The most important skill you will ever have is walking out of a dealership. I’ve had dealers refuse to negotiate. I walked. Salesmen who won’t give the total cost of the car. I walked. I once had a dealership add on an extra year to the proposed terms of a loan just because they thought I was that stupid. I walked. You do not have to go through with the purchase unless it’s what you agree to. Don’t be pushed, pulled, bullied, enticed. You can walk. Just walk. WALK.

@tarablue4472

Ай бұрын

That skill will carry over into other areas of life also. I walked out of a gym that insisted I get a membership. This gym absolutely refused to let me pay as I go. They would just lower the membership fee. She even called in the manager as if I was a recalcitrant child, manager came and talked down to me as if I was misbehaving for not going along with this plan. They lowered the fee again and again but never agreed to just let me pay as I go. So I walked out and they never made a penny from me. Years later I was reading complaints about this gym and how many people were getting ripped off by them. Glad I learned how to walk out of a bad deal.

@daveassanowicz186

27 күн бұрын

Or just walking, then you don't need a car

@cowboydelnorte3078

27 күн бұрын

“Just Walk.” I love it

@tyjordan1821

24 күн бұрын

Pops told me that…. Never be afraid to walk

@YoungCheeno

24 күн бұрын

One more step and I'm walkin'!

I haven't had a car loan in nearly 20 years. When I finished paying off my last car loan, I started taking what had been my monthly payment and putting it in the bank. I drove that car until the wheels fell off, so to say. By the time that car was no longer functional, I had enough money saved up to pay for a new car in cash. I haven't had a car loan since.

@zo_471

Ай бұрын

I did that too but I put mine in the stock market. Now it’s grown to six figures and I don’t want to touch it to buy a car

@getinthespace7715

Ай бұрын

Yep. I calculated out the cost of buying my used truck with a 7.5% interest loan over 5 years... ($721/month) Instead, I did exactly what you did. Put $500/month away in a money market for 5 years. With today's interest rates, you end up at $36k saved. The loan costs 44.2% more. 1. Always pay cash. 2. Never buy new, unless you are literally getting the vehicle at an insane deal for less than the cost of a used one. My truck deprecated 40%, $24k in the first 2 years of ownership from new. I picked it up as a lease return with huge savings. It's insane to think you save 84% of the cost of a vehicle by buying used a few years old, and paying cash.

@jonathansaindon788

Ай бұрын

This is the way

@AdmanToronto

Ай бұрын

@@zo_471 Well done. Never use a savings account to save.

@stuffbenlikes

Ай бұрын

Over that period of time wouldn't putting it in an index fund have made a lot more money, rather than just letting it sit there earning minimum interest?

I make $200k and drive a $15k used nice car. I don't have to worry about finances at all. I work at a prestigious law firm. I still drive a Cadillac and everyone is blown away I don't even pay more than a couple hundred for 2 cars! My mortgage is $2000. People who make 5x my salary are so stressed about finances... You can get a nice car that is reliable for less than $20k. My Cadillac has very high reliability ratings according to all the reputable car sites. The freedom I have to eat out whenever I want and not even think about a $200 date night with my wife is marvelous.

@Hidden2u

Ай бұрын

Very similar story - I make $275k base plus 20-25% bonus, drive a 2011 Honda and a mortgage/taxes/maintenance under $1,800.

@V8Brah

Ай бұрын

All it means is you don't enjoy driving and cool cars

@Hidden2u

Ай бұрын

@@V8BrahThat’s one thing it tells you, but def not all it tells you. 🙃

@KNRS927

Ай бұрын

@@Hidden2u All it means is you have other priorities in your rich life that you choose to spend lavishly on. And then you cut back on things you don't care for like the transportation device.

@Hidden2u

Ай бұрын

@@KNRS927 Again, that’s one (or another) thing it tells you, but it’s def not “all” it tells you!

I did the same thing up until 40 years old. I had $2,000 cash to my name and a mortgage payment. Now at 60 I have a million liquid, a duplex paid for and generating $50,000 annual. No credit card debt or car payment. I drive a 18 year old Silverado. My house is almost paid for that is worth $600,000 and to mention the duplex worth $700,000. I listened to Dave Ramsey and was were very focused the past 20 years. Stop trying to impress people you don't know or like.

@m.b5777

Ай бұрын

Can I know how much was your yearly income over the years

@Jeez001

28 күн бұрын

To be honest you have the money to afford a good car. Where it is goes bad is folks who don't have the $$ buying 100k vehicle..

