Car Payments – Dave Ramsey Rant

Car Payments – Dave Ramsey Rant


I’ve got this friend who drives a car … the only way to describe it is it’s just a piece of crap. It’s just the worst car on the planet. I mean I don’t know and here’s the problem; is the guy actually has money. Like a lot of money but he’s just become a freak about this car. Like he’ll spend money on other stuff he takes his family on vacation and they’ve got a nice house, but he’s like it’s like this car is some kind of a reverse status symbol for this guy. And you know and you know, Lord willing most people more people would be like that rather than driving around in cars you can’t afford with car payments to impress people at a stop light you’ll never meet. A lot of you spend a lot of money to impress people you will never meet with your car and I’ve got some nice cars I like cars, I’m a car boy, there’s no question about that, but man when we were broke we were driving .. well to start with, I was driving a Jaguar and then I went broke and I sold it the day before they took it, so that they didn’t take it to avoid the repossession; the proper thing to do to try to pay my bills of course I didn’t pay the whole bill, I had to sign a note for the difference. And as part of the bankruptcy, it was a disaster and so we’re down to one car. So a friend of mine loaned me a car like my buddy has. He loaned me a .. true story, a 1978 Cadillac, with 478 thousand actual miles on it. The predominant color on this puppy was bondo. It had a vinyl roof and when you drove it, the vinyl roof was broken loose so it filled up with air like a parachute on top. So I’m driving bondo buggy with a parachute on top. I drove that car for 10 years one three-month period, but I saved some money buddy, because I wanted out of that car, I want to take my friend his blessing back. But it rolled, it started; most the time it started, and most the time it rolled. And it got me there. It was really, really embarrassing; humiliating is a better word. To drive that car to our church, because that the church we were going to people didn’t have cars, like they had nice cars. A lot of them were in debt and had car payments, I knew that, but I’m still sitting there driving bondo buggy with a parachute on top up to the church. I park it and the top settles, like … you know it drops down. That seems like 20 minutes ago. It was almost 30 years ago. I drove like no one else so that later I could drive like no one else, so now I’ve got nice cars again, and of course this time they’re a very small percentage of our net worth; a very small percentage of our net worth. And of course I paid cash for them and they just in other words, they’re small enough percentage of a world they don’t matter. Well my buddy’s got money and were he to buy at least one decent car it would be a small percentage, a very small percentage of his world . He’s probably worth 20 million dollars, I don’t know, but something like that, and he’s driving this $200 car and it’s ticking me off , ’cause I’m like dude, you are not modeling success here. You know this is not anything to be proud of; you drive a 200 dollar car so that you never have to drive a 200 dollar car again. That’s the only reason you drive a 200 dollar car. Not because it’s a badge of honor, it’s not something to be proud of son. And I can’t get through to him, so I don’t know what I’m going to do with him. But he’s the reverse of most Americans. Most Americans the average car payment in America is 386 dollars over 84 months right now. Driving a car you can’t afford, not even close to being able to afford it, and then scratching your head wondering why your kids college fund didn’t fund. Well you’re driving it!! You’re driving the college fund that’s why! I mean I get why my friend has become such a freak about his car. I get why he’s thinking that way. Because so many other people, most other people, are the opposite end of the spectrum. I mean he’s a little overboard and a little bit freaky about this old beat-up car, but most you are just stupid. I mean just most of America is just straight up car stupid! You fleece your car, acting like that you when you rented your car, you did a good deal. Give me a break! And the stupid thing loses 60 to 70 percent of its value when you buy a new one in the first four years that you drive it. So you turn thirty thousand dollars into eleven thousand dollars and then scratch your head and wonder why you can’t get ahead financially. What if all your investments; what if all your IRAs, you put money in a mutual fund, every time you did it you turn thirty thousand into eleven? Well everyone knows that’s a formula for not getting rich. Hello! This is not hard to think about people! It’s the largest thing we buy that goes down in value. That’s why my friend’s become a freak about it. He’s like I don’t want to put money and something goes down in value. I’m like yeah, but you’re embarrassing me and everybody else that knows you. Buy a car son. Even if you only spend ten grand, I mean it’s what one one-one hundredth of a percent of his net worth or something? But the rest of you are driving .. you know you’re making thirty thousand dollars a year, you’re driving a seventeen thousand dollar car. Well, that that’s just nuts!! It’s just nuts! You got a household income of 60,000 bucks, and mama gets a $32,000 SUV. Somebody ought to smack you! That’s just nuts! You do not have the financial margin to lose thirty thousand bucks. To lose ten thousand bucks. To lose twelve thousand bucks. If you’ve got enough money that you can throw twelve thousand dollars off the edge of a bridge, and it not damage you, then you can afford to drive a car that expensive. But this idea that you can just ..’well I can afford it’, what most people mean when they say that is they think they can pay the payment if they keep their job. Let me help you with a new definition of I can afford it. I wrote a check and paid for it; that’s the definition of I can afford it. If you can’t pay for it, in cash, in total, on the spot cash on the barrelhead, you can’t afford it. Whatever it is; your car, your clothes, your groceries. Some of you are charging groceries. Huh. Talk about financing a depreciating asset. Wow. We’ve lost our minds in this culture guys, we really have. And all of it is because people have been sold stuff and sold stuff and sold stuff, and they’ve got this entitlement thing, and they say, you know I meet 42 year old men who say stuff like I deserve a nice truck because I work hard. You don’t deserve anything, you little child! ‘Cause you work hard. What do you think, that makes you pregnant? Nobody else is .. nobody else is out here not working hard. Well some of them aren’t, but I mean everybody works hard deserves to go deeply in debt by truck that can’t afford is that what you’re saying? That’s your philosophy of life? How stupid and backward is this? So here’s an idea, pay cash for your cars, and don’t let your cars and boats be more than half your take-home pay and then that’s an indication that you’re not got too much invested in things that are going down in value. I’m not against cars. I’m not against car dealers. I’m against people doing stupid stuff with cars that cause them to be broke and that includes car payments and leasing fleecing your stupid car. There we go. This is the Dave Ramsey Show.

