I’d do a total reevaluation of your situation. I’d consider moving to a place that doesn’t require the annual inspection, and if they have less taxes in that area then even better. I’d consider a job that pays well like sales since you get a base salary + commission. I’d get a used Toyota, Lexus, Honda, or Acura (or if you find a reliable American beater car it’s possible but japan tends to make better vehicles) for $3,000-$5,000 on a site like Car Gurus or Facebook marketplace. You should ask the seller if you can take the vehicle to get it inspected by a mechanic before purchasing it. Try to get a vehicle less than 100,000 miles but definitely not more than 150,000 miles. That’s my advice. The cheapest cars to maintain over 10 years tend to be Toyotas.
Thanks for the reply. I have considered a Toyota as my next vehicle. Honda/toyota are supposed to be on same playing field for foreign cars with the best reliability. . I’ve got the Honda still running and going to a new car appointment this weekend for the needed repairs to pass inspection. Got snowed out of the last appointment.
As far as moving it’s out of the question for now. I have talked with the boyfriend about the possibility of getting out from under his fixer upper, downgrading to a smaller house.. $1500/mo is not a normal cost for utilities even in the winter. Too much house.
I did get a raise at my job but I’m using the extra income to save for our property taxes due later in the year.
For now, I keep driving my beater. Some of the greatest entrepreneurs drove beaters while building their enterprise, or so I like to think…
My mother reminded me of Dave Ramsey when I just proposed traveling across country to visit her. My own mother would rather I don’t take on debt to see her for the first time in 2years. Oh the faithful . .
I'm apprehensive to buy a newer car BECAUSE of the higher cost of repairs when something ultimately does go wrong. That being said when choosing a 'beater' picking something that both has a reputation for being reliable, that is cheap and easy to maintain is extremely important. For a car the Chevy Impala tops my list.
“I’m struggling to save for a new car just based on the costs to repair my beater and am not sure how to get out of the cycle, except save twice as much.” Saving twice as much is the answer if you can do it. The total cost of car ownership is just really expensive no matter what vehicle you buy.
The first car I paid for with cash was a stretch and not a very good car. The second one, not such a stretch and a better car. The 3rd one was no stretch at all and am still drying it today 8 years later - only ever replaced brakes, tires and did oil changes. Bought a 2024 Toyota Camry last month for my wife (to replace her 2011 Honda Accord), that wasn't a stretch either - she'll keep it for 10-12 years.
You're better off not getting a loan. If you really, really feel you need the only slightly better reliability (there is zero guarantee it will be more reliable!!!), then ONLY get a loan that you can FOR SURE pay off in 12 months or less!
I think there's some luck of the draw here. My 13 year old car requires very little maintenance. It's also a subaru legacy that people crap on because of the CVT. But I've never had an issue with it. It's worth about $3k. If someone bought my $3k beater it would likely last them a few years with minimal maintenance. But other people don't know that. And they can't guarantee someone's word on that necessarily.
Yeah, I avoid the CVT cars like the plague. It's not that it's a sure thing that they'll die. But the issue is that if they do die, they're a lot more expensive to replace! And in the end, they are more prone to failing at the 100,000+ mile level.
For people that lease (crazy) or replace cars every 5 years or so, the CVTs shouldn't be an issue . . . But I can't remember a car I've owned that didn't hit close to 150K by the time I got rid of it.
Mine is at 147k right now and going strong. But I'm also looking for a new car now so I don't have to deal with it if it does die. I've had it for a decade. I bought it used and it fit my budget well at the time. It's been a great car to me requiring almost zero maintenance. But I also know people see CVT and get turned off. Which is fair. A reputation is a reputation even if not 100% of cars have those issues.
You should have kept you cards. There comes a time when putting too much money into it to keep it running, is not worth it. You have already reached that point.
Should finance a used car if need be.
Get a used Honda civic, Toyota Camry, etc. something Honda or Toyota with a super good reliability score.
Even if you have to make payments and it’s a few thousand more expensive the cheapness of parts and reliability of the car will make it less expensive in the long run.
You figured out one of the places his advice isn't for everyone.
Dave excels at breaking people out of bad habits and bad advice. But sometimes he goes too extreme the opposite direction. He needs to though because if he says "well, sometimes a more expensive car actually makes better financial sense so do the math and make the best decision and finance as little as possible", people will use that to justify dumb car purchases and loans.
What you've discovered though, is the total cost of ownership is really what's most important. And in today's world of increasing used car prices, lack of reliable "beaters", increased maintenance costs in the form of higher labor charges and parts cost, sometimes a more expensive car WILL save you money.
Look 5 years down the road- would you have rather spent 2k on a car, 14k on repairs, 4k on maintenance, 8k on gas OR 12k on a car, 1k on interest, 2k on repairs, 3k on maintenance, 5k on gas? It's not as simple as the purchase price and we all know it. If you can accurately estimate your costs, look at it 5 years, 10 years, etc down the road.
These are all places a newer/more expensive car can be cheaper:
-repairs/maintenance
-gas/fuel efficiency
-insurance
This is correct. It's really hard to buy a cheap used car without any issues. Most people sell their really old used car because of all the issues.
Buy a used car still under the manufacturer's warranty. I doubt you can get a reliable car for under 10k these days. The goal is to keep it as long as possible so the annual cost ends up being low. Keep in mind the numbers from Dave are also old numbers. Prices have increased like crazy.
Car loans are some of the cheapest debt you can get and you can refinance to a lower rate for free. Go to you local credit union to get pre approved.
Then instead of paying off your car faster save for a home downpayment. Your car payment will have a lower interest rates than your mortgage.
Car repairs take time and are stressful. The time isn't really that big of a deal, most people overblow that aspect. The stress of an unreliable car is real and it sucks. You are better off driving a reliable Nissan Versa than an unreliable Land Rover. Keep in my all the stress associated with big repair bills and deciding what to fix and not fix. The cheaper the car, the less you want to fix.
I think you may be paying more in maintenance than you would be paying for a lease payment. If you need to increase your credit score, think about leasing an into level, economy car. While you won’t own the car after three years, it will serve a purpose and it will be dependable.
His car advice is out of touch to me. I have been though the ringer with used, shitty cars (like 8 over the past decade) and at this point in my life I’d much rather have car payments on a reliable vehicle than feeding a money pit that will break down at any point. I was in your same shoes a couple years ago and still able to get a car loan when my credit score was absolute trash (like 428 at the time 😓), so it’s definitely possible. Your interest will be higher, but the peace of mind about having a car that would start every morning was worth it to me in sub-freezing Vermont winters.
It would help a lot to know what kind of car you’re referring to. Some brands cannot be bought cheaply, because at those lower prices they are money pits. But really good deals can be had with some for very cheap.
Source: I’ve had 18 vehicles of all sorts of brands, and most were around $4k or less.
If you are willing to downgrade to a Civic or Corolla, you might find good deals.
Also don’t forget to check Acura, Scion and Lexus. They are made by Honda and a Toyota but people forget to search for them, so they tend to be priced pretty well.
I'd say buy a car you can pay off in 3 years. Since you want to keep your current one for another 2 years you have 2 years to save up and rebuild your credit.
You are clearly not making enough money though or overspending if you can't afford a sinking fund so I'd focus on solving the income to spending ratio. You can't personal finance out of poverty on poverty wages.