@MrTwade2006

26 күн бұрын

I so agree with you. Dave Ramsey did it for me too. Totally debt free. God is good to us first and foremost. I could never have gotten to a point of no debt if it were not for Him

@safeandeffectivelol

15 күн бұрын

@@Jeez001 Put $100K into the S&P500 index fund and $100K into a new car and see how much each is worth after 10 years.

I sell cars, and you are so accurate. As another insider tip for those who catch this comment, don't burn bridges. Don't tell any other dealer you're going with a specific offer until it's over. This gives you the power to walk. 9/10 times if I pick up the phone and a person says "I'm at your competitor, they gave me this offer over but changed the terms on me when I got in," I'll beat their original offer. Any negotiation you go into you are so so so much more powerful if you can genuinely walk from the table.

@Brick1978

28 күн бұрын

Guess who wrote "When in negotiation; always be in a position to walk away from the table " ?......Donald Trump, in his book, "The Art of the Deal".

@AllInVehicleInspections

7 күн бұрын

Advice I give my customers too. You can always walk away as their are always more cars out there to buy.

This is exactly the reason why dealers almost have a heart attack and their faces go sour when they hear you want to pay the full price upfront and don't want to auto finance your car. 😂 Don't tell them upfront, leave that to the very end after they tell you the price of the vehicle and be willing to walk away if they try to change the price of the car after you tell them you are paying the full price upfront.

@RabianskiT

19 күн бұрын

Their „faces go sour” because they can see all the INTEREST they will be deprived of 😂

It is very hard to see project which can be used in real life like AMS120X 🥳🥳🥳

The reason I like Ramit is because I live his philosophy. I mercilessly cut costs elsewhere (meal prep, no drinking/smoking, cheap hobbies etc) so that I can spend extravagantly on my car. I spent about $30k for a BMW 340i and I’ve had it for two years now- I love it. Yes it is fully paid off. It can work, you just have to be mindful of your budget!

@tomaszp2027

Ай бұрын

Hell yea, more power to you. I feel that this is how the CSP is supposed to be used (and I'm not a car guy)

@rocioiribe5841

Ай бұрын

yep this is exactly how it's supposed to be, being FULLY aware of what you're spending you're money on and budgeting accordingly.

@toonnaobi-okoye2949

Ай бұрын

Damn, that sounds like a steal for a BMW post-covid

@randombandit362

Ай бұрын

Did you buy used? Did you pay for it with cash? I think paying 30k all at once would be too much, it’s almost better to put half of that down, then get a short little loan for the rest. Then take the remaining 15k and invest it.

@jonm.678

Ай бұрын

@@randombandit362 it was used. 2016 that I bought in 2022. I traded in my WRX for about 22k and financed the rest with a low interest rate. The payment was like $150 a month. I paid the minimum until I had the lump sum and just knocked it out in less than a year. Easy peasy.

I saved 84% when I bought my truck by doing 2 things... 1. Buy used, 2-4 years old after the vehicle has deprecated 40%. Still under warranty, 30k miles or less. Find a good deal on a lease return. 2. Save up your money upfront and pay cash. It takes 5 years to save $36k at $500/month. A 5 year loan at 7.5% interest for the same amount costs $721 a month. Paying cash saves 44%. Drive a vehicle for at least 10 years to get your value out of it. Avoid luxury brands with high repair costs and poor reliability. Some luxury brands are great deals used... Acura, Lexus. They are essentially upscale Honda and Toyota with great quality that can be purchased used for similar prices to used. The luxury brands just deprecate faster because they are bought/leased as status symbols and offloaded after a few years for another new vehicle.

@MNP208

Ай бұрын

Yep, we've always kept our vehicles for ten years... then we sell them to our kids.

@carmenhealer4635

Ай бұрын

44% off 60% is 26.4%. You saved 66.4% off the total price of a new truck. But you saved 100% 5 years later by not buying another new vehicle. Good job.

@camdenmounts1473

Ай бұрын

$500/mo x 5 years = $30k. $721 for 6 yrs is still correct, but recalculating down to 5 years brings the monthly payment to $601. Paying cash saves 20%. The principle is still there.

@johnyang1420

Ай бұрын

Smart

@katiegarces

Ай бұрын

100% perfect, that’s exactly what we do

Dad once told me "son, never buy a vehicle that cost 50 percent or more than your yearly salary"

As a former car rental GM, we closely monitored the TCO of every vehicle. BY FAR, the most affordable cars to own were Toyotas. This factors in long term depreciation (purchase price minus sale price divided by length of ownership )fuel mileage, maintenance and repair. Camry and Corolla were about half the cost of similar sized gm/ford/dodge, about 20-30% less than other Japanese makes of the same class, and about 3x cheaper than European cars of the same class.