About the Author: Michael Flood

100 Comments

  1. I never did cars notes. My father always bought his cars cash and I grew up this way. 3 years ago I was forced to finance a car. My credit was kinda bad and I needed something to help me build it. I knew that I wanted to buy a house for my family and Im very close to doing that. I can't wait for these stupid payments to finish because I will be going back to my old way.

  2. My mom makes only $23k, yet she got an SUV that costs $32k. Meanwhile, I'm a struggling college student that's going to pay $1k cash for a tiny pickup truck because that's all I need right now.

  3. I have a 1500 car and owned it for 2 years. Paid cash. After I graduate I will pay myself a car payment and then upgrade to a 4k car.

  4. I live in Cleveland Ohio, I don't care what kind of car you Drive. The saltz going to make it a rust bucket in 10 years

  5. I bought a truck half of my income financed but everything else is paid for. Only thing I've ever financed, I've been driving 20 year old vehicles for 15 years, tires of fixing them bc I do all my own work. It's also a tacoma, highest resell value on market

  6. I make payments on my 2014 jeep $360 a month. I have 2 kids. One income rn. Idk what to do. We still have 2 and a half years on this jeep. It’s a nice reliable car but the payments are horrible. Only thing is it’s under my dads name so I’m paying him to make the payment under his name. Idk if I want to keep making these payments!!!

  7. So I generally agree with this.. but @6:20, Dave basically says "if you can't pay for it in cash, you can't afford it, and that goes for anything". Well, what about buying a house then? I think if you're going to live in an area for at least 10 years, then you might as well buy a house instead of renting it. But most people can't buy a house because of just how expensive it is up front, so you have to take a mortgage. Does this mean almost no Americans can afford a house ever in their lifetimes?

  8. I paid 5000 dollars cash for my third hand Nissan Altima. Now I have an 8 year old car that refuses to break or allow me to even think about looking to buy a new car. FML

  9. Car payments are expensive. 350-400 a month for 80 months. Crazy. The milage and repairs. Fuel cost. Adds up. Nuts. When you make your first year payments it really just dinging the interest. Terrible.

  10. Probably only person I'll listen to that will call me stupid 3 times in the podcast Haha Time to stop being stupid!

  11. I feel like his friend he was talking about was Jeff Bezos driving his Toyota Camry and being one of the wealthiest people in history.

  12. Not everyone wants a nice car sir or care about material things. Why is he criticizing the millionaire with the $200 car?

  13. Have not had a car payment in about 25 years. I buy used cars for cash. I drive them until they are dead. I fix them myself until the cost benefit ratio is not in my favor. Then I go buy another. This is why my house is paid for. I have no credit card or credit. I don't pay the bank anything. Taxes are another story.

  14. I really don't get why he is against credit cards. I use one when I go shopping.. pay it off in full at the end of every month.. have an excellent rating to show for it.