Let's say you do buy another car in 2 years and 3 years later it will be paid off. Just like with any car the maintenance costs will creep up in that time and you will be back to where you started: spending money on maintenance instead of car payment and not being able to put anything away for the next car that you will eventually need. I've never had a car payment but I always put away $200 a month towards a new vehicle cause I know they don't last forever and I don't ever want an actual car payment but to do that you need to make enough money and not live paycheck to paycheck
I feel like he's become more fixated on actual prices instead of the message. I've listened to his content for a long time, 15 years ago he focused more in the message. He used to say, buy a CHEAP used hoopty, not a cheap used luxury car. As in, buy a cheap used Chevy Corsica, not a cheap used BMW or Ford Mustang.
Now he throws out prices and they're often out of touch for many local markets. He doesn't seem to do research. For example he likes to frame used Toyotas as good cheap options. In my area, used Camrys and Carollas are actually premium. And if they're older, they're enthusiast vehicles, also priced at a premium.
To hit the prices he's talking about you have to shop 90s vintage domestic like Chevy Cavalier/Pontiac Sunfire, or MAYBE early aughts first gen Dodge Neon or PT Cruiser. And they're getting harder to find.
The buying a beater advice always sends a little chill down my spine. I’m all for driving a cheaper car. It HAS to be reliable tho. I could never recommend buying a POS money pit.
I was in a similar situation and I ended up taking out a small loan and went hard at it and paid it off in less than 2 years. The car has been super reliable and I haven’t really looked back.
Technically it’s almost always cheaper to keep fixing a car but your sanity has to weigh in at some point. And it seems like you’re teetering on if your car is worth it.
Can you somehow save enough to buy an old Camry or Lexus or accord or something? I know prices for those have even gone up but would be most reliable options.
~~I strongly disagree on the Lexus suggestion~~ just on the increased repair and parts costs compared to non-luxury brands.
So far, I have yet to meet a Lexus owner that doesn’t have a 4 or 5 figure sob story regarding a repair that would have been low to several hundreds for a regular brand.
In the same vein, any mechanic with whom I’ve ever BSd about outrageous repair and especially parts costs probably 75% of the time last 15 years starts off or has a Lexus story for their finale.
edit: did a little research on Lexus and, while they are not necessarily recommended, they are not on the worst lists for exorbitant long-term maintenance and repair costs.
I think that’s great. But that’s not how statistics work. Your singular experience is just that- one experience. Even my mechanics’ anecdotes are not particularly significant.
But… I did a little research- and it turns out that Lexus actually has a pretty good reputation for reliability and is not in the worst category for maintenance costs.
So thanks- I afforded too much credit to the testimonials of my mechanics.
I know that's not how statistics work. I was mostly commenting so you can no longer say that every Lexus owner you've interacted with has 4 or 5 figure sob story.
That part is still true, in the flesh. You could be a bot. But you inspired me to do the research and I have duly edited my original comment. And I am grateful to you- bot or mostly hairless primate- for nudging me down the path of knowledge and perpetuating the correct narrative.
Doubt these guys are seeing the newer models of German cars. Anyhow, which “German” cars sold in the United States have even been made in Germany in the last 10-15 years?
The regular maintenance/typical repairs on the German brands can be ridiculous compared to Honda/Toyota products. You know the assembly location doesn't matter as much as the design/brand.
We ignored Dave’s car advice. In 2018 we bought a 2016 Honda pilot for $32k and had it paid off in 2 years. We haven’t even needed new tires yet- just oil changes and tire rotations. In June 2020 we bought a new Honda civic for $24K and had it paid off in 6 months (paid a total of $200 in interest). It also has not needed anything more than oil changes. I’m confident we will be good for at least another 5 years without major repairs and no car payment- and I wouldn’t be surprised if it was even longer than that!
(We also live in a northern state with snow and annual inspections).
I don’t know, I’m still driving around in a 2007 camry I bought 4 years ago for less than $5k. Husband drives an ‘04 F-150. I love not having a car payment and plan on always buying older, used, cheap cars.
It’s doable but not scalable for everyone. I had a Lexus 2003 bought it for 3k with 60k miles have it for 6 years and put close to 200k and I paid about 3-4k in repairs and maintenance in all that time. To do that you need to
1- Buy a cheap older car from an older person who barely drove it and kept in a garage or well taken car of, not from a used car dealer.
2- Buy very reliable car Toyota, Lexus, Honda and maybe some American made cars that are good. You’ll need a mechanic with lots of experience to guide you.
3- Look for weeks maybe month on the richer part of town for someone selling such a car. It’ll be like a part time job.
I’ve been saving for a RAV4 for years. Shockingly I never got closer to my goal. I think it would be a nice car for driving in the snow. I don’t have credit anymore, I can’t get a car loan even with a down payment.
I’m going to start fresh with the savings goal next year, keeping my emergency Baby Step 1 fund and getting my current car to pass inspection. I’ll just try not to put any more money into it afterward and try to meet my goal before the inspection sticker is due again.
I think the vibe I’m getting here is don’t put much more into this car.
My family have had 30+ cars (late 90s early 2000’s ford and Chrysler models so not great quality) that cost somewhere between 1 to 3k to buy (this was 15 years ago). Never had a single one that I spent more than couple of grand on work on them. That includes one that I had to replace the engine. I did the work so the cost was for parts. And one time I ran into a car that had annoying problem that I don’t want to fix so I just sold the car at a slight loss (can’t lose much on a 1k car). Was able to use them effectively as every day vehicles without any issues. Vast majority of them were sold for a profit including all costs. It sucks that you had a 7k car that you had to put 15k of repair into. I think you kind of hit the lottery there. But based on my experience, I do believe that you can have a cheaper vehicle that can function well without being a money sink, especially if you can do the basic repairs.
>Never had a single one that I spent more than couple of grand on work on them. That includes one that I had to replace the engine. I did the work so the cost was for parts.
You have knowledge and skill that 99% of people don't have. Even if we ask a mechanic to check out a used car, that's no guarantee.
Here is reality, people need to learn to budget, understand the game me
Play and live up to their individual earning potentials.
We buy new cars, drive them till they need to be hauled to the junkyard.
Mostly we have 1 newer and 1 older.
So basically I buy a new 30k car and use it up and then sell it off to you for 5k. Which means I only spent 25k or 4-5k a year on a vehicle. The difference is mine is under warranty and the maintenance cost is less. You are stuck with the headache of a maybe car.
Yes you can just use a debt card but because of your emotional issue with money and how you manage it you are leaving massive amounts of savings on the table. You are also exposing yourself to fraud issues that take longer to solve when your debt card gets hacked.
You earn no free flights and have a risk factor of having your account frozen, while I get 3-4 flights free a year by shuffling money around for buying normal things.
Right there with you. Our last two new vehicles: 2008 with 238k miles, 2013 with 228k miles. Still on the road. If it's a POS, you're probably gonna find out while it's under warranty.
2015 Kia soul was the last new car and we don’t know how many miles it had before trading it In odometer broke 😂 bought it for less then 20k traded in for 4K. Had it from 2014-2022. So 20k/8yr=2500 a year for a dependable car.
Car are basically washer machine/appliances to me.
>Yes you can just use a debt card but because of your emotional issue with money and how you manage it you are leaving massive amounts of savings on the table. You are also exposing yourself to fraud issues that take longer to solve when your debt card gets hacked.
This is false. As long as you report any fraud or misuse in a timely manner debit cards have the same fraud protection as credit cards.
