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Dave Says Sell the Stupid Cars, Love the Lovely In-Laws
Townhall.com ^ | February 26, 2013 | Dave Ramsey

Posted on 02/26/2013 2:31:01 AM PST by Kaslin

Dear Dave,

I’m 27 and married, and we have two kids. I make $90,000 a year, but we have $80,000 in consumer debt—$48,000 of which is in car loans. The rest is credit card debt. My wife’s parents have offered to let us move in with them so we can get out of debt faster. Do you think this is a good idea?

Kevin

Dear Kevin,

If I were in your situation, I would not move in with the in-laws. You’ve got an absurd amount of money wrapped up in those cars. I’d sell the stupid things, start living on a budget and paying down debt, and keep my dignity.

In my mind there are only two scenarios where you’d even consider taking the in-laws up on their offer. One is where they’re absolutely wonderful people and you have a great, non-toxic relationship with them, where everyone involved knows their boundaries. Even then, I’d only consider this if it were for a very short, agreed-upon amount of time.

The second scenario would be if moving in with the in-laws were the only way to accomplish your goal. And you don’t pass that test. You guys can get out of debt pretty quickly if you’ll just lose these ridiculous cars! Think about it. If you had two little paid-for beaters, your lives would be so much different. You could even save a little money on the side while you were paying down debt and buy a better car as soon as the debt was gone.

If you can’t tell, I’m pretty big on maintaining dignity. You might love your cars so much that you’re unwilling to make the sacrifice. Not me. The money going into your automobiles is insane, and that’s your biggest problem!

—Dave

 

Dear Dave,

What do you think about the HARP program, and what exactly is it?

Ivy

Dear Ivy,

The Home Affordable Refinance Program is designed for people who have made their payments on time but are underwater on their mortgages. Being “underwater” means they owe more on their homes than the homes are worth. So basically it gives them the opportunity to refinancetheir home loans.

The HARP program is the only part of the Clinton administration’s Making Home Affordable program that actually worked. And to be honest, it has worked well. In contrast, the recent Home Loan Modification program is a piece of junk and all about political posturing. About 93 percent of the people who applied for a home loan modification didn’t get one. It was just another case of the governmentpretending to do something.

I’d advise looking into the HARP program if you’ve got a good credit history and you’re underwater on your current home. Lots of HARP program applications are being approved, and the deals are closing. That’s what really matters when you find yourself in a situation like this.

—Dave


TOPICS: Business/Economy; Culture/Society
KEYWORDS: daveramsey; debt; money; ramsey
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1 posted on 02/26/2013 2:31:06 AM PST by Kaslin
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To: Kaslin

Gotta love Dave!


2 posted on 02/26/2013 3:00:52 AM PST by gattaca ("Great things can be accomplished if you don't care who gets the credit." Ronald Reagan)
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To: Kaslin

No mention of his last name but this has to be Dave Ramsey.


3 posted on 02/26/2013 3:24:06 AM PST by svxdave (Life is too short to wear a fake Rolex.)
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To: Kaslin
... and keep my dignity.

There ain't much of this left in America these days...

4 posted on 02/26/2013 3:30:35 AM PST by Elsie (Heck is where people, who don't believe in Gosh, think they are not going...)
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To: Kaslin

At least you didn’t post him giving investment advice ...

DAVE RAMSEY SAY : “Put everything in diversified (di-worse-ified) growth stock mutual funds and never buy real asetts like gold or silver , if you have any SELL IT”

When is he going to figure out that there is no growth in this economy and that his numbers (average 8-12% a YEAR!) are a joke... he needs to hire a REALIST for his investing advice ... NOT EVEN DAVE RAMSEY takes his own investment advice , he buys REAL ASETTS , real estate ...


5 posted on 02/26/2013 4:03:25 AM PST by Neidermeyer (I used to be disgusted , now I'm just amused.)
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To: Kaslin

You’ve got an absurd amount of money wrapped up in those cars.


$48,000 is absurd? He needs to check modern car prices.

Don’t get me wrong. I have one car payment on a $10,000 loan, but you don’t get a lot of car (even used) for that kind of money. And $90k was ok money where I lived in Seattle. Here in central KY it makes you one of the “rich”.


