Anyone use Dave Ramsey's Debt Program - Sell your car?

[indimom]

An older thread, but still interesting. We're not interested in selling any cars and are not in the market for buying just yet, but I was interested enough to read it.

I'm surprised by the number of people who think all cars over 100,000 miles are junkers that will cost more than car payments...

We have three cars for four drivers:

2010 Chevy Impala. 128,000 miles. We bought this car when it was two years old, and it is our primary car. We have had a few issues in the last year which cost about $2,000. It was still running, but we chose to do the repairs to keep it in top condition. It runs great and we plan to keep it that way.

2000 Grand Marquis. 130,000 miles. We've owned this car for two years and it runs fabulously. We bought off an older family member so we knew the car's history when we bought. No repairs yet. The radio is a bit glitchy, but we've got phones for music if we need it.

1997 Toyota Corolla. 126,000 miles. We bought it about a year ago from my parents neighbor who was moving into assisted living. We paid $500 and put about $1,000 repairs into it out of the gate. We plan to repair the headliner since it's starting to droop, but we can pull that off without any major cost. We've had zero issues with the engine.

We are approaching the point where we'll have to look into a new/used car. One that's about two years old with 20,000 miles. But, we hope to wait until we can pay all cash. And we plan to keep the three cars we have now. We haven't had a car payment in years. I love owning paid-for cars. The insurance, gas and general upkeep (tires, oil changes) are bad enough without adding $500 car payments.

 

[dreiwhit]

I had a coworker that followed Dave Ramsey's advice, sold both their cars and bought two older cars with way more miles on them.

The aftermath: he was having to constantly work on the car he drove, while his wife's minivan had a transmission failure about a year after they bought it. After they repaired the transmission, they sold both cars and bought newer used or new vehicles with low miles on them.

What my wife and I used to do was to look for used vehicles with lower miles and buy one every 5 years. After it was paid off, we replaced the other vehicle. Doing this we only ended up with one car payment. We did this until 2012, but stopped because of, 1) prices of everything going up (food, insurance, etc), and, 2) cash for clunkers really caused the used vehicle market around here to dry up and prices for used vehicles to go up to where it wasn't a savings to buy used as opposed to new.

 

[Sundowner2]

An older thread, but still interesting. We're not interested in selling any cars and are not in the market for buying just yet, but I was interested enough to read it.

I'm surprised by the number of people who think all cars over 100,000 miles are junkers that will cost more than car payments...

We have three cars for four drivers:

2010 Chevy Impala. 128,000 miles. We bought this car when it was two years old, and it is our primary car. We have had a few issues in the last year which cost about $2,000. It was still running, but we chose to do the repairs to keep it in top condition. It runs great and we plan to keep it that way.

2000 Grand Marquis. 130,000 miles. We've owned this car for two years and it runs fabulously. We bought off an older family member so we knew the car's history when we bought. No repairs yet. The radio is a bit glitchy, but we've got phones for music if we need it.

1997 Toyota Corolla. 126,000 miles. We bought it about a year ago from my parents neighbor who was moving into assisted living. We paid $500 and put about $1,000 repairs into it out of the gate. We plan to repair the headliner since it's starting to droop, but we can pull that off without any major cost. We've had zero issues with the engine.

We are approaching the point where we'll have to look into a new/used car. One that's about two years old with 20,000 miles. But, we hope to wait until we can pay all cash. And we plan to keep the three cars we have now. We haven't had a car payment in years. I love owning paid-for cars. The insurance, gas and general upkeep (tires, oil changes) are bad enough without adding $500 car payments.

That's us too, older cars with high mileage, but thankfully, they all work well and we've been happily driving them for years. We've not been so lucky in the past with used cars, but that was because we got what we wanted, without really researching to see if they were dependable cars. (And they weren't!) We are also hoping to pay cash for our next one, and if all goes as planned, that can be in 3 year or so, once I'm working more and we can save like mad. Once you don't have a car payment, you really aren't anxious for another!

 

[lorac4disney]

We have not. What we have done is to keep one new vehicle which is our dependable family vehicle. We have it financed with 0% interest and we use it for all of our long distance travel (ie vacations).

Our second vehicle is what is considered our "beater". It's rough looking on the outside thanks to a rollover accident that DH had, but it still runs really well and DH wouldn't dream of trading it off. He says it adds character. That vehicle is fully paid for and we bought it with cash. It was used when we got it and it is what he drives to work every day.

We typically keep our vehicles for ten years or until the cost of keeping them (and the cost of being broken down on the side of the road) exceeds the cost of a new vehicle.

I can see this being a workable option in a very narrow set of circumstances, but I do believe in the principle behind it. For me, it's about not letting what we drive define our worth as human beings so that we go for the biggest, most expensive vehicle possible in order to get the ego boost from it. I mean, it would be sweet to drive down the road in a cool ride that I shelled out $2000 per month on, but I would much rather pass on that kind of ego kibble and drive a sensible and more affordable vehicle instead. It may not come with the same level of prestige and road envy, but I don't really need those things in order to make my world go round.