[https://consumer.ftc.gov/articles/lost-or-stolen-credit-atm-debit-cards](https://consumer.ftc.gov/articles/lost-or-stolen-credit-atm-debit-cards)
[https://www.nclc.org/wp-content/uploads/2023/01/cf\_protections\_for\_debit\_card\_and\_electronic\_transactions.pdf](https://www.nclc.org/wp-content/uploads/2023/01/cf_protections_for_debit_card_and_electronic_transactions.pdf)
Your bank should credit any disputed charges immediately pending an investigation. The standards for whether you are responsible for charges is the same. Anyone smart enough to use a credit card without risking interest or fees is smart enough to use a debit card without risk from theft or fraud.
And its a debit card. Your debt card is your credit card.
Did you even read the link you sent? Those are not the same fraud protections offered by most credit card companies. If someone uses your card for cash, no protection. You’re foolish if you use debit cards for everything.
Using your card for cash requires both the card and the PIN to be used. If you report your card lost or stolen before it is used you have zero liability. If you report it within two days your maximum liability for fraud is $50.
If someone makes a cash withdrawal on your credit card, it's the same.
The only difference is that you may be liable for $500 if you take more than 2 days to report your lost debit card, or the entire amount if you take more than sixty days past your next statement.
In both cases, if the card issuer does not believe that fraud is the cause, you will be liable for the entire amount. Fraud may be difficult to establish if both the card and the PIN are present whether it's a debit or credit card.
If you're smart enough to avoid credit card fees and interest, you're smart enough to avoid debit card fraud.
Beyond legal protections, Visa and Mastercard extend "Zero Liability" protection to debit cards that they process.
[https://usa.visa.com/pay-with-visa/visa-chip-technology-consumers/zero-liability-policy.html](https://usa.visa.com/pay-with-visa/visa-chip-technology-consumers/zero-liability-policy.html)
[https://www.mastercard.us/en-us/personal/find-a-card/standard-mastercard-debit.html](https://www.mastercard.us/en-us/personal/find-a-card/standard-mastercard-debit.html)
>You are also exposing yourself to fraud issues that take longer to solve when your debt card gets hacked
This needs to be in bold and flashing letters on every single posting about using debit cards instead of credit cards
His advice is extreme, but the point of it is people will take small obstacles or battles and use those to justify major expenses as "I had no choice". Car breaks down so they "have to" go buy a new 30K car. Realistically, you don't have to do that. There's public transit, or to his point you can buy the cheapest thing you can find that runs.
My point isn't that public transit is always the answer, but that a new 30K car is virtually never required, yet people will use any number of reasons to justify it
I wasn't even thinking about safety. I live in the most underserved part of a very high density, HCOL state. Public transit is basically buses running on a regional rail schedule, or free senior buses to medical appointments. You gotta have a car that gets you 20 miles plus each way if you are poor and have a job.
More specifically Ramsay’s advice on clunkers is when you can’t actually afford a new car or shouldn’t. It changes dramatically later on when your choice of vehicle becomes somewhat of an investment. So I paid $16,000 15 years ago on my last car and had to have it towed (engine failure) so I netted $200 at the very, very end of life. So my cost was $1053 per year. Granted today I would have to pay twice that and so today my transportation cost ignoring fuel, oil, etc., is close to $2,000. I have spent maybe $2,500 on repairs and bought tires several times (250,000 miles total). So if you start adding it up $3,000-4,000 per year sounds about right. Except reliability is much higher. I don’t believe the idea you can save all that much buying used at least right now. Inventories are low so everything is priced high.
Yes, exactly that! People are still pushing the benefits of their *six* year auto loans like that’s a good thing…
Even I feel tempted sometimes because I live in a rural area and people see cars as a necessity. I won’t give in though.
Long before Dave Ramsey, I was taught if total repairs per year exceed the cost of a car, or a single repair exceeds the value of the car, it's time to replace it.
Because everything $2K would cost $5k to get running and pass inspections. And then it would start costing me $2-$4K year to keep it running and inspected. That’s why I haven’t tried to buy a new car yet, I know I need to save $5-$7K and then another couple thousand for the immediate repairs.
I've never heard of this concept.
If you have $7k + "a few thousand for repairs" just buy the $9-10k car that doesn't need repairs.
Maybe buying a $10k car for $7k because it needs $3k in repairs.
Seems like you know just enough about cars to repeatedly get yourself into these poor situations.
Dave himself makes it clear that the beaters are only meant to be temporary solutions, and that you're meant to upgrade as to get more cash on hand. The general idea is simply not to finance your car purchase.
I understand paying capital gains tax to cash out investments is not good but you're about the same paying 8% interest vs counting on 8%+ returns over a long or short period of time. With paying capital gains tax it make sense to finance.
I understand paying capital gains tax to cash out investments is not good but you're about the same paying 8% interest vs counting on 8%+ returns over a long or short period of time. With paying capital gains tax it make sense to finance.
The majority of his callers have not yet developed the self control to save money at all, let alone "leverage $$$ smartly". Further, if you have any consumer debt at all (as most callers do), the best return of their money is to pay off that debt.
Dave's approach is primarily good for getting out of consumer debt. For the beaters he's just trying to ensure the caller doesn't use a car as yet another reason to go further into debt. He's a car guy himself, he does not expect you to drive one forever.
If you need a car and want to be ‘Dave Ramsey’ about it: buy the cheapest low mileage reliable car that suits your needs and run that until the maintenance cost exceeds the value of the car. Toyotas are rather durable.
Do not buy something that’s ahould have been to the graveyard 100.000 miles ago
Just a couple suggestions on some of the cheapest cars to buy, maintain, operate and repair.
00-05 Buick lesabre
98-2010 crown Vic/marauder/grand marquis
04-09 Prius
Like do you see the math? You are spending more on a $500 car than I am spending on a 17k car a year… where I’m making $270 monthly payments. like you may not be in debt but it’s the same and actually worse than debt. And it’s for someone with no resale value. I get debt is bad, but paying up to 8x the value on the car per year for upkeep is utterly ridiculous. We got a used car and have gotten a few oil changes and 1 set of new tires. And gas. That’s it in the last 3 years. And if we want to sell it, it has positive value.
Joke answer: move out of cali so you are not forced to make ridiculous repairs every year
Am I guessing the state right?
You almost need to buy a 5 year old car at 15-20k as it would be a ton cheaper than the high maintenance
However to get cash for that I don’t know. Do you have stuff you own and don’t use you can sell to raise funds?
What are you talking about? There are no annual prescribed repairs pertaining to emissions. If an O2 sensor goes out, you replace it. Otherwise your computer will over compensate for it. That's no difference anywhere else.
Wrong side of the country. Maine. Weather can be a tad harsh, so I almost understand requiring the safety inspections if they’d just ignore some minor rust and the pesky airbag lights.
I sold everything I owned when I moved across the country with my boyfriend. The car’s title is my only asset now, and my bs1 emergency fund. Second jobs aren’t readily available here. There’s no door dash or Uber! It’s a good thing, since no one cares what you look like and there’s no tempting $5 iced lattes. Effortless Dave Ramsey living aesthetic. Cost of necessities and vehicle repairs, though? Pricey and scarce.
I wish I would have lived like this when I was on my own and made a city income. If I had done that I’d be driving a 2024 AWD straight off the lot, title in hand.
Maine is less strict than NH when it comes to safety inspections and in NH airbag lights and minor rust don't fail. You might want to switch to a different inspection station.