@LatoyaWatson

Ай бұрын

I drove my Corolla for 17 years. I finally replaced it with a Camry. I hope to keep it on the road for just as long.. if not more.

@NicoleLLewis

Ай бұрын

Been driving my (base model) RAV4 for 7 years. Other than basic maintenance, no issues. My plan is to keep her for a minimum of 15 years.

@BrayanCCG

Ай бұрын

I'm 21, my first car is a Toyota Matrix from 2003 and I love it, it's not a fancy car by any chance but I've had just small fixes on it and it's super efficient, probably gonna stay with toyota for the rest of my life lol

@JessicaChungMN

Ай бұрын

Oh wow!! 20% less to own than even a Honda?!

@tigerlounge

Ай бұрын

Yup - until recently both me and my husband drove 20+ year old toyotas. only upgraded one when my Dad stopped driving and we bought his newer vehicle.

Dear Ramit’s video editor: please compile all clips of Ramit’s epic meme faces and put into a clips compilation. It will generate the subscriber equivalent of compound interest.

@mr_don_rowe

Ай бұрын

I'll buy an Apple Vision Pro if someone can make a "disappointed Ramit" face pop up in my field of view whenever I'm about to make a dumb money decision.

A few years ago I took my son and friend's kid fishing. I was driving my 4 year old truck and saw a brand new Trail Boss. I said that's a nice truck I would love to have one. The 8 year old said why don't you buy one, can you afford it? I said I can keep my current truck and pay cash for that Trail Boss. He said then go buy it. I said you can't save money if you buy everything that is shiny.

@lowlowseesee

Ай бұрын

he won't forget that, great work yo

@ehderguyyashootadeerorno2313

Ай бұрын

@@lowlowseesee I hope not. He was adopted by two women (lesbian). One is terrible with finances and the other is okay at best. Hopefully the cycle doesn’t continue.

@GlamGoddes101

Ай бұрын

@@ehderguyyashootadeerorno2313 I chuckled because u put lesbian in parentheses like someone couldn’t figure that out 😂

In the end, someone spends so much money on a car for it to be parked for 40 hours a week while you are inside working.

@Madchris8828

Ай бұрын

Lol yep

@Madchris8828

Ай бұрын

Lol yep

@ttmc573

Ай бұрын

Oh my God yesssss 😆

@barose1

Ай бұрын

So many people i know have insanely long commutes, it's the 2-4 hours a day they *need* that car. Without a reliable car, there is no job. Life is a scam. 😂

@Madchris8828

Ай бұрын

@barose1 I don't know how someone can commute for 2 to four hours. I'd go insane 😂

A friend of mine was leasing a car for $750 a month a few years back. He was happy that every 3 years he'd trade in and get a newer car with all the fancy stuff the car had. I'm old school, I buy and hold a car for over 10 years. Anyhow I was shocked and told him if he'd save/invest that 9,000 a year for like 10 years that would be over $90k with interest. Life changer. He finally bought one of the cars he was leasing. Now he lives in a hotel at 60 years old, didn't invest much all those years. He will most likely have to work until he can't anymore, sad.

@sn4rl277

Ай бұрын

Leasing a vehicle is the worst, it's called a Car Fleece for a reason.

@pauls9011

28 күн бұрын

​@@sn4rl277for some people leasing is not good. Agreed. I lease and the reason I lease instead of buying is by the time I turn the vehicle in I have not paid for the major repairs like brakes, belts, etc. My wife and I budget our miles so for me is good

I had to replace my old car (totalled). Found a used one I liked, an upgrade year and model of my old one. Hubby thought it was a great price and wanted me to hurry and buy before someone else does. I waited until the price dropped and I offered 10% less. Dealership said no. Waited a few days and emailed the other shift manager…said I noticed it was still unsold, would you accept $$, plus waive all fees. He said yes….I drove away for thousands less. Negotiate and remember, there will be other cars, don’t get vested in one specific car. Get yourself an awesome deal instead.

Thanks for sharing PEPE and AMS120X. 💯

Every KZreadr has been talking about this lately. Answer is simple , just buy a used Toyota - corolla, camry, tundra/tacoma, or sienna - depending on your needs. Low cost of maintenance. They all can last up to 300k and sometimes beyond. They're comfortable and just work.

My first 3 cars $500,$1000,$3000 . That last car I was earning $50k in year 2005. Ended up buying my first house before buying a brand new car.

