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In the absence of a flair system on lemmy yet, letβs try to make it easier to scan through posts by type in here by using tags:
If you can afford to pay cash then take the loan and invest the cash elsewhere, and if you can beat the interest on the loan then come back to write better financial advice than this. And even if you can't you'd at least have done something interesting.
We bought a reliable car for 22k without financing. Our next car will be bought when this one dies. It's not necessary to have a new car every couple of years.
Dave Ramsey is an out of touch asshole though.
As a pedestrian, I'm glad not to support big bike chain lube, I'm saving dozens of pennies annually
Oh, you're one of those shills for the shoe-leather industry! π
Dave Ramsey hasn't tried to buy a reliable used car in the last decade, at least. You aren't going to find anything under about $10k that's actually reliable where I am. A mid-90s Toyota with 300,000 miles maybe, but not anything under 150,000.
With the $554 average new car payment in the original post, you can afford that $10k new-to-you used car outright in cash every 18 months.
Average price of a used car in the US, right now, is $29,000. Which means that for a $554 payment, it's going to be 5.4 years rather than 1.5. From there, you need to figure out how many miles you put on a car in a year, make some rough guesses about how many miles the average car has left before the cost to repair exceeds the cost of replacing, etc. Obvs. a high mileage used car is going to require significantly more maintenance than a new car will (...in most cases, as long as you aren't buying a new Land Rover or Jaguar), so you'll need to figure that in as well. You'll probably want good insurance, even if you're only required to carry minimal liability insurance, because any accident could be catastrophic for your finances if you can't afford to repair your car.
It's a bit of a death spiral; wages are still too low, car prices are too high.
I walk or bike to about 90% of the places I need to go. That said, I also recently bought a vehicle for $1200. Works fine except the fuel gauge is broke so I have to just keep it topped off. My neighbor is trying to sell his Kia Rio for $1500. Works fine. It'll last at least another 3 or 4 years. Likely more. I have a friend whose son totaled out his car. He wanted another. I recommended a car that was in the $1000 to $2000 price range. He didn't want it. He took out a loan and got a very nice, very sporty car. Then he got in another wreck and totaled it out too. So then he goes and gets himself another expensive car. I just don't understand.
If I took my bike to town, it would take me about an hour, give or take. To get home would be about four hours. It's 15 miles, one way, with about 2200' of elevation change.
If you pay 500$ a month for 30 years at 5% interest compounded monthly you would contribute $180k and would have $416,129 so not really a million. You would need a little less than 9.5% interest to get a million. 2% interest is only getting you $246k which when you take into account inflation 2-3% normal average minus 5% one of the higher realistic interests that is what you are actually making .
If you pay 500$ a month for 30 years at 5% interest compounded monthly you would contribute $180k and would have $416,129 so not really a million. You would need a little less than 9.5% interest to get a million. 2% interest is only getting you $246k which when you take into account inflation 2-3% normal average minus 5% one of the higher realistic interests that is what you are actually making .
Ramsey is always very optimistic about investment returns. His advice isn't too bad though.
Honestly if someone were to have said that garbage to him 40 years ago he prolly would have called it unAmerican and communistical.
It is weird to watch the ethical scoliosis happen in real time over the decades.
Insurance payments for teenage boys are INSANE. $100-150 is the usual but my buddy is paying literally $300 a month on a year 200X Tahoe that he bought for $700 and fixed himself. Its the cheapest option on his families insurance and his parents won't let him switch.
That's not even payments that's INSURANCE.
Yup, when I was 18-23 I was the primary driver of our car, but we put the insurance and name under my gf (now wife) and it was half the cost if I had gotten the insurance instead.
It drives me crazy when i get spam that says they can save me money on my car insurance
O rly? How you gonna beat $0?
I told one of these spam callers that my license has been legally revoked. It has been almost 15 years since I last got one of those calls. They used to be something that happened, at least, a few times per day.
I paid $830/month for a moderately priced car at only 2.9% for a few years. 1/3 my current yearly salary in full. It wasnβt smart, but I beat inflation at that rate. That car let me and my wife travel so much in our early marriage and it was so worth it. The car is more expensive now then when I bought it.
I love that car and it brought me joy. Itβs paid off now.
Tomorrow is not promised. Save for the future but donβt neglect being happy today. Go live a little.
I was looking for a new car a few years ago, but i didn't have to rush, i didn't have a car for almost two years and just used my work car if i really needed one. Then covid hit and i was still sometimes browsing cars. People were selling the cars they no longer can afford and i was fucking shocked to see people selling cars saying that the monthly pay off is like 1200 or shit like that. Who would think that is a good idea? If you can afford it there is no reason to pay it off, and if you can't, it's too expensive. That is just the car payment, no insurance or road fees or anything.
$1200 is ridiculous. That's how much my mortgage is.
Never buying a vehicle I can't pay upfront for again if I can help it. Hated those payments the first time I had to go through it. I do more real work with my 80's era pickup than the yuppies who need their "toy haulers" do that sit almost twice as high. Plus, once I get the diesel swapped in and I'm running biodiesel, I have less emissions as well. Did you know that modern American diesels are so tuned for regular diesel that they can't run biodiesel? I assume the Euro models can though.
Usually biodiesel compatibility is a function of fuel pumps and injectors, the high performance ones are $$$. I wouldn't assume Euro models are biodiesel compatible, the VW diesels weren't after the 'Pumpe dΓΌse' era.
I assume the euro stuff is all compatible because biodiesel is more common there and they have different emissions standards. Material wise, you just need synthetic rubbers, which have been standard since the 90's. The tuning issue comes from biodiesel being slightly more viscous. This effects injector diameter and injector pump pressure. The ignition point is also slightly different and timing can be adjusted, but I've never bother. Older diesels had enough tolerance that these things never mattered much, but newer ones aren't rated for more then 20% and I haven't heard of someone who's actually tested that.
It's also less relevant as HVO based diesel also comes from veg oil and is much, much closer to regular diesel then biodiesel is.
I've never understood buying a car on credit. My car's 17 years old now. Bought it when it was 8 years old. Insurance is β¬390/yr.
Liquidity. Buying a car on credit is mostly stupid, but there are cases when it makes some sense. My last car loan was 3.54%. My combined accounts were earning ~8%. Paying cash in that case would be throwing away money. Well, throwing away money on top of wasting it on a car.
The hell are these people driving? I pay $240/mo for a goddamn Lexus.
Could also be their shit credit rating playing into that.
I also have shit credit though
Hah, look at this guy that doesn't even have a cybertruck!
You pay $240/mo for a new Lexus? What was that? 12 years financing? Or did you pay most of the cost upfront?
I had no idea my insurance is so much. But it is a lot. If I think about it I'll get angry.
You can take defensive driving courses to lower it though.