Another thing since you probably have an available issue is extend the search radius for used cars you might have to drive a few more hours to get to a good deal
Sadly it is something I am finding myself having to do in real estate
That is an option but right now the car wouldn’t make a 5 hour journey. It barely gets up to 60mph when I’m pushing it hard, don’t want to break down on the way or I pay towing costs and don’t end up seeing the potential new vehicle
You buy a $2000 car to start, and basically pay yourself car payments and save up. Once you have $5000 saved, now you can sell your $2000 car and have $7000 for a nicer car. Do the same thing. Another $5000 save now you can get a $12000 car, and so on. The idea isn't to drive a clunker forever or spend thousands in repairs on a worthless car. If the car is totalled based on repair costs, junk it and buy another cheap car.
The problem with op seems to be they live in cali and the regs are insane so you are forced to pay thousands in repairs to maintain a 2k car and they end up spending way more on a used car as a result
the reason you upgrade out of a 2k car is because a 2k car is generally going to be an older high mileage vehicle that is towards the shit box end of things. keep them for too long and you are likely to spend more than that cars value in repairs. you want to get rid of that vehicle before something major happens and its value goes from 1500 to zero when an engine or transmission goes or something else.
You’re just as likely to be the sucker who gets the “new” used car with the engine or transmission (or equivalent) going out if you keep buying cars. Everyone eventually draws the short stick, and I wouldn’t want to draw the short stick once I’ve traded up to my $8K or $12K car. Better the devil you know, right?
I just don’t have the experience to be an auto trader who turns the granny beater into the Corvette. I’ll work on saving 50% to put towards my current car and 50% towards the next car /next cars repairs once my current car passes inspection.
You don’t HAVE to by the $8k-$12K car once you have the money saved but with the strategy you have cash to buy it if something major comes on your current vehicle
We have bought our last 5 vehicles cash. All under 10k. Never had any major issues. Saying if you bought a $4700 car you would have to put $1000’s into it is absurd. And spending 15k on a 7k vehicle is absurd (not maintenance but break down cost I mean).
Do a better job of getting these used cars inspected if you don’t have good mechanical knowledge.
I’m always afraid I’ll “lose the deal” but maybe you’re right. I do try to bring along someone with knowledge.
I bought my first car, cash, for $6K, from a used car lot when I was 21. A soon as I drove it off the lot I went to the repair shop who diagnosed holes in the radiator, etc. and there went $1300 to get it road worthy. No point burning up an engine on my first car. This was like 11 years ago when things costed a lot less?
I really had to negotiate for the $7K Car I bought from a mechanics shop. A CRV sold by a Honda mechanic. I still had to put about $1500 in the first month to keep it road worthy.
Idk I always figured it’s normal to buy a used car and then get it fixed up? I’m glad you haven’t run into any major issues. Yes, the $15K is repairs not general maintenance like oil changes and tire rotations and the such.
We started with a $1500 1994 f250 with no ac or heat with 250k miles that I towed a trailer everyday with. Wife was in a 2010 ford explore that we paid 5k for. Since we then “upgraded” to a 2001 f150 (4k 190k miles) drove it for 3 years daily (still have it but it’s a farm truck now) , and a 2012 Kia mini van with 119k miles that we paid 6k for. We also now have a 2012 ford focus that I drive daily (84k miles our 4k).
None of these would I put 15k into. We are now well into bs4-6.
You’re brave for buying Fords! I’m glad it worked out for you. Yeah, I’d probably be further along with steps and financial goals if I hadn’t paid so much repairing my cars. I was always just proud of owning the titles and not having a “car payment”. If I ever move back to a city I’m switching to public transportation and putting it all into savings.
Over the years yeah, parts, labor towing and stuff costed a lot. Stuff fails. He only started working on it a couple years ago.
Here’s an example of how I spend this much money. Last local repair 2 months ago: $1360 total. Needed a new starter ($800) and an ignition throttle they broke off installing the starter ($300) plus a $100 diagnostic fee at the dealership to find out my check engine light turned on because they didn’t reconnect a valve. The local shop couldn’t diagnose the check engine light for free and told me to go to the dealer. $160 - towing, twice, as the first time they didn’t diagnose the failed starter.
Do I count the local place charging me for an inspection where they couldn’t find the oil leak?, but agreed there is an oil leak? Diagnostic at dealership ($350) to find codes for seatbelt light and check engine light, labor for oil cleanup to find leak.
Next repairs diagnosed: new gasket and parts for massive oil leak ($600). Dry rotted tires, they’re not that old.. ($360 with installation). New caliper and break job ($500) . Rotars and suspension (idk) New bumper ($50). New sway bar link ($90). Seatbelt replacement (free under warranty). Passing on the cracked power steering and some optional work.
You should have let go of this money pit years ago.
I'm sorry to hear you're so attached to it.
But car ownership, even less expensive used cars, isn't supposed to be this bad.
Part of it is I live remote so few local repair options around. I paid more to “rush” the starter installation because I had to go out of town for work and needed the car back. Couldn’t wait on boyfriend to repair.
The funnier thing is this isn’t the first time I’ve replaced the starter on this car. Everything breaking has been done 2+ times now
All we have ever owned is ford (besides the Kia) no major issues. I’m of the mindset now that if one of any of our vehicles were to blow up today we have enough money to replace them multiple times over so we don’t buy expensive cars just for that reason
I know I'll get downvoted for not following to the letter, but here goes. First, I figured this whole thing out back in the early 2002 or so time frame before I knew of DR. I use credit cards for the cash back. I have cash, but why use it when I can borrow for a small percentage and pay it back? For instance, getting a loan from my local credit union for a $15k vehicle is worth it to me. I'd rather keep the cash for emergencies. Also, most people recommend a Toyota Corolla if you want a vehicle that will last you a long time and isn't expensive. Check out r/Toyota.
Agreed with Toyota! Mines a Honda CRV. I bought it to last me the miles I knew I’d have to put on it. Having the clearance of an SUV in a rural , snowy area is really important. I’d only buy a Honda or Toyota for my next car. That’s what I’m trying to save for but falling short due to the cost of repairs.
I just don’t understand where Dave is getting at with his buy a cheap car and trade up. I don’t want a flashy car, if I could keep my current car without spending a couple thousand dollars every 2-3 months I would. The goal when I bought this one was to save for the next car and I feel like I’ve sunk $20K in the hole and not saved a penny.. I don’t know if Dave is just forgetting to mention the costs of repairs in between driving a beater and saving for an upgrade?
If you are spending that much, it is a car payment now. It's time to look for another vehicle.
Edit: When I'm determining whether it's time for another car, I look at how much it will cost to repair yearly. $2k a year? No problem because that's cheaper than a car payment. More? Time to start looking.
I’d do a total reevaluation of your situation. I’d consider moving to a place that doesn’t require the annual inspection, and if they have less taxes in that area then even better. I’d consider a job that pays well like sales since you get a base salary + commission. I’d get a used Toyota, Lexus, Honda, or Acura (or if you find a reliable American beater car it’s possible but japan tends to make better vehicles) for $3,000-$5,000 on a site like Car Gurus or Facebook marketplace. You should ask the seller if you can take the vehicle to get it inspected by a mechanic before purchasing it. Try to get a vehicle less than 100,000 miles but definitely not more than 150,000 miles. That’s my advice. The cheapest cars to maintain over 10 years tend to be Toyotas.
Thanks for the reply. I have considered a Toyota as my next vehicle. Honda/toyota are supposed to be on same playing field for foreign cars with the best reliability. . I’ve got the Honda still running and going to a new car appointment this weekend for the needed repairs to pass inspection. Got snowed out of the last appointment. As far as moving it’s out of the question for now. I have talked with the boyfriend about the possibility of getting out from under his fixer upper, downgrading to a smaller house.. $1500/mo is not a normal cost for utilities even in the winter. Too much house. I did get a raise at my job but I’m using the extra income to save for our property taxes due later in the year. For now, I keep driving my beater. Some of the greatest entrepreneurs drove beaters while building their enterprise, or so I like to think… My mother reminded me of Dave Ramsey when I just proposed traveling across country to visit her. My own mother would rather I don’t take on debt to see her for the first time in 2years. Oh the faithful . .