I have needed to replace my truck for 5-6 years, but at today’s prices, even if I had $150k in cash, there is no way I would buy one. I run a welding shop. I need a truck for work. I simply will not pay 70-120k for a truck that realistic should be 20-50… it is insane and I am floored that there are people willing to pay it…

@Erick-di9gm

21 күн бұрын

It's all relative. A homeless guy can't believe you buy food at a grocery store!

Hey Ramit! I want you to know that your videos are making impact. I binge watched your videos the first day i came across you on KZread and my life changed. I was almost $30k in debt. In less than 5 months, I've cut it to less than 20k. On tract to completely be debt free by 2025, God willing. Thank you for sharing your knowledge.

I'm in my 50s, have owned 4 vehicles since my first one at 16, and have never had a car payment. Every month put a couple hundred in a high interest savings account. When the car dies after 10-15 years, use the saved money to buy another car and continue making payments to yourself to save for the next one.

@SmithTacActual

Ай бұрын

What interest accounts do you use? I just opened up a Roth through USAA

They stole 2 cars out of my complex parking lot. My car was left with windows down by mistake and nothing was stolen. it's a 2008 . I love it. It makes me feel safe from thieves. I get flyers on it all the time " We buy junk cars". I save them. lol

@chapman1569

Ай бұрын

We have 2 plug in car, they are not hip enough to steal, lol, I love it.

@jeffcarhart2555

Ай бұрын

Yup, same thing in my neighborhood. My 2005 was unlocked and they left spare change in it for me!

@smileychess

Ай бұрын

I drive an early Nissan Leaf. It’s one of the ugliest cars on the market. It accelerates faster than most cars, and is pretty nice to drive. But no one would ever bother to steal it.

@traveljunkie3946

Ай бұрын

​@@jeffcarhart2555😂

@patrickprendergast9589

Ай бұрын

how about framing the offer

I paid $600 for my 1986 Camry with 177,000 miles. It’s a nice clean car and does everything I need. I have no one to impress. I have no shame. Since I spent years in almost all phases if construction, and real estate investing, I learned how to have a nice home with tile, and antique variegated white oak floors, floating coffered ceilings, and beautiful cabinetry. It’s less than than $100/month. I enjoy life and don’t blow my money on stupid stuff to impress people I don’t know.

We decided not pay for our only car in full. We put 50% down, got a 2.49% interest rate for 72 months ($520 a month), invested the money that we didn't use, took that money plus other money a year later and used that as a down payment for a second house. Our car payment didn't hold us back. It also didn't stop us from reaching a 7 figure net worth last year. We don't care about depreciation since we are not planning on selling the car.

My dad buys a new car, drives it for 7 years, then gets a new one. He keeps a savings account to cover the difference between new price and the sale of the old car, but it's still the 3rd most expensive way to drive, after an auto loan or lease. I bought a 12yo Toyota and drove it for 13 years. He was talking up his new car, and I said sure, but mine is super cheap to insure, as good as his on gas, $50/year to register, on average $400 of work a year. The look on his face. His muttering in wonder: "it's practically free..." I knew my husband was The One when I saw he drove a base model Yaris. He did buy it new, and we paid the loan for years. But he drove it for 17 years, giving us time to sock away enough money to buy our next two vehicles outright, even though we needed to replace earlier than hoped, even at an inconvenient time.

99% of the time that big ass truck is used to carry 4 grocery bags in the passenger seat 😈😈

@keithspernak6456

Ай бұрын

Probably more like 100%

@bigjude100

Ай бұрын

Plus $ 70 a week for gas😂

@calebmelton5989

Ай бұрын

And that's ok.

@truckercowboyed2638

Ай бұрын

The great thing about America is people are allowed to buy what they want without your approval,

@ThriftyCHNR

28 күн бұрын

@@truckercowboyed2638most countries are like that anyways

I proudly own a 2012 Chevy Malibu. 122k miles. Get’s me from A to B. Yes I do have repairs on it each year but I also enjoy having $672 dollars put into my Roth 403b each month even more!!

I am turning 33 this year. I drive a 2021 Prius L Eco which I purchased brand new in 2021. I negotiated the rate from 4.9% to just under 3% for 60 month. The car gets 51mpg compared to the 28mpg that my 2013 Corolla got. I drive over 30k miles per year and save over $6500 in gas (compared to my Corolla). The car is practically paying for itself as I do my own maintenance and change the oil/filter every 10k miles. It’s the best vehicle purchase that I have ever made. The 2nd best was the 2013 Corolla which I purchased new for $15k (end of December) and sold for $7200 with 190k miles. I don’t try and impress anyone and couldn’t care less about what other people think of me.