6 posted on 02/26/2013 4:28:52 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: Kaslin
If you had two little paid-for beaters

Trouble with those two little paid-for beaters is that they require repairs at random intervals, that can be expensive. Sometimes you can ignore those repairs (most people don't care about suspension repairs unless the car is unable to move), but dead alternators, transmissions, transaxle shafts, blown heater cores (very expensive to fix), tires, etc, can be expensive and random. At least with a payment, you have a set amount every month that you're paying, a known quantity, so that you don't have to come up $1,500 out of your pocket on a Tuesday afternoon.

That said, $24k apiece for their cars is a lot, IMHO.

7 posted on 02/26/2013 4:32:47 AM PST by Hardastarboard (The Liberal ruling class hates me. The feeling is mutual.)
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To: cuban leaf

It sure is if he only makes $90,000 a year and has $80,000 in consumer debt. You don’t need a car with all those gadgets. I have a 2004 Chevrolet Cavalier which I bought in 2006. It has automatic transmission, air conditioning, and air bags for the driver and front passenger seat, but no power windows or automatic key lock. It is all I could afford when I bought it. Oh yes it has also a theft devise that I believe the previous owner had put in


8 posted on 02/26/2013 4:41:13 AM PST by Kaslin (He needed the ignorant to reelect him, and he got them. Now we all have to pay the consequenses)
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To: svxdave
Of course it is Dave Ramsey.

Look at the top of the page below the title to the right of the date

9 posted on 02/26/2013 4:45:51 AM PST by Kaslin (He needed the ignorant to reelect him, and he got them. Now we all have to pay the consequenses)
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To: cuban leaf

One pickup truck today can cost $48,000 dollars, he has 2 cars for that. I would say that isn’t off the wall, still it is a lot of money, but if he drives a fair distane he needs a reliable car.

Today there are no back lot mechanics who will fix your car cheaply. If you take your car to a person who has no computer skills and little training working on the model of your car you will get stung.It isn’t unusual to pay $75. to $100 dollars an hour to have your car worked on.

When your car stops today there is little sense in raising the hood , there is nothing there that you can do, Just call the tow truck another $ 200 shot to hell.

My wifes old car became unreliable it was a Buick Roadmaster from 1994, I bought a new Toyota Venza that isn’t m,oaded with goodies and has a 4 cylinder. The old Roadmaster —Heavier, bigger, powerful 350 LT engine,got better gas mileage. I almost cried.


10 posted on 02/26/2013 4:54:58 AM PST by Venturer
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To: Kaslin

Good advice on the cars. I have never financed a car. I just bought a 2006 Toyota Camry with only 80,000 miles on it for $7800.


11 posted on 02/26/2013 5:02:43 AM PST by Drawsing (The fool shows his annoyance at once. The prudent man overlooks an insult. (Proverbs 12:16))
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To: Neidermeyer

I respect Dave a lot, but he has painted himself into a corner on this gold thing and will go over the cliff with flags flying. While he has been trashing gold, others have been laughing all the way to the bank.


12 posted on 02/26/2013 5:09:28 AM PST by MachIV
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To: cuban leaf; Kaslin
kaslin->You’ve got an absurd amount of money wrapped up in those cars.

--------------------------------------------------------------------------------

$48,000 is absurd? He needs to check modern car prices.

What's absurd is buying a new car. You lose 50% or more of it's value in the first three years, well before you're done paying for it.

NEVER buy new unless you can pay cash and will be keeping the vehicle for 10 to 20 years or so. It's just not a wise use of your money.

I drive a 2000 Montana van that I bought for 12,000 in 2004 (let someone else eat the depreciation). It's paid for. If I spend 2400 a year on repairs (and I don't) I'm still way ahead of the guy who's paying 350 or more a month. With the amount of miles and the amount of use I figure it will serve me well for at least 4 more years.

My other vehicle (my boat pulling truck) is a 1998 Durango. Paid 7500 in 2006 for it. It's also paid for. I figure with the miles on it, and the amount of use it gets, it will serve me well for another 10 years or so.