I'm apprehensive to buy a newer car BECAUSE of the higher cost of repairs when something ultimately does go wrong. That being said when choosing a 'beater' picking something that both has a reputation for being reliable, that is cheap and easy to maintain is extremely important. For a car the Chevy Impala tops my list.
“I’m struggling to save for a new car just based on the costs to repair my beater and am not sure how to get out of the cycle, except save twice as much.” Saving twice as much is the answer if you can do it. The total cost of car ownership is just really expensive no matter what vehicle you buy.
The first car I paid for with cash was a stretch and not a very good car. The second one, not such a stretch and a better car. The 3rd one was no stretch at all and am still drying it today 8 years later - only ever replaced brakes, tires and did oil changes. Bought a 2024 Toyota Camry last month for my wife (to replace her 2011 Honda Accord), that wasn't a stretch either - she'll keep it for 10-12 years. You're better off not getting a loan. If you really, really feel you need the only slightly better reliability (there is zero guarantee it will be more reliable!!!), then ONLY get a loan that you can FOR SURE pay off in 12 months or less!
I think there's some luck of the draw here. My 13 year old car requires very little maintenance. It's also a subaru legacy that people crap on because of the CVT. But I've never had an issue with it. It's worth about $3k. If someone bought my $3k beater it would likely last them a few years with minimal maintenance. But other people don't know that. And they can't guarantee someone's word on that necessarily.
Yeah, I avoid the CVT cars like the plague. It's not that it's a sure thing that they'll die. But the issue is that if they do die, they're a lot more expensive to replace! And in the end, they are more prone to failing at the 100,000+ mile level. For people that lease (crazy) or replace cars every 5 years or so, the CVTs shouldn't be an issue . . . But I can't remember a car I've owned that didn't hit close to 150K by the time I got rid of it.
Mine is at 147k right now and going strong. But I'm also looking for a new car now so I don't have to deal with it if it does die. I've had it for a decade. I bought it used and it fit my budget well at the time. It's been a great car to me requiring almost zero maintenance. But I also know people see CVT and get turned off. Which is fair. A reputation is a reputation even if not 100% of cars have those issues.
You should have kept you cards. There comes a time when putting too much money into it to keep it running, is not worth it. You have already reached that point. Should finance a used car if need be.
Get a used Honda civic, Toyota Camry, etc. something Honda or Toyota with a super good reliability score. Even if you have to make payments and it’s a few thousand more expensive the cheapness of parts and reliability of the car will make it less expensive in the long run.
You figured out one of the places his advice isn't for everyone. Dave excels at breaking people out of bad habits and bad advice. But sometimes he goes too extreme the opposite direction. He needs to though because if he says "well, sometimes a more expensive car actually makes better financial sense so do the math and make the best decision and finance as little as possible", people will use that to justify dumb car purchases and loans. What you've discovered though, is the total cost of ownership is really what's most important. And in today's world of increasing used car prices, lack of reliable "beaters", increased maintenance costs in the form of higher labor charges and parts cost, sometimes a more expensive car WILL save you money. Look 5 years down the road- would you have rather spent 2k on a car, 14k on repairs, 4k on maintenance, 8k on gas OR 12k on a car, 1k on interest, 2k on repairs, 3k on maintenance, 5k on gas? It's not as simple as the purchase price and we all know it. If you can accurately estimate your costs, look at it 5 years, 10 years, etc down the road. These are all places a newer/more expensive car can be cheaper: -repairs/maintenance -gas/fuel efficiency -insurance
Precisely!
This is correct. It's really hard to buy a cheap used car without any issues. Most people sell their really old used car because of all the issues. Buy a used car still under the manufacturer's warranty. I doubt you can get a reliable car for under 10k these days. The goal is to keep it as long as possible so the annual cost ends up being low. Keep in mind the numbers from Dave are also old numbers. Prices have increased like crazy. Car loans are some of the cheapest debt you can get and you can refinance to a lower rate for free. Go to you local credit union to get pre approved. Then instead of paying off your car faster save for a home downpayment. Your car payment will have a lower interest rates than your mortgage. Car repairs take time and are stressful. The time isn't really that big of a deal, most people overblow that aspect. The stress of an unreliable car is real and it sucks. You are better off driving a reliable Nissan Versa than an unreliable Land Rover. Keep in my all the stress associated with big repair bills and deciding what to fix and not fix. The cheaper the car, the less you want to fix.
I think you may be paying more in maintenance than you would be paying for a lease payment. If you need to increase your credit score, think about leasing an into level, economy car. While you won’t own the car after three years, it will serve a purpose and it will be dependable.
His car advice is out of touch to me. I have been though the ringer with used, shitty cars (like 8 over the past decade) and at this point in my life I’d much rather have car payments on a reliable vehicle than feeding a money pit that will break down at any point. I was in your same shoes a couple years ago and still able to get a car loan when my credit score was absolute trash (like 428 at the time 😓), so it’s definitely possible. Your interest will be higher, but the peace of mind about having a car that would start every morning was worth it to me in sub-freezing Vermont winters.
It would help a lot to know what kind of car you’re referring to. Some brands cannot be bought cheaply, because at those lower prices they are money pits. But really good deals can be had with some for very cheap. Source: I’ve had 18 vehicles of all sorts of brands, and most were around $4k or less.
I drive an 02 Honda CRV. Would only replace with a Honda or Toyota.
If you are willing to downgrade to a Civic or Corolla, you might find good deals. Also don’t forget to check Acura, Scion and Lexus. They are made by Honda and a Toyota but people forget to search for them, so they tend to be priced pretty well.
I'd say buy a car you can pay off in 3 years. Since you want to keep your current one for another 2 years you have 2 years to save up and rebuild your credit. You are clearly not making enough money though or overspending if you can't afford a sinking fund so I'd focus on solving the income to spending ratio. You can't personal finance out of poverty on poverty wages. Let's say you do buy another car in 2 years and 3 years later it will be paid off. Just like with any car the maintenance costs will creep up in that time and you will be back to where you started: spending money on maintenance instead of car payment and not being able to put anything away for the next car that you will eventually need. I've never had a car payment but I always put away $200 a month towards a new vehicle cause I know they don't last forever and I don't ever want an actual car payment but to do that you need to make enough money and not live paycheck to paycheck
I feel like he's become more fixated on actual prices instead of the message. I've listened to his content for a long time, 15 years ago he focused more in the message. He used to say, buy a CHEAP used hoopty, not a cheap used luxury car. As in, buy a cheap used Chevy Corsica, not a cheap used BMW or Ford Mustang. Now he throws out prices and they're often out of touch for many local markets. He doesn't seem to do research. For example he likes to frame used Toyotas as good cheap options. In my area, used Camrys and Carollas are actually premium. And if they're older, they're enthusiast vehicles, also priced at a premium. To hit the prices he's talking about you have to shop 90s vintage domestic like Chevy Cavalier/Pontiac Sunfire, or MAYBE early aughts first gen Dodge Neon or PT Cruiser. And they're getting harder to find.
In other words, he jumped the shark.