@chapman1569

Ай бұрын

I spoke to Prius owners that had their original hybrid battery changed when it became less efficient, they were very satisfied. We own PHEV's, the gaz mileage is great however I expect a very large expense when the hybrid battery will need to be replaced. The Prius is a great choice.

I bought my "first" car (with my own money and no parental help)- a 2016 Toyota Prius w/ 30K miles - in 2019 for ~$24,000 when I got my first job out of graduate school but I was dumb and did a 5 yr loan at 7%. Thankfully that loan is up, my Prius is at only 75K miles and kicks butt in the gas department. I'm driving it until I can't drive it anymore.

Bought my FIRST new car at age 65 because I could pay cash (but financed at 0%). My kid could buy any new car/truck he wants (and pay cash) but at age 28 he has used trucks and an old model car. I see so many people driving BMW's and big trucks and they're in deep debt, struggling to make rent. It's insane. Calculating maintenance and gas is critical. The same calculations must by considered when buying a house but no one ever runs the REAL numbers! This is a subject no one but you wants to address Ramit. Too many people dump their identity into what they drive.

Poor people buy things to impress people they don't like.

I bought my 09 Honda Civic Hybrid back in March 2014, $13,000 payments $358. Fast forward - we're at 406,000 miles and only had the catalytic converter work. With lots of thanks and prayers I have money investing so when The Good Lord leads me to that car I'll be set!! 😊

@tigerlounge

Ай бұрын

posted above - I have a 2004 Scion xb that just (knock on wood) won't die. Gotta love simple, fuel efficient vehicles.

@sw6118

Ай бұрын

I’m at 170,000 in my 2009 Toyota Rav4. I love, love, love this car. It’s needed a new starter…that’s it. It’s SO reliable. I’m SO happy with it.

My Kia Soul of 13 yrs with 200k plus mile finally bite the dust. Lucky I've been putting aside for the last 5yrs. Thanks for helping me plan ahead Ramit because I'll be paying cash when I find one I really like.

@jrg_lmnop

Ай бұрын

Please buy a Toyota or Honda this time lol. 200k is nothing.

Every financial channel I've seen is talking about car payments being a wealth killer. Lots of people are talking about it in general.

@margie909

Ай бұрын

Yes, poor choice of wording for the thumbnail.

@patty109109

Ай бұрын

Dave Ramsay’s most favorite saying “sell the truck”.

@laundrygoddess4

Ай бұрын

@@patty109109 it's right up there with beans and rice and rice and beans

@handleyobusiness

Ай бұрын

People can talk about this same topic all day long, and most people will still purchase cars on payments. It’s way too commercialized today for most people to get ahead financially.

@laundrygoddess4

Ай бұрын

@@handleyobusiness it's not even bad to use payments. But following simple rules like the money guy rules of 20% down, pay off in three years, and no more than 8%of your income really help keep it in line.

Great advice. When I was 21 and started my career, I went right out and bought a Corvette. After realizing what the payment and insurance was, the thrill lasted about 5 months and I was like "what the hell did I just do?" After trading it with a friend, I've driven used cars, fully payed for, all my life. Now I was able to buy my first brand new car with cash. I own 4 cars, 3 of which bought used, and all owned free and clear. When you're young, you've got to drive beaters if you want to build wealth.

I also think that a lot of times you’re better off paying a bit too much for the right car than getting a great deal on the wrong car. About 12 years ago my wife (then girlfriend) paid a bit too much for a used Honda Civic and on the same week my brother got a “great deal” on a Chevy Malibu. The Civic recently got passed down to my daughter and is still working hard for the family.

I worked in the auto loan game, and man it was so hard to explain to people why the dealer was screwing them over. People get hyper focused on the Rate and not on the Rate + the Price and how they work together to screw you over. So many people paying more money just to have a 0% APR next to their loan. Also if you absolutely HAVE TO get a new car every few years then you should just lease your car. Because you won't get the benefits of owning unless you run your cars into the ground. Leasing isn't great, but it's a better deal than perpetually having an auto loan payment.