Take good care of your cars and run them until they can't run anymore. Why spend money lining the pockets of obama's allies (GM or Chrysler).

I will admit that I bought my boat new. But I custom ordered exactly what I wanted and will have the boat until I die (pontoons don't go bad).

13 posted on 02/26/2013 5:15:53 AM PST by John O (God Save America (Please))
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To: MachIV

Gold can not always go up and like with everything else what goes up must come down. So if gold goes down, what then?


14 posted on 02/26/2013 5:26:41 AM PST by Kaslin (He needed the ignorant to reelect him, and he got them. Now we all have to pay the consequenses)
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To: Hardastarboard
Trouble with those two little paid-for beaters is that they require repairs at random intervals, that can be expensive. Sometimes you can ignore those repairs (most people don't care about suspension repairs unless the car is unable to move), but dead alternators, transmissions, transaxle shafts, blown heater cores (very expensive to fix), tires, etc, can be expensive and random. At least with a payment, you have a set amount every month that you're paying, a known quantity, so that you don't have to come up $1,500 out of your pocket on a Tuesday afternoon.

That said, $24k apiece for their cars is a lot, IMHO.

Do the math. Are you really going to spend $14,000 in repairs on a $10,000 car over its lifespan? No way. My wife and I are in the habit of buying used cars in the $5000 to $10,000 range. We pay cash for them, and we maintain money in an INTEREST BEARING account, standing by for the day when a car needs repairs. Sometimes I do the work myself, or my father-in-law does the work, and all we pay for is the parts.

We never have a monthly payment for a car. We're making money on interest, and the bank isn't. When one of our cars breaks down, we get by with one car instead of two for a while. If there are things going on that really require two cars, we rent one.

If the repairs are going to be really expensive and time-consuming (meaning a blown engine or transmission), we sell it on Craigslist to the highest bidder, and we go out and buy another one. It isn't hard to get $500 or $600 for it, because we always buy popular vehicles like the Ford Taurus or the Chevy Blazer. Somebody's always looking for a parts car to fix their own. Or they have a working engine or transmission, and they want to buy a car to put it in.

And we spend a lot less on insurance too, because we only pay for liability insurance, not full coverage.

Even if you don't do some of the work yourself, you'll still save $8,000 to $12,000 a year.

15 posted on 02/26/2013 5:28:03 AM PST by Bryan
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To: John O
... Take good care of your cars and run them until they can't run anymore. Why spend money lining the pockets of obama's allies (GM or Chrysler).

Exactly. Your whole post covered a lot of the points I didn't. Change the oil, check the oil and coolant, rotate the tires, and learn to watch for little problems that are cheap and easy to fix, before they become big problems.

16 posted on 02/26/2013 5:32:31 AM PST by Bryan
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To: Kaslin

I understand Dave’s point about the cars.

But he neglects to mention that most people are underwater in their cars the minute they drive off the lot.

You can’t exactly short-sale a car like you can sometimes do a house.

If the couple is already in financial trouble, where are they going to get the money to make up the difference in the loans to unload the cars?


17 posted on 02/26/2013 5:50:45 AM PST by chrisser (Senseless legislation does nothing to solve senseless violence.)
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To: Kaslin
Gold can not always go up and like with everything else what goes up must come down. So if gold goes down, what then?

The actual value of Gold(or silver for that matter)doesn't change. The reason gold is so high now is because of the very low value of the US dollar. If Gold goes down it will still buy the same amount of goods for the same volume of gold(in other words an ounce will buy the same regardless of the "price" of gold)because the value of the dollar will have gone up. It is simple once you figure it out. Buying Gold, actual gold not gold on paper, is a very smart move and will pay off big for those who do if the SHTF.

18 posted on 02/26/2013 5:58:28 AM PST by calex59
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To: cuban leaf

$48,000 is absurd? He needs to check modern car prices

- - - -

The price isn’t absurd. But keeping that kind of car debt while choosing to live with In-Laws due to debt so you can keep that debt is absurd.


19 posted on 02/26/2013 6:19:37 AM PST by thackney (life is fragile, handle with prayer)
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To: Venturer

When your car stops today there is little sense in raising the hood , there is nothing there that you can do, Just call the tow truck another $ 200 shot to hell.