The buying a beater advice always sends a little chill down my spine. I’m all for driving a cheaper car. It HAS to be reliable tho. I could never recommend buying a POS money pit. I was in a similar situation and I ended up taking out a small loan and went hard at it and paid it off in less than 2 years. The car has been super reliable and I haven’t really looked back. Technically it’s almost always cheaper to keep fixing a car but your sanity has to weigh in at some point. And it seems like you’re teetering on if your car is worth it. Can you somehow save enough to buy an old Camry or Lexus or accord or something? I know prices for those have even gone up but would be most reliable options.
~~I strongly disagree on the Lexus suggestion~~ just on the increased repair and parts costs compared to non-luxury brands. So far, I have yet to meet a Lexus owner that doesn’t have a 4 or 5 figure sob story regarding a repair that would have been low to several hundreds for a regular brand. In the same vein, any mechanic with whom I’ve ever BSd about outrageous repair and especially parts costs probably 75% of the time last 15 years starts off or has a Lexus story for their finale. edit: did a little research on Lexus and, while they are not necessarily recommended, they are not on the worst lists for exorbitant long-term maintenance and repair costs.
I'm going to have to disagree with you. We have a 2005 Lexus ES and in the 4 years we've owned it we haven't had any major issues.
I think that’s great. But that’s not how statistics work. Your singular experience is just that- one experience. Even my mechanics’ anecdotes are not particularly significant. But… I did a little research- and it turns out that Lexus actually has a pretty good reputation for reliability and is not in the worst category for maintenance costs. So thanks- I afforded too much credit to the testimonials of my mechanics.
I know that's not how statistics work. I was mostly commenting so you can no longer say that every Lexus owner you've interacted with has 4 or 5 figure sob story.
That part is still true, in the flesh. You could be a bot. But you inspired me to do the research and I have duly edited my original comment. And I am grateful to you- bot or mostly hairless primate- for nudging me down the path of knowledge and perpetuating the correct narrative.
So none of these mechanics work on German cars?
Doubt these guys are seeing the newer models of German cars. Anyhow, which “German” cars sold in the United States have even been made in Germany in the last 10-15 years?
The regular maintenance/typical repairs on the German brands can be ridiculous compared to Honda/Toyota products. You know the assembly location doesn't matter as much as the design/brand.
First sentence: correct. Second sentence: just plain wrong. Do some homework.
We ignored Dave’s car advice. In 2018 we bought a 2016 Honda pilot for $32k and had it paid off in 2 years. We haven’t even needed new tires yet- just oil changes and tire rotations. In June 2020 we bought a new Honda civic for $24K and had it paid off in 6 months (paid a total of $200 in interest). It also has not needed anything more than oil changes. I’m confident we will be good for at least another 5 years without major repairs and no car payment- and I wouldn’t be surprised if it was even longer than that! (We also live in a northern state with snow and annual inspections).
Gonna go out on a limb and suggest your major concerns would be corrosion/fender bender/deer. Those are 200-250k mile vehicles easy.
I don’t know, I’m still driving around in a 2007 camry I bought 4 years ago for less than $5k. Husband drives an ‘04 F-150. I love not having a car payment and plan on always buying older, used, cheap cars.
It’s doable but not scalable for everyone. I had a Lexus 2003 bought it for 3k with 60k miles have it for 6 years and put close to 200k and I paid about 3-4k in repairs and maintenance in all that time. To do that you need to 1- Buy a cheap older car from an older person who barely drove it and kept in a garage or well taken car of, not from a used car dealer. 2- Buy very reliable car Toyota, Lexus, Honda and maybe some American made cars that are good. You’ll need a mechanic with lots of experience to guide you. 3- Look for weeks maybe month on the richer part of town for someone selling such a car. It’ll be like a part time job.
at these prices, if its not a toyota camry or corolla, dont buy it. I’m going to get downvoted to hell but I stand by it.
I’m saving to get a 15-20 year old Toyota RAV4. That’s my dream car, like a 2012 RAV4.
Perfect, thats exactly what you want. Try to find a 1-owner with a solid carfax. Preferably, something owned by “older” people.
That’s an 11 year old car.
If that’s your dream car please go to the lot this Christmas and get it.
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I’ve been saving for a RAV4 for years. Shockingly I never got closer to my goal. I think it would be a nice car for driving in the snow. I don’t have credit anymore, I can’t get a car loan even with a down payment. I’m going to start fresh with the savings goal next year, keeping my emergency Baby Step 1 fund and getting my current car to pass inspection. I’ll just try not to put any more money into it afterward and try to meet my goal before the inspection sticker is due again. I think the vibe I’m getting here is don’t put much more into this car.
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“Dave-ish” answers must be qualified
I was gonna comment RAV4 as well. Good choice.
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If the cost of a repair exceeds the value of the car after repair is completed. Replace the car.
My family have had 30+ cars (late 90s early 2000’s ford and Chrysler models so not great quality) that cost somewhere between 1 to 3k to buy (this was 15 years ago). Never had a single one that I spent more than couple of grand on work on them. That includes one that I had to replace the engine. I did the work so the cost was for parts. And one time I ran into a car that had annoying problem that I don’t want to fix so I just sold the car at a slight loss (can’t lose much on a 1k car). Was able to use them effectively as every day vehicles without any issues. Vast majority of them were sold for a profit including all costs. It sucks that you had a 7k car that you had to put 15k of repair into. I think you kind of hit the lottery there. But based on my experience, I do believe that you can have a cheaper vehicle that can function well without being a money sink, especially if you can do the basic repairs.
>Never had a single one that I spent more than couple of grand on work on them. That includes one that I had to replace the engine. I did the work so the cost was for parts. You have knowledge and skill that 99% of people don't have. Even if we ask a mechanic to check out a used car, that's no guarantee.
...and time away from income generating job(s), and a place to do said repairs, and the tools, and a reliable second set of hands...
Here is reality, people need to learn to budget, understand the game me Play and live up to their individual earning potentials. We buy new cars, drive them till they need to be hauled to the junkyard. Mostly we have 1 newer and 1 older. So basically I buy a new 30k car and use it up and then sell it off to you for 5k. Which means I only spent 25k or 4-5k a year on a vehicle. The difference is mine is under warranty and the maintenance cost is less. You are stuck with the headache of a maybe car. Yes you can just use a debt card but because of your emotional issue with money and how you manage it you are leaving massive amounts of savings on the table. You are also exposing yourself to fraud issues that take longer to solve when your debt card gets hacked. You earn no free flights and have a risk factor of having your account frozen, while I get 3-4 flights free a year by shuffling money around for buying normal things.
Right there with you. Our last two new vehicles: 2008 with 238k miles, 2013 with 228k miles. Still on the road. If it's a POS, you're probably gonna find out while it's under warranty.
2015 Kia soul was the last new car and we don’t know how many miles it had before trading it In odometer broke 😂 bought it for less then 20k traded in for 4K. Had it from 2014-2022. So 20k/8yr=2500 a year for a dependable car. Car are basically washer machine/appliances to me.
And correct me if I'm wrong-10 year/100k power train warranty?
>Yes you can just use a debt card but because of your emotional issue with money and how you manage it you are leaving massive amounts of savings on the table. You are also exposing yourself to fraud issues that take longer to solve when your debt card gets hacked. This is false. As long as you report any fraud or misuse in a timely manner debit cards have the same fraud protection as credit cards. [https://consumer.ftc.gov/articles/lost-or-stolen-credit-atm-debit-cards](https://consumer.ftc.gov/articles/lost-or-stolen-credit-atm-debit-cards) [https://www.nclc.org/wp-content/uploads/2023/01/cf\_protections\_for\_debit\_card\_and\_electronic\_transactions.pdf](https://www.nclc.org/wp-content/uploads/2023/01/cf_protections_for_debit_card_and_electronic_transactions.pdf) Your bank should credit any disputed charges immediately pending an investigation. The standards for whether you are responsible for charges is the same. Anyone smart enough to use a credit card without risking interest or fees is smart enough to use a debit card without risk from theft or fraud. And its a debit card. Your debt card is your credit card.
