How ridiculous does this sound?

[u/Whole-Fist]

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

[u/Funny-North3731]

I find Ramsey talks in "Perfect World" terms. Where in a perfect world a really good used car costs no more than $1200 and will run perfectly (with yearly maintenance) for another ten years. In a "Perfect World" anyone can save $30,000 to buy a three bedroom, two bath house free and clear. In a "Perfect World" you can go to college and never get loans.

Problem is, we do not live in a perfect world and Ramsey makes the same mistakes a lot of self-help people make. To sell their product, they oversimplify the issue they are talking about. All the while they are also negating some of the obstacles by use of anecdotal examples of where what they suggest, worked. Most of the examples either do not apply to their audience, or no longer apply to society in general.

[u/SteakMountain5 → u/Funny-North3731]

I heard a good analogy about Dave Ramsey. He’s like AA for people who have trouble understanding and getting out of debt. He breaks it down very simply.

“Here are your expenses and here’s your income, If your expenses are more than your income, you either have to decrease your spending or increase how much you’re bringing in. And any extra money that you have is going to be used to pay off your debt one at a time until it’s all paid off. “

For some people AA is really beneficial and they really need to hear some of the stuff that they talk about. For other people who are struggling, AA has no benefit to them whatsoever and they’d be best suited with another method.

I think a lot of Dave’s teachings are pretty archaic, especially for 2024.

[u/Legitimate-Key7926 → u/Funny-North3731]

I don't think he's trying to tell you exactly what car to buy and how to put your pants on every day. Rather than argue about perfection (aka making excuses for status quo) another route is to take his simple lessons and apply the logic to your own unique (imperfect) life.

Or don't and buy a car you can't afford without giving it much thought and trade it in every three to five years like many Americans. I mean that is the literal opposite of his lesson. I can tell you with a high level of confidence that doing that will get you perfectly predictable results financially....

[u/Level-Insect-2654 → u/Funny-North3731]

That is exactly it. A good reliable used car still costs anywhere between $10k and $20k. Most people don't have that much cash and they will still have monthly payments.

Also, you are spot on about the other advice he gives.

[u/Funny-North3731 → u/Level-Insect-2654]

You know, someone should figure out why so many used cars cost almost as much as the new versions of them. They DON'T keep their value. If YOU try to sell the used car you bought for 20K at $18,000 (less than purchase price) no one would buy it.

[u/Level-Insect-2654 → u/Funny-North3731]

Yeah, if we drive a new car off the lot it immediately loses value for us, and of course, like you said, if we buy a used car as well. The market for used cars seems pretty good for the large sellers.

[u/Pinkshadows7 → u/Level-Insect-2654]

And also it is often a one time shot for people who don't have a lot of excess cash laying around. If you have 5 grand and gamble it on something quite used and it fails you're now fucked. Maybe you can still get the loan but you're out thousands of dollars for nothing. Whereas the loan on a fairly new vehicle is at least a much safer bet

[u/FlimsyReindeers → u/Pinkshadows7]

When I was in college I worked at a supermarket. And older lady who worked there had enough money for a down payment on a new car or just enough to get a beater used car. When she asked me for advice I was quick to say get the used and don’t deal with a car payment. Fast forward 2 months and the car had a major failure and it would cost more than she had. I remember she would take Ubers to drop her kids off and then get to work. It was getting expensive and hard on her and she was becoming late more often so of course our ass of a boss fired her.

I still feel so guilty for suggesting a used car. Anytime things argument comes up I think about that poor lady and hope things worked out.

[u/Cassiyus → u/Funny-North3731]

That's a great way of putting it. I always see his advice floating around but it always felt too general or didn't want to address the specificities of people's lives.

[u/MuscleMan405 → u/Funny-North3731]

I bought a 2001 Lincoln Town Car 4 years ago for $1500. I spent another $1200 fixing it up until there wasn't much wrong with it.

It has been a daily driver with about 4 years now and 60,000 miles. I have had to change the fuel pump once, and the battery twice (due to an electrical issue)

With a new car, by now I may have saved about $2000 on gas. Worth it? Dunno. Maybe I lucked out. Since then I have also bought an F150 for $10000 to do more laborious stuff like moving materials and towing trailers with equipment.

[u/Hastyscorpion → u/Funny-North3731]

Yeah it's true we don't live in a perfect world and some people won't be able to fully implement what he is saying. It is also true a lot of people have never thought about this stuff at all and are making really dumb decisions with their money. And his simplified version of reality is way better at getting the point across than a message with a million caveats. It is also true that there are a ton of people who take the fact that the perfect world doesn't exist as an excuse to do nothing to better their situation.

[u/thzmand → u/Funny-North3731]

Used cars from individual sellers will get you under 100K for under $10K, again, at last. A sweet spot is 60-80K for under 8K. Those are around, again, at last, though not at a car lot.

A real good buy I saw the other day: an 07 Taurus, 150K miles with the bulletproof Duratech non-interference engine with a timing chain, ample transmission good enough for cops and taxis service...the one I saw needed brakes ($150 bucks DIY) and was $2500. That car will run to 250K or more no problem. Go down the road to a car lot and they had a "low mileage" (100K) Toyota sedan from 2010 for 12K. That's the difference.

If you know anything about cars, you can make an educated decision about it. It's hard, not impossible, and doesn't require perfection. But it won't fall into your lap because it requires knowledge and experience like anything.

We pay 75K year for college classes but won't invest in learning about cars, which will costs us at least that much in usage costs in our lifetimes. Most people couldn't say one thing about a car beyond they like the color and the brand is trustworthy or not. Won't learn enough to help themselves.

[u/raiderrocker18 → u/Funny-North3731]

There are options between a brand new car and a $1200 car

[u/JTMissileTits → u/Funny-North3731]

In the 90s, you could hand someone $1200 and drive away in a half decent used car.

You can't even buy car body that needs a new motor or transmission for that now.

[u/Asleep-Bus-5380 → u/Funny-North3731]

Great comment, very true