fast-tl

Guys, I found this link that describes how to avoid car payments and still be able to trade UP in vehicles frequently. Does this sound viable? If so, it may be one of my resolutions!

http://www.youtube.com/watch?v=iIgLyl66QxQ


http://www.daveramsey.com/etc/lms/drive_free/player.cfm

What do you guys think of the two plans?

S A CHO

It's a simple plan that makes sence. Save the money that you would be making car payments on, and in time you'll have enough money to fully pay off a slightly used car...

Seems like a no brainer

FiftyFive

:thumbsdow Can i have my 3:30 back?

iTimmy

I saw Dave Ramsey in the title and decided to save a few minutes of my life.

dallison

meh

Ken1997TL

:crickets:

teranfon

I laughed when he got the part where he stated the average mutual fund return was at 12%.

Terry

neuronbob

I like the Berlina Black S2000 at the end of the ad. *biased*

Anyhoo...duh, if you don't have a car payment, of course you're paying the money to yourself to make another down payment.

Trackruner228

iTrader: (1)

Stock Market average of 12%

Although I do love having no car payment. Also nothing in life is free.

GreenMonster

I bought my cls and put half down, paid it off within a year. I haven't had a car payment since 2003, so I've been saving up for the next car. Don't know if I'll ever buy new again, or just buy a slightly used car next time and let someone else take the depreciation hit.

I had a tbird before my CL that I bought used (14K miles) paid that off in 5 years, but drove it for almost another 4 years. Used the savings from not having car payments to save up for a downpayment on the CL.

Probably going to buy used next time, or if it's new, something for under $25K.

Ken1997TL

Though I will say certain Alberta oil companies pay nice dividends even with oil at 30 something a barrel.

minkl81

iTrader: (2)

totally waste of 3+ mins...

fast-tl

Wow, are are you guys already debt-free or something? I'm not getting the Dave Ramsey hatefest... also seems like you're throwing out the baby with the bathwater.

Brandon24pdx

Except for my car, no I don't have any debt that lasts longer than a month. I don't hate Ramsey...I think his brand of kool-aid does help a lot of people and sometimes I listen to his show.

It would be a good idea to never carry a bank note on your car...worth acheiving I'd say, but the "car money" comes out of your monthly budget whether or not you send it to the bank or into your own savings account, so "drive free" might come off as a little misleading.

The main benefit to his strategy is the interest you'd save by not having a car loan, and the interest youd gain by keeping it instead in savings. A sound strategy IMO, but cars will still always depreciate no matter how you buy them, so there's never a free lunch.

synth19

I'll never buy a higher end car new. Used is the way to go on a luxury car.

bkknight369

whether or not the interest rate point is right or not, it is a good tactic to not be in debt infinitely

dallison

i like how that 6k car is still worth 6k after 10 11 months

fast-tl

I believe the idea there is to buy well, e.g. get a deal when you buy with cash, so you may buy a $6K car for less and sell it for what it's worth after your short ownership when you upgrade. Again, maybe it's not an exact science, but you get the point. It's certainly better than the alternative!

AznX TL

i don't see how its driving free.
you're making high car payments for crappy cars.
you wanna know the secret to driving nice cars every couple of years? its called leasing.

juniorbean

iTrader: (5)

Saves a ton of money, allows us to get into higher end cars while some other sucker takes the depreciation hit, and it's been great not having a car payment since 2005

FiftyFive

This video is very elementary and isn't applying anything new at all.

Regardless whether your paying it to yourself or not, a car payment is a car payment

ChrisQ1980

In my experience $1,500 cars that are reliable, and cheap to maintain are hard to come by. Especially while driving it for 10 months. I also doubt you can re-sell it for $1,500 after that. Then you have to worry about the $6,000 car being trouble free as well. Buying used is taking over someone else's headache. It's not as easy as it looks. The concept is good, but the reality of it is poor. It's going to be hard to pay yourself $464 every month when you will need to spend all or half that on repairs.

fast-tl

Nooo way. 8 months ago I bought a 1982 M-B 300sd for $2000 and I've put less than $500 into it since then for maintenance, and this car is rock solid. The best part is when I now search fro this same car on Craigslist, they're listed for roughly $2000 (or MORE) all day long. So I think the naysayers should do more research. I also think Carmax would beg to differ that "buying used is buying someone's headache." They sell more than a few used cars every day witha pretty good reputation. Are you related to a new car salesman?

If you're spending $464 a month on maintenance for a used car, you don't know JACK about buying cars!

I know it's easy to justify a car payment, but the reality is they're just not necessary.

FiftyFive

Both good points but if you are paying or saving $464 a month for a car I believe it is still a car payment, either way you look at it.

fast-tl

How so? One ADDS to your bank balance (saving) the other detracts...once the payment goes to the bank, the dough is gone. If it's in your bank, YOU get to decide when or if to spend on the curretn vehicle or a new one, or go on vacation instead. That's the point of not being in debt.
Believe me, I'm not fully cured. I am presently resisting an '06 CLS500, but I'm concentrating on the opportunity cost of making that purchase vs. saving.

ChrisQ1980

You found a good car for a good price, but the reality is people don't sell cars for $1500 with ALL scheduled maintence done just before the sale. They make it so it runs decent. I like to get in my car and drive, not having to worry about what will have to be done. The maintence on my current car is easily planable according to my paychecks. I'd rather pay $400 a month for a nice new(er) car that has better safety technology than save a few bucks, especially if I'm involved in an accided where my TL would have saved my ribs/and chest but instead drove a 93 Integra and be in the hospital for a month.

A better way to buy a car is to buy one brand new, take out the extended warranty pay it off in 5 years, and drive it free for another 5 years. Then sell it and put whatever you get as a down payment on another new car. I don't feel like buying $1,500, $4,000, $8,000, #12,000 cars for a period of 4 years.

No, I'm not related to, nor am I friends with a new car salesmen. I just like to buy nice, relativly new cars, that look good, are reliable, and are easy to own/maintain. I don't want to hunt 6 months for the perfect USED car. Not everyone that buys a used car gets a cherry.