I used to think that. Then I discovered, back in the early 90’s, the computer codes. Every car I’ve had since then (except one) has been a Chrysler product. They all allow you to see your codes without any tools.

I had a mid 80’s Omni that simply stopped running one day. I discovered the codes as it sat in the garage for a couple of months. Nothing would give it spark and I had pretty much given up. I checked the fault code and it said some electrical part was bad. I found the part (looked like a little relay under the hood), paid the $19, installed it and the car started right up.

Then, a 1987 Reliant. Stranded my daughter at work. Code said “bad map sensor”. I got one for free from the junk yard. Installed it in five minutes and it started right up.

2001 300m: Starts missing bad. Fault code says bad coil on number 5 cylinder. I replace the coil ($45). Problem fixed.

For most problems (even transmission related), modern cars tell you what is wrong with them. If your “check engine light” is literally your car telling you there is a problem and it pretty much knows what it is. It’s just waiting for you to ask.


20 posted on 02/26/2013 6:45:25 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: Venturer

Today there are no back lot mechanics who will fix your car cheaply.


There were few in Seattle, where I used to live. They are all over the place where I live now, central Kentucky.

And again, the computer stuff is easy. It tells you what’s ailing it. ‘Course, it may be telling you that you need a new transmission...


21 posted on 02/26/2013 6:53:46 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: John O

What’s absurd is buying a new car.


When I was looking for a Scion xB in 2006, I wanted a used one. Problem was, used ones were almost as expensive as new. I bought new. I borrowed the money. (btw, you can get car loans now for just a couple of percentage points.)

I drive 122 miles a day to work. The car now has 115k miles on it and has never left me on the side of the road. That has hard value. I’ll replace it with a new car. And I can get one for my purposes for well under $20k and I’ll drive it into the ground too. I’m done with used.


22 posted on 02/26/2013 7:05:51 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: Kaslin

It sure is if he only makes $90,000 a year and has $80,000 in consumer debt.


When I read that, my first thought was “the ‘cars’ part of the consumer debt is not the problem.” The cars probably have an interest rate that is less than 1/3 of the consumer debt rate.


23 posted on 02/26/2013 7:08:38 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: Bryan

Do the math. Are you really going to spend $14,000 in repairs on a $10,000 car over its lifespan?


For me it is something else. It is driving 122 miles to work every day on back roads with no cell service. Reliability is “priceless”.

I have not been stranded by a car in well over 20 years. Back in the days when I drove “inexpensive used cars” it happened enough to be a major headache on more than one occasion.

Then there is the piece of mind. You don’t even think about the possibility.


24 posted on 02/26/2013 7:13:31 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: John O

Take good care of your cars and run them until they can’t run anymore.


Yep.

I had a Chrysler Lebaron convertible that I traded in for $500 on my Scion in 2006. The car needed a new roof, a new transmission, water pump, the front end could not be aligned because it was too worn and the car had 150k miles on it.

Our 2001 Chrysler 300m that we bought new has 180k on it. The AC is out and needs a part that is very expensive to replace. We reduced our insurance to the minimum, FOUR DAYS BEFORE A DEER RAN INTO THE SIDE OF IT AND WIPED OUT EVERY BODY PANEL. The check engine light is on because the transmission is in need of repair. The one year old front tires are in need of replacement because it won’t take an alignment.

We’ll be trading it in for $500 or so on probably a Kia Rio or Ford Focus. New. And we will repeat the cycle.

The AC and reliability is a big deal where we live.


25 posted on 02/26/2013 7:22:38 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: calex59

I’ll add to your post that silver is actuall a metal being consumed by industry. Heck, they put it in socks now, for it’s bacteria fighting qualities.


26 posted on 02/26/2013 7:24:27 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: thackney

The price isn’t absurd. But keeping that kind of car debt while choosing to live with In-Laws due to debt so you can keep that debt is absurd.


I agree with that one. Frankly, the fact that they are asking the question shows that they really have not grown up yet.


27 posted on 02/26/2013 7:25:25 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: Kaslin

I make $90,000 a year, but we have $80,000 in consumer debt.
That’s insane he must be a democrat,he needs to learn how to save money not spend it all.


