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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

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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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