  15. I have a 2016 Corolla I financed for $13k with 53k miles. I am a case manager so I drive a lot for work, and I didn't have the time luxury to look for a better car deal. Also, I didn't have cash to purchase it upfront. I've driven almost 30k miles in the past 10 months . I am saving money to purchase another corolla or civic in the next 5.5 years once this car is about 180k miles old.

  16. Dave thinks used cars don't have huge maintenance costs. Its unreal how dumb he is. ALSO. Used cars even only 10 years old are wayyy more likely to kill you than a current model year because of engineering and safety. So yeah it is smart to keep yourself alive than gamble with your life.

  17. Back in my younger years, my at my first job, working at a country club, one thing I came to realize was that the members driving the cheaper American cars were the best tippers. The ones driving the expensive imports ……I was lucky to get tipped a dollar or two.

  18. I've been driving a 92 Volvo 240 wagon for 10 years. It has over 500,000 miles on the original engine. It still looks and drives like new, because I take care of it.
    I could drive anything I want, but why bother, I live 50 miles from the office

  19. Hello Dave,

    I love your show. Just a minor thing. Whoever setup your camera angles should be re-trained to make sure that they're not getting reflections from the window. This can be distracting to some folks watching your videos.

  20. I just afforded my wife's new car, CASH, building our 4th house, cash, debt free, live in a 650m square house, RAMSEY is great.

  21. "Some of you are driving cars to impress people you"ll never meet."

    "Buy a 10 grand car, you are embarrassing me son!"

    He doesn't need to impress you Dave. Let the man do what he wants with his money. You do what you want.

  22. you had someone loan you a car for 10 years? thats a good friend. What if you were in that situation and no one did that for you. What then?

  23. I’m gonna buy a new car every 4 years and get car loans, I don’t want to drive some piece of junk. Nice car means higher quality of life.

  24. Interesting dynamic. People drive to church in nice cars to hear the teachings of Christ who said to sell your possessions, give the money to the poor and follow me.

  25. I was very blessed and fortunate to get a steal on my grandma's car when she got a new one. I paid 4,000$ for a fairly nice car that's worth a good amount more than that. Even though it's a deal, I paid cash for it. Is there anything I am doing wrong? I am genuinely curious

  26. I drive a 2001 Pontiac sun fire and it will have over a million kilometers on it before I get rid of it. Vehicles are not worth wasting money on in my eyes. And yes I did waste money I fixed up a truck and then I got in an accident and it was gone. Just not worth it I have learned.

  27. I bought a 2013 civic new from the dealership in 2014. My interest rate was 0.9%, car was to be paid off in 5 years, I did it in 3 and a half years. I did the minimum payment while saving money on the side so that I could pay it off early. I still have that car and plan on driving it into the ground. In the 3 ish year period I ended up spending less then $800. If you are smart you can buy a new car with money down and payments and still feel ahead.

  28. While agree that if you have a normal job, a 1500 dollar car will get you there and get you out of debt, if you need a car or truck for your business and you have to rely on it, you better go for a ten thousand dollar car and write it off your taxes. It's the only way.

  29. My 20 years old lexis Es 300 is running like champ and I pay 35 dollar as insurance. Yes I bought the car with cash.

  30. Having a cheap car that you pay cash for is great an all but it doesn't matter when your dead. Technology in new cars is improving every year and it prevents accidents

  31. I like you Dave but you dont have to embellish. You said when the Jag was sold you were down to 1 car between you. Then you borrowed a car, so car2. So you’re back to two cars. You never would have driven that car 2 ( bondo buggy) to church. You would have driven car 1 when you both went places together. Kaboom!!

  32. My 2004 maxima with 280.000km still moving like a jet 🤘. Transmission kinda kicking tho 🤦‍♂️ I’m aiming for 300k km. Heated seats heated steering wid dat 3.5 litre engine. She fast 💨

  33. I love David Ramsey because you can just tell that he’s not just giving you a speech about anything or noting he’s giving you something he’s really passionate about .👍 and for that I say thank you

  34. My new car was recently totaled, and I took that as a blessing. After the insurance paid it off, I went and bought a cash car. 11 years and 15 brand new vehicles over that time period. I’m done with car payments as well.

  35. I get a kick out of people who say they “own” their financed vehicle. No the bank “owns” it, you’re financing it. Your paycheck is their collateral.

  36. Paid $1,300 (including taxes and new tires) on a 2008 Nissan Ultima with 185,000 miles with a salvaged title a year ago. Still driving it today.