 

[tvguy]

I'm a big fan of buying new and keeping a long time (almost forever)
My fleet is made up of:
1) 1987 Suburban purchased new as a family/weekend/vacation car. 155,000 miles
2) 2000 Mountaineer purchased new, wife's daily driver, 125,000 miles.
3) 2003 Focus purchased new, my daily driver, 150,000 miles

Suburban and Mountaineer have needed transmission rebuilds, and the Suburban new AC compressor and radiator. Other than that, no other repairs over $500. A lot less than just the sales tax on a new, or newer used car.

 

[MillauFr]

I just got rid of our second car back in 2001 and never looked back. It helps to live in a place where a car is not a necessity but more of a luxury.

 

[indimom]

For those mentioning road trips... (and this only works if you aren't super frequent travelers); but, we've rented a car for travel even though we have cars sitting at home. We only travel every other year or so. And we've never paid more than $200 for a car rental.

Adding that to my "transportation" budget doesn't even come close to the cost of buying pricier, newer cars just for the sake of our travel. Even if we travelled annually, it's more cost effective to rent for trips.

Of course, if you are doing lots of road trips every year, you would have to reconsider the cost effectiveness.

 

[kymom99]

For those mentioning road trips... (and this only works if you aren't super frequent travelers); but, we've rented a car for travel even though we have cars sitting at home. We only travel every other year or so. And we've never paid more than $200 for a car rental.

Adding that to my "transportation" budget doesn't even come close to the cost of buying pricier, newer cars just for the sake of our travel. Even if we travelled annually, it's more cost effective to rent for trips.

Of course, if you are doing lots of road trips every year, you would have to reconsider the cost effectiveness.

Our son was involved in high school sports which meant driving sometimes an hour or two for meets. Also we have family about 90 minutes away so having a car we feel comfortable being away from home in has been a priority. However my husband has mentioned using a rental for future road trips now that all our cars are getting some age on them. I know plenty people with cars that have very high mileage and they get by just fine. Yes, they have repairs that come up but I think overall they are saving money. Some are doing it out of necessity due to tuition expenses.

 

[kydisneyfans]

We used to purchase cars around 5-6 years old with 75K miles or so. Between the interest and payment, along with what seemed to be repairs all the time, we decided to buy new. Our last 3 cars have been new, we now have over 425,000 miles between them, and our total out of pocket repair costs since we started this in 2007 is under $2,000. This does not include oil changes, etc.

Some of the money we have been saving by not repairing cars all the time is in the bank. Add that along with some trade equity, and our next new car will not have much of a payment, if any at all.

If one is great with cars and can repair them, one can save on the used route. In our case, new is probably the better option.

 

[wendow]

We did Dave Ramsey about 10 years ago. One of the very best things we've ever done. Yes, we did sell an expensive vehicle ($19k) and bought a $3500 one that we paid cash for. I never regretted that decision. It allowed us to get ahead.

We were debt free, other than our mortgage, until earlier this year when our family vehicle became unrepairable (? sp). Due to a lot of medical expenses for one of our children, we chose to lease rather than buy a new vehicle. We never wanted to be back in the leasing a vehicle world and it feels so wrong after having gone through the Dave Ramsey program...makes me feel like a total failure!...but it was the way to get the lowest monthly cost. With our current medical bills, having a low monthly output on a car was huge for keeping us out of further debt.

 

[tvguy]

We used to purchase cars around 5-6 years old with 75K miles or so. Between the interest and payment, along with what seemed to be repairs all the time, we decided to buy new. Our last 3 cars have been new, we now have over 425,000 miles between them, and our total out of pocket repair costs since we started this in 2007 is under $2,000. This does not include oil changes, etc.

Some of the money we have been saving by not repairing cars all the time is in the bank. Add that along with some trade equity, and our next new car will not have much of a payment, if any at all.

If one is great with cars and can repair them, one can save on the used route. In our case, new is probably the better option.

It is clear I don't drive as much as some folks so keeping a car a long time is easier for me. One influence on me has been the companies I worked for. The last 3 run fleet vehicles 200,000 miles. They never are concerned about resale value, it almost always zero or a few hundred dollars if the salvage yard really wants that model vehicle. And they never think twice about overhauling an engine or a transmission. Our live trucks generally are run about 350,000 miles, but the total cost of those vehicles includes the modifications made to them, not in the vehicle. While the van may cost $30-40,000.........the real cost is the $150,000 in modifications.