Best decision I made as a young man was to invest an initial $1,000 in mechanics tools at Harbor Freight. I then watched youtube mechanics to learn how to do basic maintenance on my 3 cars. Brakes, Suspensions, Radiators, Oil changes, etc...are easy to do with a little know how and the right tools. I have saved an absolute TON of $$$. My Chevy , Dodge, and Pontiac are respectively pushing 300k,275k, and 200k. All of my close friends who bought luxury cars almost instantly regretted it..The main thing that hurt them was they couldn't keep up with the maintenance. Nothing looks worse than driving a luxury car thats dinged up and limping along...it screams that you couldn't afford it in the first place...Tools and knowledge are Independence. Recently saw a dealership charging $100 to change and engine air filter and $80 for the cabin filter. They are preying on older single women for sure. Ladies...You Can Do it!

Know what you want and plan to keep it. I’ve had four cars (civics and Subarus) that have crapped out in the last ten years. I normally chose sensible and low cost but have been paying a lot for upkeep of older cars. I’m now about to take a car loan out and still feel bewildered. I think I have more insight now. Thanks @ramit

No car payment for 18yrs and it’s the best. Shared this with a friend who is looking to buy a car soon.

I bought a used Ford Fusion for 2,000 in November 2020. It is definitely a temptation to buy another, prettier car but I will run this vehicle into the ground. My goal is to get to 400,000 miles(I am at 340,000). I will be using the info you shared when I do buy a vehicle-especially negotiation! I didn’t even know you could do that so thank you!

@dougk1115

20 күн бұрын

I think Fusions are great looking! Congrats. Oh, and I drive a 2001 Lexus LS430 with 346,000 miles. Bought it new in December 2000 and now enjoy low monthly maintenance costs with no more depreciation. Plus, still LOVE it! Keep it up!

Thanks for another informative video! One thing that I learned and surprised me is that you are a hilarious dude (it's not just what you say but also how you deliver it)! 🙂 You messages on personal finance are insightful and informative. People do stupid things with their money that make them suffer financially, but many (not all) honestly don't know better and good advice/information like this content helps! Keep up the good work, I am a big fan!!

I'm a Texan. The number of people I see who own trucks, and drive 99% of the miles in them with no other passenger or cargo is ridiculous. I've literally had people tell me when gas prices were high that I was "lucky" that i drove a car that got good gas mileage. The disconnect between people's decisions and their effects on their lives is huge.

Awesome video man! I have always had a similar philosophy about car-buying (because I really don't care about cars but the US forces you to have one in most places), and reading/watching you has been great to have a more informed way to look at it. I'm definitely taking notes for the next time I need to buy a car. I don't currently own one (got rid of it recently) but I know I'll eventually have to get one. I'm reading your book and I'm excited to get to the part about negotiations for when that time comes. Sidenote: The only thing I can complain about your videos is that "habanero" doesn't have an Ñ in it, please just say habanero, habaÑero drives me crazy 😂 Kindly: a native Spanish-speaking viewer.

I have a 2016 silverado LT. Paid cash for it. It's at the sweet spot of works perfectly but if it gets a scratch I am not going to over worry

Great video and your calculation on how much car you can afford could never be more true. I would like to share and over looked cost because maintenance can be broken down not just to schedule services out also pricing out wear and tear items and theirs cost. Big heavy hitters include: vehicles with specialty tires, timing chain vs timing belt, and complete brakes overall costs. Also looking at a cars major consumer complains especially when buying used cab also save you a lot of money. Hope this was helpful. Grateful for your content.

Came for the comments from everyone telling us how they haven’t had a car payment in x years. 😅 Great video. I’m guilty of the “what’s the payment” mentality. But you live and learn. Now I look at the total cost. Car Edge is a great resource for maintenance, reliability, etc

Hello from South Korea. When I came here from Central Asia country I have earned $2500 per month and still was in debt. Last year our gross Income was about $12.000 per month and we were still in debt. Watching your videos and applying your advices with my wife for 2 months gave me relief. We are still in debt but it is already less that it was. We managed to make our fixed costs to 60,9% and we are going to make it 50%. Thank you, Ramit for your videos it helps a lot even many miles away

20/3/8! Put 20% down, finance for no longer than 3 years, and the payment shouldn't be more than 8% of your income

@OspreyHomeInspection

Ай бұрын

Money guy rules 😊

@problematicpolarbear6065

Ай бұрын

aim for 100/0/0

@tamararoberson8060

Ай бұрын

​@@problematicpolarbear6065The math is not always on your side paying cash for cars, especially if we're talking about new or late-model used/cpo car. It does free up cash flow if you need it but if your APR is under 5%, that money can be better used elsewhere. There are bank fees to start any loan but only counting interest, if you have a $50k car (becoming a lot more common), a 3% loan is $125/mo in interest but just putting the money in a HYSA instead nets you 5%, or $200/mo. So you're losing $75/mo by paying cash. The purpose of putting 20% down is to cover sufficient depreciation that you should be able to avoid being underwater in case you need to sell your car. It also ensures you buy a car within your means - if it's hard to save up 20%, you can't afford it.