  37. Thank god i finished my car payments in august 2019 !! I will not buy no more car by lease nerver ever!!

  38. Dave he is trying to get from 20 million to 30 million net worth. Stop complaining, he is being more Dave Ramsey than Dave.

  39. My car will be paid off in 4 months. It's my dream car and it's 5 years old and will be good for another 10 years. (Toyota corrola)

  40. Driving old cars are dangerous many times. Like driving with a broken axle. Unreliable, and risky to keep a job. 2 cents.

  41. You buy a car to use it. It's not designed to make money for you. You finance a car because you need a reliable car and you do not want to tie up money on this machine. I bought my 2007 Ford Fusion SEL brand new in 2007. I financed the car for five years and was paid off it 2012. As of 2019, the car has 233,000 miles and is in excellent shape because of proper maintenance. I have seven years with no car payment.

  42. I bought a used 2009 mini van 4 years ago and paid cash. I love it and plan to drive it until it won't go and can't be fixed.

  43. I’ve got a $2,700 Toyota Camry with a manual transmission that I’m very proud of, lol. It is a hilariously fantastic car for the money. I hope to accumulate some wealth soon, but even then I’d still drive this car. It’s a ‘98 with 124,000 miles on it, and that’s freaking nothing for one of these. They don’t make ‘em like they used to.

  44. Auto loans are for suckers, pay for all cars in cash if you can't afford it don't drive it. I've been under water in a car loan before it's such a waste of money

  45. I make 50, wife stays home, we only can save a little but are debt free. Having another kid and she needs a mom van. I think we’ll go for a used van in mostly cash!

  46. Paid mine off as a student – $3500 hooptie sold by owner. No payments, no problems. And I’ve learned how to do some expensive repairs myself with it, b/c I just straight up don’t trust mechanics to even do the proper diagnostics. I make some decent money now, but I’m still driving that rust bucket 🤣 Looking forward to cleaning the engine bay when I get some down time.

  47. How early is too early to buy a car after you've bought one? I bought a 2014 Golf in 2018 and now it's rolling around to 2020 soon my car will be 6 years old, it's got 104,000km on the clock and there's a new model coming out (in Europe) next year. What's the best approach? It's not caused me any issues and it does exactly what I need it to do but should I sell it while it has value? Or should I hold on and save more? Which is a better approach? Sell while it has value or save so I have more options? I paid cash for it, it was 15,000 euro and I waited til I had 45,000 euro saved so I had three times the cost of the car should anything go wrong. I'm just not sure what is the best thing to do. I'm looking at a 2017 Golf with higher trim level and more powerful engine for 20k. Should I let that offer just go and keep what I have? No sure I'll get an answer to my question but just throwing it out there.

  48. I don’t know how to get through to my friends. My friend is currently in college spends $300-400 a month on food,
    ( even though she can get food for free from the cafeteria) and has no job she currently makes less than $10,000 a year and she just bought a $20,000 car (2020) I was so disappointed when she told me and even more disappointed when she said it will take her six years to pay off. I don’t know how her parents could have let her make that decision, first of all she crashed her other car because she didn’t have any gas in it. How could I get through to her? By the way her family is nowhere near rich.

  49. In love with my 2008 LS4 V8 grand prix! Financed 3grand and put 4grand more into customization/aftermarket maintence. Now I turn more heads than a new anything (:

  50. How many time you are going to tell this lie. First off, 78 Cadillac don’t have a 6th digit on the odometer. Second, no 1978 Cadillac will ever go 300k miles. Then you have the nerve to lie and say 478k miles.

  51. Maybe it's me, but if your fellow parishioners look down upon you in judgement over your junk car you need to find another church

  52. My parents taught me to pay full in cash on used cars. Yeah it doesn't look fancy but I don't own car payments. I just pay car insurance. Meanwhile my friend is behind in car payments because she owns a range rover with a salary that can't cover it because she is paying for an extra condo that she only spend 2 months in the summer, and she also pays rent and food for her two horses on a ranch.

  53. No Upfront Fee!! I just got $45,000 top-up to my Chase account and credit card. He paid off all my car loan and phone bill. Contact him for help now on Whatsapp: +1(201)201-1042 or [email protected] It was worth it.

  54. He cleared up all my loan obligations and helped pay my phone bills (Verizon, Sprint, AT&T only), also got a $8000 transfer to my Citibank account. You can reach him on Whatsapp: +1(201)201-1042 or [email protected]

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