 

[kymom99]

This had nothing to do with Dave Ramsey but we were talking at dinner last night. Back in 2007 I bought a used car and financed it. It was a 2003 but gave me a lot of trouble. We kept it till it was paid off and less than a year later the transmission went out. I opted not to fix it because of all the other issues it had, so I traded it in on a certified used car.
In 2008 my father died and my mom didn't drive so had no use for his car. We bought it with cash for my husband. It is a 2002 Buick and had 24k on it when we bought it. Now 9 years later it has 80k and my son is driving it. I'd say we got our money's worth out of it. We joked about it because in 2010 we were driving it to wdw and the service engine soonlight came on. After numerous attempts to remedy that, we gave up. My husband said you would think it would burn out eventually.
Buying used cars can be a crap shoot but if you look hard enough there are great ones out there. Both my step daughter and niece have bought used cars and they have had great luck. They both have kids and need to save money where they can. I can totally respect their choices since many young adults are defined by what they drive.

 

[crisi]

We buy ours used with no car payment. I think the wisdom of this depends on a few things:

1) What you can afford - if you can afford a used car with 60k miles rather than one with 160k miles, you'll probably get a car that lasts longer.
2) Are you capable of self repair or have a good, trusted and inexpensive mechanic. (We have the second)

You don't want to buy a car on its last legs - you are better off with a payment. Now, once your car is paid off you can drive it until it dies the death of an old car - particularly if you have a backup plan for getting to work before you can buy another reliable used car.

 

[hsmamato2]

I agree with a PP, in our family,we always had a decent car and a beater as our 2nd car. We always bought used, except 5 years ago when our 'decent' van was more trouble to keep towing and fixing than anything,so we went car shopping. The car we wanted was as much 2nd hand as it was brand new(remember,we were looking for our one reliable car) we ended up buying brand new (never done that before!) with 0% interest.... so we paid the payment for 3 years (doubled down on quite a few) and will drive this car until it become the next beater car sometime in the future.....(at least 15-20 years) our current beater car is a '95 subaru wagon that ds just 'bought' to use as his first car (he's so proud of that thing) for $200.00! So now we just 'borrow' ds's car if we need an extra,and use my car mainly. BUT......my DH is an awesome mechanic. This makes ALL the difference with older cars. (when he declared our old van too costly to keep fixing, we knew it was the end) I like a lot of Dave Ramsey advice, it does work if you want to be debt free. But not everyone wants to do this.

 

[arminnie]

People who buy my used cars are getting a good deal. I buy Hondas and keep them for about 10 years. Most of the time the mileage is 100K or less. I maintain them perfectly.

A Honda is good for way over 100K especially if well maintained. I have this deal with myself that I can get a new car if I've kept it for 10 years even if I don't need a new car. I get a new car because I just want to - someone else gets a good car for a great price.

 

[MomofDisneyLoversx3]

People who buy my used cars are getting a good deal. I buy Hondas and keep them for about 10 years. Most of the time the mileage is 100K or less. I maintain them perfectly.

A Honda is good for way over 100K especially if well maintained. I have this deal with myself that I can get a new car if I've kept it for 10 years even if I don't need a new car. I get a new car because I just want to - someone else gets a good car for a great price.

Have any Hondas to sell?

 

[LovesTimone]

DH went to the Dave R. seminar last year here in Orlando, he said it was really good and he did learn a lot to help tweak what we were already doing. We only have 1 car its a truck really a Tahoe, but DH has a company car so no payment, gas, insurance or maintenance on it. We bought our Tahoe brand new off the lot, we needed something to pull the boat with and wanted a lot of room, not to say that I did not get the best deal possible. We did our research and new want we wanted and what we were willing to pay for it. And we stuck to it what our budget was, then went in with we were going to pay less. Timing on a new vehicle is important, end of the year worked out great for us. For us knowing we have a warranty and there is nothing hidden wrong with it, it peace of mind for us.

 

[tvguy]

People who buy my used cars are getting a good deal. I buy Hondas and keep them for about 10 years. Most of the time the mileage is 100K or less. I maintain them perfectly.

A Honda is good for way over 100K especially if well maintained. I have this deal with myself that I can get a new car if I've kept it for 10 years even if I don't need a new car. I get a new car because I just want to - someone else gets a good car for a great price.

Upkeep is the key. Many mechanics say almost anything these days will make 250,000 with upkeep. Regular oil changes (I still do mine every 3,000 miles).......change the transmission fluid and fuel filter every 30,000 miles, and things should go well.

 

[TnTWalter]

....

 

[MrsJackSparrow4Life]

My car is already payed off and I plan on driving it until it completely dies on me. My fiancee's car is not paid off, however we discussed it and decided not to sell it and pay cash for a cheaper vehicle. His car was the only car in my family that didn't get stuck this last winter and made it to where we could get to work everyday and not use our vacation time on being snowed in at home. It was only $12,000 to begin with and the car payment is only $200 a month. Now if the payment was over $500 like some of my friends we would sell in a heartbeat.