@aditiseshadri6560

Күн бұрын

​@@problematicpolarbear6065p

Sinking whole paychecks into my previous 20 year old vehicle to keep it running was a wealth killer too.

Hello Ramit, Can you also do similar to this but about house purchase

@ramitsethi

Ай бұрын

This is a good idea, I don't think I've talked about housing enough

I only saw the notification on my lock screen & didn’t take note of the channel name. I thought I was clicking on a true crime video about THE WEALTH (serial) KILLER! 👻💀

Problem is, most American made cars are junk over the past decade. I bought a 2019 Ram, and plan to keep it for the rest of my years. Hope to keep er running.

The one thing you didn’t mention was the possibility of buying a newer used car. Our last purchase was a 2017 Honda CRV that we bought in 2018. It was used as a courtesy car by the dealership and had only 5000 miles on it. I’m not sure about other parts of the country but here in northeast Ohio these one year old vehicles are usually available in March and April and the dealers want to move them.

So subscription to manage unwanted subscriptions? Bro, you’re a genius 😅

Lots of people are talking about this, and the ridiculousness of big trucks.

Good points! Thanks...

I came across your videos while just doing some random search on KZread and subscribed it same day. I like your approach. I was trying to put my numbers in your sheet to see how does it look like for me and how i can improve my financial situation. For asset part, i wanted to check where you will keep the house. I bought mine 4 years back and due to hike in property i have 50% equity in the home now. Should i consider that 50% as an asset? Thank You

I agree cars are a wealth killer, but can we stop with the “why is no one talking about x?!”. Every financial KZreadr has talked about cars being a wealth killer.

I wasted so much money in my youth on cars that I did not need. I cringe when I think about it now.

@Madchris8828

Ай бұрын

Probably most of us did. It was for me at least a couple grand. And come to find out I was one of the more responsible spenders in my early 20s

About 5 years ago I bought a 2014 Honda Accord for $15k. Did 60 month term. (Interest was almost nothing) and threw whatever cash down I needed to in order to get my payment to $200/month. Again the interest is almost nothing.. I had the cash to pay the car in full.. but interest at that time was almost 0…. I’m okay with that. Also wasn’t a brand new car.. 70k mile Honda Accord that was well maintained..

Great video and info! It’s sad that more people don’t realize that buying a car isn’t something you should walk into lightly, or blindly. But, that’s what you’re here for! 😊. Also, loved the info about the Fighting Chance website.

Worst mistake I have ever made. Aiming to pay off In 17 months and keeping for as long as possible.

@jrg_lmnop

Ай бұрын

I hear you. You’ve already made the first step in the right direction: admitting you were wrong.

For boomers and senior citizens, the current market and economy are unnecessarily harder. I'm used to simply purchasing and holding assets, which doesn't seem applicable to the current volatile market, and inflation is catching up with my portfolio. My biggest concern is whether I'll survive after retirement.

@Jamesbrown1126

20 күн бұрын

Just buy and invest in Gold or other reliable stock , the government has failed us and we cant keep living like this.

The bidding war was crazy. Thanks for this advice.

I managed a luxury car dealership for seven years. During this time, I observed that 90% of our customers were not financially capable of affording the vehicles we sold. Regardless of whether their annual income was $200,000 or $60,000, many were essentially living paycheck to paycheck. However, as long as their debt-to-income ratio was within acceptable limits, we were typically able to secure their financing approval. People lose all sense when it comes to getting the car they want! And to top it off, the same people come in every 2-3 years wanting a new car just because.

I bring up this fact to people who own huge houses in the suburbs, then condescend to me about renting in the city. I don't need to own a car.

Very good video. Ramit. It’s very important for people to know that you are not what you drive. My family just bought our first car, brand new, in cash, in full. My kid is 7 yo. We waited the purchase until we have achieved a nice wealth. Before now, we took Uber, cab, metro and bus. The comfort brought by a car is true luxury in a small metropolitan in Asia, where we live. Our car is a entry level luxury car. It costs a small % of our wealth which is lower than risk free interest rate. So we go for what we like. We plan to keep the car for as long as we can, hopefully more than 10 years and after my kid grows up. Our quality of life improves tremendously after the purchase. We can go camping, picnic and cycling more with comfort and convenience. We are enjoying such luxury and the more active and quality family time.

Thank you for all your videos and book. Would it better to put extra money towards paying off car than putting that money aside to invest?

