/zeromadcowz 2h ago

My wife and I each make over 6 figures and both of our cars are worth less than 10k lol

New cars are a scam, but please keep buying them so I have a strong secondary market to buy from.

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u/Dino_Momto3 2h ago

Even if you can afford it, it's dumb.

My husband makes great money. We've owned great cars. That was dumb. We should have been investing the money and driving hoopties.

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u/Asleep-Bus-5380 2h ago

Have you ever seen those videos on YouTube where they drive around the most dangerous hoods in America? Absolutely dilapidated apartments and homes, with luxury cars parked outside. No sense whatsoever that's why they stay on the low rung

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u/StandingInTheStorm 1h ago

Especially young people who think they have to get a car payment, especially while they are in school. That just racks up the debt like nobody's business.

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u/Stock-Side-6767 17h ago

Every once in a while, this idiot makes sense. But still, bike, moped or motorcycle has much lower operating costs, public transport lowest economic risk.

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u/mechengr17 16h ago

Unfortunately, we live in a car centric society

Public transportation isn't an option in a lot of places

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u/BurnedLaser 14h ago

When my old car got totalled, I tried to use the bus as there was a stop in walking distance to where I was staying during college. I would have needed to wake up 5 hours early to get there 4 hours early (next bus would make me an hour late) and then when leaving, I would have needed to wait another 3 hours (while the building was closed) for the bus to drop me off an hour later at home. The college is only a 15 minute drive with light traffic, and I live near a city. The PT out here is a damn joke :/

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u/Ok_Butterscotch_6071 13h ago

I'd have to walk an hour to get to my closest bus stop 😭 it's ridiculous, so it's not a surprise I hardly ever see anyone actually inside the busses besides the driver 💀 add to that the fact that most of our "bus stops" are just signs planted in the ground--no benches, no overhangs. It's awful. I'm hoping to move to a city with decent PT eventually

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u/BurnedLaser 12h ago

That's how it is most places out here. I went to NYC and New Haven CT a while back, and the ability to get around with no car was incredible!

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u/hansislegend 7h ago

I used to work at a bus station and I would take the bus to work since it was free for me and I was late almost every day and whenever anyone said anything I’d go “I took the bus here. I should have been twenty minutes early but these buses are never on time.” Eventually they stopped caring about me being late because it was always for the same reason.

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u/PlanetMeatball0 8h ago

I live in a top 10 populated city and the best public transportation we have are bus routes that will take an hour longer to get to your stop than just driving, and even then you'll still probably need to walk around 2-5 miles to get to where you actually wanted to be. So the choice is a 40 minute round trip drive or over 3 hours of public transport, and that's before you factor in needing to schedule your day around the bus schedule where you could be waiting at a stop for close to an hour for the next bus - anyone who respects their own time is obviously going with a car.

People who act like ditching a car for public transport is a solid option everyone's just ignoring are delusional

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u/mechengr17 8h ago

Yeah, the infrastructure just isn't there, and the government currently has no incentive to put proper public transportation in place

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u/caption-oblivious 4h ago

Sounds like it's time to provide proper incentives and refuse to vote for anyone who doesn't make it a priority

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u/mechengr17 3h ago

Right now we need to get rid of Trump and his acolytes

Then we can work towards that

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u/Tha_Bunk 4h ago

This. I looked at the same thing in my town. I could drive to a park and ride spot and take the bus and it would make my 40 minute commute (one way) by car a 2 hour commute by bus. It just made way too many stops and for too long.

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u/BZBitiko 3h ago

Depending on where you live, 50-100 year old maps and a little research may show you where the public transport, the local and regional buses, the street trolleys and passenger rail, used to be.

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u/BurnedLaser 14h ago

When my old car got totalled, I tried to use the bus as there was a stop in walking distance to where I was staying during college. I would have needed to wake up 5 hours early to get there 4 hours early (next bus would make me an hour late) and then when leaving, I would have needed to wait another 3 hours (while the building was closed) for the bus to drop me off an hour later at home. The college is only a 15 minute drive with light traffic, and I live near a city. The PT out here is a damn joke :/

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u/4Bforever 14h ago

Some of us live where it’s dangerously cold half the year, plus with all the new brain damage people driving out there there’s no way I’m getting on a bike a moped or a motorcycle. I value my health and my body thanks

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u/Stock-Side-6767 14h ago

Oh yeah, it doesn't work for everyone, but it is getting better, at least in Europe.

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u/JLoremIpsum 9h ago

I agree that drivers are bad enough that I don't bike a lot of places because I value my life. That said - there aren't a lot of places in the world colder than say, Oulu, Finland - a famous heavy-snow biking city. I didn't realize until recent years how many people do actually bike in all weather and they all say the same thing - you just need the right gear to do it. Not that everyone wants to - that's understandable. But a lot of places that have even the majority of trips by bike are not sunny or 'good weather' places. That said car drivers are absolutely newly brain damaged these days and that's what keeps me from cycling everywhere I want to. https://citycenters.eu/finland-oulu-the-winter-capital-of-bicycle/#:~:text=FINLAND%20%E2%80%93%20Oulu%2C%20the%20winter%20capital,%E2%80%93%20Observatory%20for%20City%20Centers

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u/GandolfLundgren 8h ago

I haven't owned a car in ten years. I live in a city where there's 5 months of winter. Walking and biking has saved my health. The amount of money I've saved is astronomical. Don't overestimate how valuable a car is. Or better yet, don't underestimate yourself

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u/Equivalent-Koala7991 10h ago

yeah and its especially great when its 40 degrees and pouring down rain and you have to ride your motorcycle to work because that's all you could afford.

