$2000 In Car Repairs Later, I Learned Dave Ramsey Is Wrong
I am not the biggest Dave Ramsey fan, but I have taken a few pieces of advice from him. One is always to have an emergency fund. The other is (or was) to keep your vehicle until it is run into the ground.
According to Dave, people should buy used vehicles:
According to the bestselling author and radio personality, those looking to buy a car should aim their sights lower, older and cheaper.
“We’re not going to beat around the bush: The very best way to buy a car is to save up and buy a reliable, slightly used car (with cash),” claims Ramsey’s site, Ramsey Solutions. “You’re always going to be better off buying used and paying up front instead of going for the shiny new model that some overcaffeinated car salesman is trying to get you to borrow money for.”
For money experts like Ramsey and Suze Orman, there’s no rationalization for spending an enormous amount of money on something that depreciates so quickly. According to Carfax, cars lose 20% of their value in the first year of ownership and retain just 40% of their original value after five years.
My husband and I always tried to do that. We never had the cash to pay cash upfront. Except for my first car, which I paid in cash, we have always had loans.
We also always buy used vehicles, that have some mileage (like 20,000 miles) and do extensive research on brands and warranties. We find that Hyundai has the best warranty.
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