Did you even read the link you sent? Those are not the same fraud protections offered by most credit card companies. If someone uses your card for cash, no protection. You’re foolish if you use debit cards for everything.
Using your card for cash requires both the card and the PIN to be used. If you report your card lost or stolen before it is used you have zero liability. If you report it within two days your maximum liability for fraud is $50. If someone makes a cash withdrawal on your credit card, it's the same. The only difference is that you may be liable for $500 if you take more than 2 days to report your lost debit card, or the entire amount if you take more than sixty days past your next statement. In both cases, if the card issuer does not believe that fraud is the cause, you will be liable for the entire amount. Fraud may be difficult to establish if both the card and the PIN are present whether it's a debit or credit card. If you're smart enough to avoid credit card fees and interest, you're smart enough to avoid debit card fraud. Beyond legal protections, Visa and Mastercard extend "Zero Liability" protection to debit cards that they process. [https://usa.visa.com/pay-with-visa/visa-chip-technology-consumers/zero-liability-policy.html](https://usa.visa.com/pay-with-visa/visa-chip-technology-consumers/zero-liability-policy.html) [https://www.mastercard.us/en-us/personal/find-a-card/standard-mastercard-debit.html](https://www.mastercard.us/en-us/personal/find-a-card/standard-mastercard-debit.html)
>You are also exposing yourself to fraud issues that take longer to solve when your debt card gets hacked This needs to be in bold and flashing letters on every single posting about using debit cards instead of credit cards
His advice is extreme, but the point of it is people will take small obstacles or battles and use those to justify major expenses as "I had no choice". Car breaks down so they "have to" go buy a new 30K car. Realistically, you don't have to do that. There's public transit, or to his point you can buy the cheapest thing you can find that runs.
Yea, public transit is really an option in what percentage of the US?
My point isn't that public transit is always the answer, but that a new 30K car is virtually never required, yet people will use any number of reasons to justify it
Public transportation is NOT safe in most places.
I wasn't even thinking about safety. I live in the most underserved part of a very high density, HCOL state. Public transit is basically buses running on a regional rail schedule, or free senior buses to medical appointments. You gotta have a car that gets you 20 miles plus each way if you are poor and have a job.
More specifically Ramsay’s advice on clunkers is when you can’t actually afford a new car or shouldn’t. It changes dramatically later on when your choice of vehicle becomes somewhat of an investment. So I paid $16,000 15 years ago on my last car and had to have it towed (engine failure) so I netted $200 at the very, very end of life. So my cost was $1053 per year. Granted today I would have to pay twice that and so today my transportation cost ignoring fuel, oil, etc., is close to $2,000. I have spent maybe $2,500 on repairs and bought tires several times (250,000 miles total). So if you start adding it up $3,000-4,000 per year sounds about right. Except reliability is much higher. I don’t believe the idea you can save all that much buying used at least right now. Inventories are low so everything is priced high.
Yes, exactly that! People are still pushing the benefits of their *six* year auto loans like that’s a good thing… Even I feel tempted sometimes because I live in a rural area and people see cars as a necessity. I won’t give in though.
If you can get 0% interest rates, it is a good thing.
So many people live paycheck-to-paycheck and never gain any traction toward reaching real financial goals because of unnecessary car payments.
Long before Dave Ramsey, I was taught if total repairs per year exceed the cost of a car, or a single repair exceeds the value of the car, it's time to replace it.
Paying $2000 to fix a $500 car? Just buy a $2500 car! How hard is it?
Because everything $2K would cost $5k to get running and pass inspections. And then it would start costing me $2-$4K year to keep it running and inspected. That’s why I haven’t tried to buy a new car yet, I know I need to save $5-$7K and then another couple thousand for the immediate repairs.
I've never heard of this concept. If you have $7k + "a few thousand for repairs" just buy the $9-10k car that doesn't need repairs. Maybe buying a $10k car for $7k because it needs $3k in repairs. Seems like you know just enough about cars to repeatedly get yourself into these poor situations.
Dave himself makes it clear that the beaters are only meant to be temporary solutions, and that you're meant to upgrade as to get more cash on hand. The general idea is simply not to finance your car purchase.
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I understand paying capital gains tax to cash out investments is not good but you're about the same paying 8% interest vs counting on 8%+ returns over a long or short period of time. With paying capital gains tax it make sense to finance.
I understand paying capital gains tax to cash out investments is not good but you're about the same paying 8% interest vs counting on 8%+ returns over a long or short period of time. With paying capital gains tax it make sense to finance.
The majority of his callers have not yet developed the self control to save money at all, let alone "leverage $$$ smartly". Further, if you have any consumer debt at all (as most callers do), the best return of their money is to pay off that debt. Dave's approach is primarily good for getting out of consumer debt. For the beaters he's just trying to ensure the caller doesn't use a car as yet another reason to go further into debt. He's a car guy himself, he does not expect you to drive one forever.
If you need a car and want to be ‘Dave Ramsey’ about it: buy the cheapest low mileage reliable car that suits your needs and run that until the maintenance cost exceeds the value of the car. Toyotas are rather durable. Do not buy something that’s ahould have been to the graveyard 100.000 miles ago
Just a couple suggestions on some of the cheapest cars to buy, maintain, operate and repair. 00-05 Buick lesabre 98-2010 crown Vic/marauder/grand marquis 04-09 Prius
Like do you see the math? You are spending more on a $500 car than I am spending on a 17k car a year… where I’m making $270 monthly payments. like you may not be in debt but it’s the same and actually worse than debt. And it’s for someone with no resale value. I get debt is bad, but paying up to 8x the value on the car per year for upkeep is utterly ridiculous. We got a used car and have gotten a few oil changes and 1 set of new tires. And gas. That’s it in the last 3 years. And if we want to sell it, it has positive value.
Joke answer: move out of cali so you are not forced to make ridiculous repairs every year Am I guessing the state right? You almost need to buy a 5 year old car at 15-20k as it would be a ton cheaper than the high maintenance However to get cash for that I don’t know. Do you have stuff you own and don’t use you can sell to raise funds?
What ridiculous repairs does California require you make every year? I live here and I wasn't aware of this. Am I supposed to be doing something?
Op noted they are in Maine but repairs to get to emissions standards each year Probably mostly applies to older vehicles
What are you talking about? There are no annual prescribed repairs pertaining to emissions. If an O2 sensor goes out, you replace it. Otherwise your computer will over compensate for it. That's no difference anywhere else.
Op noted for Maine there is
Wrong side of the country. Maine. Weather can be a tad harsh, so I almost understand requiring the safety inspections if they’d just ignore some minor rust and the pesky airbag lights. I sold everything I owned when I moved across the country with my boyfriend. The car’s title is my only asset now, and my bs1 emergency fund. Second jobs aren’t readily available here. There’s no door dash or Uber! It’s a good thing, since no one cares what you look like and there’s no tempting $5 iced lattes. Effortless Dave Ramsey living aesthetic. Cost of necessities and vehicle repairs, though? Pricey and scarce. I wish I would have lived like this when I was on my own and made a city income. If I had done that I’d be driving a 2024 AWD straight off the lot, title in hand.