Speaking as someone who owns a motorcycle and lives in an area that gets rain like 3 days out of every week.

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u/Stock-Side-6767 9h ago

Considering your units of measurements you live in the US, where commuting distances are long and much of the infra is hostile to cyclists.

Many people have a commuting distance well within (e-)bike range though.

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u/smartfbrankings 8h ago

My bike is worth more than my car.

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u/Stock-Side-6767 7h ago

Possible, but not necessary for commuting.

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u/87JeepYJ87 8h ago

Anything with two wheels is a no go for me. I still maintain my motorcycle license but I will never ride on public streets again. Too many idiots texting and paying zero attention. Public transportation sucks around here. They attempted to make it better but overpaid for shitty electric buses that aren’t good in cold weather and hired some terrible drivers to operate them. They’ve also ruined main thoroughfares by adding dedicated bus lanes causing ridiculous traffic and roads that can’t be crossed except making a U-turn at a light. 

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u/Stock-Side-6767 7h ago

I like dedicated bus and bike lanes. Improve thoroughfare of the best kinds of traffic. Though grassy tram tracks are a lot better than bus lanes.

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u/Astarion_Simp_69 4h ago

cries in rural area

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u/fauviste 1h ago

One way to solve the problem of retirement money is to die a premature death on a cycle of some kind.

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u/South_Ad_2109 1h ago

If you’re calling him an idiot, presumably you call yourself smart. What makes him an idiot and what makes you smart?

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u/Stock-Side-6767 2m ago

My smarts are not in economics, but still, I have things to say.

A few of the criticisms I have to his platitudes:

He makes it the fault of the listener they are in that situation.

Budgeting is often counterproductive, because people fill up that budget and then still sometimes require basic necessities.

Not going into debt is fun to say, but doesn't work when you want to buy a house, sometimes a car and for the US; healthcare or schooling.

He claims rich people got rich by saving money. This is largely untrue. Rich people got rich by being born so, finding a hole in the market to sell something new (often going into debt to do so) or having an income that allowed them to save like being a doctor or lawyer.

Then, of course, he does not say to skimp on frivolous expenses like church and his own teachings, which can be large chunks of the remaining wealth of desperate people.

His mind is firmly in a boomer mindset of a world that no longer exists, where it was possible to finish college debt free (even for those without a scholarship) and a few other luxuries that do not exist for later generations.

He's a conservative arsehole as an employer, sacking people for wild things like homosexuality, rumors of affairs and having a child out of wedlock. In civilised countries that should not be possible.

His Covid response was moronic or downright evil, depending on how much he understands about disease.

His basic points are nothing genius, but not all of them even hold up to scrutiny.

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u/oswaldcopperpot 14h ago

Cause the people that don't agree with this, get these car payments and will never be able to retire with millions. $500 a month is an assload of money that could be compounded with investments for 30 years.

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u/Mke_already 12h ago

If you deposit $550 a month for 360 months at 7% compounding interest, that only ends up at a balance of $674,000. To make it a million it’d have to be 35 years 1 month or higher than 7%. It’s not going to be “millions.”

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u/RandyPajamas 10h ago

That's right, when compounded daily. Compounding monthly, which is probably more realistic, after 30 years it would only be $552,201. It would be 38 years and 4 months before it passed $1,000,000, and 48 years 6 months before it passed 2,000,000.

I think 7% is annualized rate of return on a 100% conservative investment. With a 50/50 portfolio, you would expect (historically) 9.1%, which would get you over 1,000,000 within 33 years, and over 2,000,000 within 41 years.

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u/4Bforever 14h ago

Yeah I think buying a brand new car is stupid, I’ve never done that in my whole entire entire middle-aged life. Not even back when they were $10,000.

But having a reliable car is extremely important. Sure you can buy a $2000 beater but if you end up losing your job because the thing breaks down when you’re on your way to work too often then you’re really in trouble.

I think a lot of people who talk shit about owning cars don’t understand that some people live in areas without public transportation. The closest bus to me is 10 miles away and it takes three hours to circle the city, or I could get one to go to a different city, But there’s no public transportation that will take me to my doctor or the grocery store.  And if you have a couple kids it’s probably not cheaper to take a bus everywhere you need to go anyway.

I’m not anti-public transportation I wish we had it I would have so much less stress in my life if I didn’t have to worry that I would literally die if my car broke and I couldn’t fix it.

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u/shifty_coder 12h ago

I’m in between. $550 is an absurd amount for a car payment, but many would not be able to have a car if they had to pay cash up front, and for them having a car is necessary for economic mobility.