28 posted on 02/26/2013 7:44:14 AM PST by Vaduz
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To: cuban leaf

You are the exception that proves the rule. You keep your cars so long that the instant loss of value while driving off teh lot doesn’t really affect you.

Most folks who buy new trade off every three years or so. They are always underwater on their cars and never seem to learn the lesson.

While I still think you get a better deal by buying used I don’t think you are too far off because you hold the vehicle a long time.

I’m just too cheap to take that depreciation hit. (And I’ve only been stranded once in 35 years because of a mechanical breakdown. Wheel bearing went out. The other three were still in perfect shape.)


29 posted on 02/26/2013 8:36:07 AM PST by John O (God Save America (Please))
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To: John O

I’m just too cheap to take that depreciation hit.


Well, it sort of depends on the car. I mentioned that I bought my Scion new because used wasn’t all that cheap. Now, if it had been a BMW...

One thing that is hot around here is “salvage” cars. They touch on that issue about resale value. They are a GREAT deal for someone like me who uses a car up. I actually just got a “mint” 2006 Chevy Silverado quad cab 4x4 for ten grand. It had been salvaged about three years ago (proved its reliability). I got it because our 13 acres is a plateau that you enter from the valley below. My driveway takes up up 80’ in the first 100 yeards or so.


30 posted on 02/26/2013 8:58:29 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: John O

BTW, that Lebaron convertible I mentioned... Bought it used for $5500 with 75k miles, put another 70k or so on it and traded it for $500. I got my money’s worth. And the car was a blast.

Meanwhile we paid $31k for the 300m and put 180k on it so far. No matter how you look at it, it was not as good a deal. As someone mentioned, $10k will buy a lot of repairs. Unless you drive a BMW or Audi, that is...


31 posted on 02/26/2013 9:02:32 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: cuban leaf

Are you talking about flood cars?
There are thousands of Sandy cars on internet auction.
I’ve wondered if maybe the flood damage isn’t nearly as bad as reputed, because these days the electronics are pretty well sealed.


32 posted on 02/26/2013 9:02:36 AM PST by nascarnation (Baraq's economic policy: trickle up poverty)
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To: nascarnation

Not flood cars. Just cars that have been in accidents. Sometimes it is amazing what little damage can total a car. I know a guy locally that makes his living buying and reparing them to “like new” condition. He then sells them for thousands less than they would otherwise cost. He’s doing the body work on my Scion right now (some guy backed into the front of it in a parking lot.)

He’s selling one of those new 2012 fiats with just a few thousand miles on it for ten grand. It looks and drives like brand new. It would be a good commuter for a guy like me, but I need something with a longer wheelbase. The big advantage of those, like smart cars, is their “urban friendly” size. It’s not an issue here. I need something that can cruise comfortably at 70+ for long distances.


33 posted on 02/26/2013 9:09:29 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: cuban leaf

Thanks.
Good call on the Fiat, those are just too small and the gas mileage increment isn’t that much (if any) over larger cars.
Italian design with Mexican manufacture.


34 posted on 02/26/2013 9:13:50 AM PST by nascarnation (Baraq's economic policy: trickle up poverty)
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To: nascarnation

...and the gas mileage increment isn’t that much (if any) over larger cars.


I’ve noticed that with cars like the smart car and the new Scion. They get slightly better mileage than cars like the Kia Rio, but are squirrelly on the freeway and have very little room. For my commute, the longer the wheelbase, the better. And room for the 7 hour drives to Chicago and 12 hour drives to the eastern seaboard.


35 posted on 02/26/2013 9:17:17 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: cuban leaf

I think owing $48,000 on two cars is absurd.

SPENDING that much may not be, but if you have to borrow the money, you shouldn’t do it to buy two cars that cost you that much in borrowing. I bought two brand-new Prius cars, for a total of about $48,000, but I paid cash for them both.

The problem is, I don’t even know if they can get rid of those cars and pay off their loans, because cars depreciate so fast.