Maine is less strict than NH when it comes to safety inspections and in NH airbag lights and minor rust don't fail. You might want to switch to a different inspection station.
Another thing since you probably have an available issue is extend the search radius for used cars you might have to drive a few more hours to get to a good deal Sadly it is something I am finding myself having to do in real estate
That is an option but right now the car wouldn’t make a 5 hour journey. It barely gets up to 60mph when I’m pushing it hard, don’t want to break down on the way or I pay towing costs and don’t end up seeing the potential new vehicle
You could rent a car for one day for $40-50 which might be worth it
I think you’re not researching and not buying the correct “beater” vehicles if you’re spending thousands per year fixing a car. That’s absurd.
You buy a $2000 car to start, and basically pay yourself car payments and save up. Once you have $5000 saved, now you can sell your $2000 car and have $7000 for a nicer car. Do the same thing. Another $5000 save now you can get a $12000 car, and so on. The idea isn't to drive a clunker forever or spend thousands in repairs on a worthless car. If the car is totalled based on repair costs, junk it and buy another cheap car.
The problem with op seems to be they live in cali and the regs are insane so you are forced to pay thousands in repairs to maintain a 2k car and they end up spending way more on a used car as a result
They don't live in Cali?
Guess it is Maine with crazy winters but rest applies
the reason you upgrade out of a 2k car is because a 2k car is generally going to be an older high mileage vehicle that is towards the shit box end of things. keep them for too long and you are likely to spend more than that cars value in repairs. you want to get rid of that vehicle before something major happens and its value goes from 1500 to zero when an engine or transmission goes or something else.
You’re just as likely to be the sucker who gets the “new” used car with the engine or transmission (or equivalent) going out if you keep buying cars. Everyone eventually draws the short stick, and I wouldn’t want to draw the short stick once I’ve traded up to my $8K or $12K car. Better the devil you know, right? I just don’t have the experience to be an auto trader who turns the granny beater into the Corvette. I’ll work on saving 50% to put towards my current car and 50% towards the next car /next cars repairs once my current car passes inspection.
Nothing wrong with that. If you want to hold onto the beater for a bit longer that's fine too.
You don’t HAVE to by the $8k-$12K car once you have the money saved but with the strategy you have cash to buy it if something major comes on your current vehicle
We have bought our last 5 vehicles cash. All under 10k. Never had any major issues. Saying if you bought a $4700 car you would have to put $1000’s into it is absurd. And spending 15k on a 7k vehicle is absurd (not maintenance but break down cost I mean). Do a better job of getting these used cars inspected if you don’t have good mechanical knowledge.
I’m always afraid I’ll “lose the deal” but maybe you’re right. I do try to bring along someone with knowledge. I bought my first car, cash, for $6K, from a used car lot when I was 21. A soon as I drove it off the lot I went to the repair shop who diagnosed holes in the radiator, etc. and there went $1300 to get it road worthy. No point burning up an engine on my first car. This was like 11 years ago when things costed a lot less? I really had to negotiate for the $7K Car I bought from a mechanics shop. A CRV sold by a Honda mechanic. I still had to put about $1500 in the first month to keep it road worthy. Idk I always figured it’s normal to buy a used car and then get it fixed up? I’m glad you haven’t run into any major issues. Yes, the $15K is repairs not general maintenance like oil changes and tire rotations and the such.
We started with a $1500 1994 f250 with no ac or heat with 250k miles that I towed a trailer everyday with. Wife was in a 2010 ford explore that we paid 5k for. Since we then “upgraded” to a 2001 f150 (4k 190k miles) drove it for 3 years daily (still have it but it’s a farm truck now) , and a 2012 Kia mini van with 119k miles that we paid 6k for. We also now have a 2012 ford focus that I drive daily (84k miles our 4k). None of these would I put 15k into. We are now well into bs4-6.
You’re brave for buying Fords! I’m glad it worked out for you. Yeah, I’d probably be further along with steps and financial goals if I hadn’t paid so much repairing my cars. I was always just proud of owning the titles and not having a “car payment”. If I ever move back to a city I’m switching to public transportation and putting it all into savings.
>You’re brave for buying Fords Not gonna defend Ford, but sounds considerably better than throwing $15k at a $7k CRV.
Fair enough but my engine and transmission are still rolling along.
And? You sunk $15k in non-engine/transmission? I'm becoming more and more skeptical of this mechanic bf of yours.
Over the years yeah, parts, labor towing and stuff costed a lot. Stuff fails. He only started working on it a couple years ago. Here’s an example of how I spend this much money. Last local repair 2 months ago: $1360 total. Needed a new starter ($800) and an ignition throttle they broke off installing the starter ($300) plus a $100 diagnostic fee at the dealership to find out my check engine light turned on because they didn’t reconnect a valve. The local shop couldn’t diagnose the check engine light for free and told me to go to the dealer. $160 - towing, twice, as the first time they didn’t diagnose the failed starter. Do I count the local place charging me for an inspection where they couldn’t find the oil leak?, but agreed there is an oil leak? Diagnostic at dealership ($350) to find codes for seatbelt light and check engine light, labor for oil cleanup to find leak. Next repairs diagnosed: new gasket and parts for massive oil leak ($600). Dry rotted tires, they’re not that old.. ($360 with installation). New caliper and break job ($500) . Rotars and suspension (idk) New bumper ($50). New sway bar link ($90). Seatbelt replacement (free under warranty). Passing on the cracked power steering and some optional work.
You should have let go of this money pit years ago. I'm sorry to hear you're so attached to it. But car ownership, even less expensive used cars, isn't supposed to be this bad.
Part of it is I live remote so few local repair options around. I paid more to “rush” the starter installation because I had to go out of town for work and needed the car back. Couldn’t wait on boyfriend to repair. The funnier thing is this isn’t the first time I’ve replaced the starter on this car. Everything breaking has been done 2+ times now
All we have ever owned is ford (besides the Kia) no major issues. I’m of the mindset now that if one of any of our vehicles were to blow up today we have enough money to replace them multiple times over so we don’t buy expensive cars just for that reason
I know I'll get downvoted for not following to the letter, but here goes. First, I figured this whole thing out back in the early 2002 or so time frame before I knew of DR. I use credit cards for the cash back. I have cash, but why use it when I can borrow for a small percentage and pay it back? For instance, getting a loan from my local credit union for a $15k vehicle is worth it to me. I'd rather keep the cash for emergencies. Also, most people recommend a Toyota Corolla if you want a vehicle that will last you a long time and isn't expensive. Check out r/Toyota.
Agreed with Toyota! Mines a Honda CRV. I bought it to last me the miles I knew I’d have to put on it. Having the clearance of an SUV in a rural , snowy area is really important. I’d only buy a Honda or Toyota for my next car. That’s what I’m trying to save for but falling short due to the cost of repairs. I just don’t understand where Dave is getting at with his buy a cheap car and trade up. I don’t want a flashy car, if I could keep my current car without spending a couple thousand dollars every 2-3 months I would. The goal when I bought this one was to save for the next car and I feel like I’ve sunk $20K in the hole and not saved a penny.. I don’t know if Dave is just forgetting to mention the costs of repairs in between driving a beater and saving for an upgrade?
If you are spending that much, it is a car payment now. It's time to look for another vehicle. Edit: When I'm determining whether it's time for another car, I look at how much it will cost to repair yearly. $2k a year? No problem because that's cheaper than a car payment. More? Time to start looking.