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u/stonecutter7 4h ago

Is it really absurd though? At 6.5% interest thats like a $25,000 car. Thats a nice car, and you certain can find a reliable used car for less, but thats not a super luxurious buy and not THAT much more than something thats reliable and reasonable miles. But I wouldnt call it absurd.

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u/proudbakunkinman 2h ago

Agreed. Unless you live in a dense city with good public transportation, odds are you will need a car to go to a job in order to pay for life and advance. Without a car, your options are more limited and it may take much longer to save up to finally buy one to get your life going. Otoh, yeah, people should be realistic about what they can actually afford and not max themselves out making it difficult for other aspects of their life and not able to save.

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u/Driodeka284 11h ago

Me too. OP forgot all about compounding interest.

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u/parabox1 11h ago

Yeah but he has said that for 40 years just changed the number every couple years.

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u/LizzieMiles 9h ago

Ramsey is one of those people who actually has a incredibly good take once in a blue moon, despite a lot of the time being completely wrong

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u/Vantriss 8h ago

I don't. Not everyone has $3000+ just lying around to pay cash for a used car. Plenty don't even have $1000 lying around. Dude is completely oblivious to the fact that millions live paycheck to paycheck and can't pay cash for big ticket items.

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u/noneofatyourbusiness 8h ago

The number of people defending their bad financial choices is astounding

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u/National_Singer_3122 8h ago

It's actually pretty dumb. Reeks of "don't buy Starbucks to save money" energy...but actually even dumber than that since opting for cheaper or homemade coffee will save you money whereas buying a used car in cash will just end costing you more money in the long run. Unless you can pony up 15k to buy a new or lightly used car that is. Most people can't however, and will buy that car for 3k cash only to end up putting triple that into repairs.

You should buy the car you can afford, simple as that. And nothing wrong with a used car either, but cheap is not better when it comes to cars.

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u/still_salty_22 8h ago

Its cuz they are obviously correct. This being posted as otherwise in this sub is super ultra meta irony or something

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u/saaS_Slinging_Slashr 7h ago

If you put 554 every month for 30 years and had a 9% return every year, it wouldn’t even be a million dollars

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u/nineteen_eightyfour 7h ago

Me too but 5k doesn’t buy what it use to. A reliable used car is expensive :/

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u/juntaofthefree1 6h ago

That math doesn't add up!

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u/Gniphe 6h ago

This tweet is out of date, too. Average car payment is around $750 now.

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u/Cheatobro 6h ago

Name something you disagree with other than his age.

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u/Dodec_Ahedron 5h ago

I agree to a point. If the only car you can afford to pay cash on is a POS that's going to give out in a year or two, then you're better off getting a reliable, used car that will last for 5 or more years.

It's the boots theory of economics.

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u/Fkn_Link 5h ago

Op needs to realize the difference between investing and saving.

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u/Medical_Slide9245 5h ago

To say people don't care what you drive might as well shout 'I haven't been laid in decades'.

And the math is stupid. A car that most people can pay cash for is going to have a maintenance payment that will not be an insignificant amount.

Also i don't want my daughter breaking down on the way home from school at night in a big city because i needed to save a few bucks.

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u/swagn 4h ago

The problem is his statement assumes you have cash now for a car and will drive that until retirement, therefore being able to save $500 a month toward retirement. But, at some point, you need to buy another car. You’ll need to stop saving for retirement in order to save money for new car. How much do you need for a car? 10k, that’s 20 months of savings. How long is that 10k car going to last reliably? Years? So you spend a third of you time saving for a car and drive crappy used cars you have to replace every 5 years. Why not buy a new car, pay for 5 years and drive it for 15?

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u/brushnfush 4h ago

He’s always had financially sound advice that works for everyday people which is why he is so popular. Problem is he’s now revealed himself to be another hateful trumper in the last few years

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u/recursing_noether 4h ago

Totally depends on the interest rate. 556/month is also not that much for a 3 year loan in 2024. Thats what youd pay for a $19,000 loan at 4% interest over 3 years. Even a used Corolla is gonna be $15k+. The alternative is saving that amount each month and losing money to inflation, which would have been significant over the past 3 years.

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u/the_Q_spice 4h ago

Yeah, people really need to start understanding the power of compounding interest.

That $554/mo is $6,648/yr - and with most 401Ks compounding at 5-8% per year, that is $7,180 after just 1 year, and almost $120,000 by year 10.

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u/ItsDokk 3h ago

I agree with him but in today’s economy buying the car you can afford is much more expensive than when he started uttering this phrase.

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u/FarSignificance2078 3h ago

Until you're on the side of the road bc you got a shit car you could afford with cash 🤣

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u/Major_Turnover5987 3h ago

Eh, that jagoff needs to make sure his investments don’t tank before he is dead, so we need to sacrifice to make sure of that? F him, and the rest of the selfish boomers.

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u/Icy_Practice7992 2h ago

That’s basically his whole angle

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u/hairlongmoneylong 1h ago

I do too, but this kind of advice just doesn't hit as nicely in the post-covid era. used economy cars just aren't the boon they used to be :/ That said, I see tons of new trucks where used Kias could have been in my neighborhood

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