I agree with you about how sometimes the old beat-up cars can be a drain on your pocketbook and your sanity — that’s why at some point I decided to get two brand-new cars, pay money for two comprehensive 7-year warranties, and then I didn’t have to worry about my cars for a decade.

On the other hand, if you can buy a $1000 car that falls apart after one year, every year, you’ll come out a lot better than if you buy a new $20,000 car and have to borrow $19,000 to pay for it.

Of course, you can’t buy a beat-up car anymore, they got demolished by Obama to as part of his plan to make poor people suffer and be more dependent on the government.


36 posted on 02/26/2013 10:54:28 AM PST by CharlesWayneCT
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To: CharlesWayneCT

I think owing $48,000 on two cars is absurd.


It may be, but it is ridiculously common. Frankly, if it were not, the auto industry would be a shadow of it’s current self.

I tend to agree with you. That being said, when you can get a car for 2% financing, you are not paying much in interest over the life of the loan.

And I like to put it this way: If there were no such thing as credit, the motorcycle, motorhome, snowmobile, stereo and myriad of other industries would be mere shadows of what they are now. So would the employment numbers. The reason we’re in the mess we are in is that the credit overheated. To be blunt, a business that refuses to borrow to establish itself simply can’t compete with those that do.

Credit is a two edged sword.


37 posted on 02/26/2013 11:10:42 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: CharlesWayneCT

Of course, you can’t buy a beat-up car anymore, they got demolished by Obama to as part of his plan to make poor people suffer and be more dependent on the government.


Heh, heh. Don’t worry, a lot of cars have gotten beat up since then. ;-)


38 posted on 02/26/2013 11:15:08 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: cuban leaf

Your point about business credit is right on.

In my industry we must purchase raw materials to sell. If I sell a $10K order, I will need to purchase $5K in materials. My customer will not pay until done, so I must borrow to produce. Simple.

The reason the home mortgage industry even exists is because it is rare that people could save $100K cash. On the other hand, if there were no mortgages available, would homes still cost $100K?


39 posted on 02/26/2013 11:28:05 AM PST by Crusher138 ("Then conquer we must, for our cause it is just")
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To: Crusher138

On the other hand, if there were no mortgages available, would homes still cost $100K?


That is the problem. Ultimately, credit can be inflationary, especially if your money is fiat. The homes around where my parents now live were, during the bubble, valued at ~$275k. They are now valued at about $160k.

They were built when I was in high school (graduated in 1972). The “loaded” ones were advertised at $17,900.


40 posted on 02/26/2013 11:32:11 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: Hardastarboard

“Trouble with those two little paid-for beaters is that they require repairs at random intervals, that can be expensive. Sometimes you can ignore those repairs (most people don’t care about suspension repairs unless the car is unable to move), but dead alternators, transmissions, transaxle shafts, blown heater cores (very expensive to fix), tires, etc, can be expensive and random. At least with a payment, you have a set amount every month that you’re paying, a known quantity, so that you don’t have to come up $1,500 out of your pocket on a Tuesday afternoon.”

With cars like that the combined payments are going to be $800-900 every month. With savings like that one could afford a pair of new transaxle shafts every 3-4 months, a bi-annual valve job w/ tune up and new tires and a heater core once a year. Just put some money away for it. JMHO, but I drive junk, and I could pull $1500 out of my backside any day of the week.(because I don’t have a car payment)


41 posted on 02/26/2013 11:58:13 AM PST by READINABLUESTATE ("We must hang together, gentlemen...else, we shall most assuredly hang separately." - Franklin)
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To: cuban leaf
For me it is something else. It is driving 122 miles to work every day on back roads with no cell service. Reliability is “priceless”.

Well ... there's that. We hardly ever drive more than 20 miles from home and within that radius, cell phone service is perfect. Whenever we drive across the continent to visit relatives, we rent a car.

Within these parameters, driving a beater is just fine.

42 posted on 02/26/2013 12:05:10 PM PST by Bryan
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To: calex59

First, when the world is starving, nobody is going to give you a loaf of bread for a gold coin.

Second, in 1934, you could buy a car for $405, and an ounce of gold was $35. A good pair of shoes cost you $3.

Today, an ounce of gold is $1600, and a car is $25,000. The shoes? $50.

Gold has gone up 45 times.
The car has gone up 65 times.
The shoes, only 15 times.

So, shoes are a bad investment. Except that, if you had a pair of shoes and an ounce of gold in 1933, and put both of them in a vault, the shoes would be much more valuable.

It is interesting that people always compare gold, a single commodity, to the entire stock market, or the entire world investment market. They prove that gold is an above-average investment.

But compare gold to a specific stock, and you’ll find lots of stocks that outperform gold over any particular time period, except maybe 2008-2011.

And the entire market has outperformed gold in the past two years, although that could be a momentary thing. Gold is good today with Italy’s problems.


43 posted on 02/26/2013 12:15:59 PM PST by CharlesWayneCT
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To: Bryan

And one of my cars is a “beater”, for just that purpose. :)


44 posted on 02/26/2013 1:19:20 PM PST by cuban leaf (Were doomed! Details at eleven.)
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To: Bryan

And one of my cars is a “beater”, for just that purpose. :)


45 posted on 02/26/2013 1:19:42 PM PST by cuban leaf (Were doomed! Details at eleven.)
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To: cuban leaf

“We’ll be trading it in for $500 or so on probably a Kia Rio or Ford Focus”

And when a deer hits that?


46 posted on 02/26/2013 1:24:28 PM PST by AppyPappy (If you aren't part of the solution, there is good money to be made prolonging the problem.)
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To: MachIV

I respect Dave a lot..
****************************
I do too , but he is of the mind that this sinking ship just needs a fresh coat of paint ,,, his investment advice is stuck solidly in the past when the economy was vigorous... and the fact that he doesn’t understand the danger of the OUTRAGEOUS FORWARD P/E of this market while we’re stuck in neutral and sliding backward down the hill towards the very real cliff where we turn into 2007/2008 Zimbabwe ... The best anyone can do is save money (cash) ,, forget about debt (it’ll fix itself with 1000% monthly inflation) and gather REAL asetts. There might be a year or so left in the stock market ,,, Bernanke will make sure of that with his printing press ... or there might be a week ... There CERTAINLY won’t be a 10 year time horizon that Dave Ramsey predicates his investing advice upon. And like in Zimbabwe , that $100 investment may become “worth” $100 million but it won’t buy a dozen eggs... a single chicken would have been worth MUCH more.


47 posted on 02/26/2013 1:36:17 PM PST by Neidermeyer (I used to be disgusted , now I'm just amused.)
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To: READINABLUESTATE

Whenever someone says to me “My car payment...” I hear “I have a car I can’t afford”. They always think they can “afford” the payments until something goes wrong.

My sister drives a 2010 Ford Escape with a monthly payment and she works part time. She bought it to avoid a $1200 repair on her old car. That was 4 of her car payments. She has now become “payment poor” from all her monthly payments. Luckily she will soon be covered under Obamacare.

I have a 2003 Chevy Cavalier(paid $3k for it) with no car payment and I make 3X what she makes.

If someone is truly worried about the reliability of buying a beater, buy two of them. You still come out way ahead.


48 posted on 02/26/2013 1:36:35 PM PST by AppyPappy (If you aren't part of the solution, there is good money to be made prolonging the problem.)
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To: AppyPappy

And when a deer hits that?


Comprehensive, my friend. :-)

Actually, that one deer hit was a fluke. There was a steep wooded hill next to the road and about ten foot up there was a barbed wire fence with only a single wire at the bottom. Basically the big buck tripped over the wire and bounded down the hill into her car as it passed. In the 18 months we’ve been here we have not even had a close call since then, though we see lots of deer.

But yeah, deer are the one thing I watch out for as I’m bombing along the two lane roads at 80 mph.


49 posted on 02/27/2013 5:23:31 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: cuban leaf

You can get comprehensive on a beater as well.

The one thing I have found is that people buy cars they can’t afford(i.e. have to borrow to get one) because they feel they are entitled to them. Also, they feel the car payment insulates them from reliability issues.

People are funny like that.


50 posted on 02/27/2013 5:39:22 AM PST by AppyPappy (If you aren't part of the solution, there is good money to be made prolonging the problem.)
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