I had read about Ramit’s tip for the bidding aspect and tried this a few years ago and will definitely use it again when I buy in the future. Side bonus - by emailing the dealers you tend to get the internet or fleet sales folks that are more transactional and don’t tend to play the games some salespeople do.

What we do is we buy a new (or newer) vehicle every 4 years. First we buy her a new vehicle, we trade in the old one paid off title in hand plus a sizeable check. Buy a basic to mid grade vehicle, finance it for 72 but pay it in 36ish (that way if we hit a hard month or two we can drop the payment to $300 or whatever). Once that one is paid off then we buy me a new truck and do the same. This way we always have a newer vehicle. The last year and a half we have had zero car payment which is very nice. Never ever ever ever ever roll negative equity (you are digging a deep debt hole).

I agree with the thesis, but take issue with the idea that "nobody is talking about it". Pretty much everybody in the personal finance space has been beating this drum for literal decades now. I distinctly remember reading about this when I graduated in 2000, and you can probably copy-pasta the exact same article every year with updated numbers. Heck, I'm pretty sure I remember reading about this in Ramit's blog back in 2010-ish.

My sister bought a used car with cash, and now I am trying to do the same. Right now my transportation costs are $0, with my job I take public transportation for free. I am focusing on paying off my debt, which will be done at the end of the year. I am saving in the meantime. I tried to tell my mom how to afford a car, but her reply was "so I am supposed to buy a piece of shit car!". My dad is paying 2 car payments for my youngest sister. I agree, seeing how people get cars is painful. I love your Netflix show, please make a second season!

Preach brother

I've driven cheap old junky cars and trucks my whole driving life, and they have gotten the job done many times. They've also cost me lots of money, time, stress, irritation, missed work and opportunities .....and here, I finally am able to buy a nice truck a few years ago ( still for ALOT of money, during the hyperinflated world timeout ) and already she needs another engine 🤨🤨🤨 I'm doing what I have to do to get by, but can't wait to figure out how all of this will build my wealth 😂

The cardigan 🔥

@mjojco

Ай бұрын

It cost $23k

@_melts

Ай бұрын

@@mjojco paid for with the money saved on not having a car loan 😅

@mjojco

Ай бұрын

@@_melts BINGO!!

Ramit, when you told the dealerships you were ready to buy in two weeks did you tell them you were paying cash or did you finance it? I saw a video where a guy said to negotiate the price then tell them you're paying cash or if you have to finance it, then get a quick payoff quote and then pay it off

couldn't agree more. I no longer have car payments for many years now. I buy used Hondas or Toyotas in good condition with cash, have my mechanic check them out first, and keep them for decades. cost of repairs and cost of ownership much better than buying new.

Cars are not a wealth killer in the same sense vicuna sweatpants are not. High interest loans are. Buy them if you can afford them, preferably with cash, and move on. In CSP you can also put the car in both savings (save that cash) and also in guilt free spending if that's what's your idea of fun.

@chukuemekaoje1015

Ай бұрын

Sadly, most people aren't buying cars with cash and moving on. They're financing them, often with little to nothing down (sometimes rolling in negative equity), for increasingly longer terms (72 months is becoming the norm). Plus they are absolutely buying more "car" than they can afford. And then they are trading them in after a few years. For those reasons.... Ramit (along with other finance folks who say this) are right: Cars are a wealth killer (for the reasons listed above/in practice).

@tomaszp2027

Ай бұрын

@@chukuemekaoje1015 A lot of people are also buying groceries and random other items on CC and paying minimums, but we're not saying that those items are wealth killers.

@cooledcannon

Ай бұрын

well the vicuna sweatpants would be a wealth killer if they cost tens of thousands of dollars

@chukuemekaoje1015

Ай бұрын

@@cooledcannon 1. Waaaaaaay more people buy cars than Vicuna clothing. 2. Not sure you can finance Vicuna like you can a car. 3. Most people don't need Vicuna (it's a want). Most people need cars. The comparison is not appropriate.

Lmao literally EVERYONE says this

@pradeepmodukuri

Ай бұрын

What do you expect a magic bullet point? Success principles are the same regardless of who says it

@mannsolo6294

25 күн бұрын

Somebody thinks it's funny to stay broke

I’d love to hear your thoughts on buying vs leasing a car.

thanks!!!! 🙏🏾 ❤

Thanks

I financed my used car (8k) at 18% after graduating college. I know it’s a smaller amount compared to other car purchases but to me it was a huge deal because I was scared of being in debt. I paid it off in under 3 years always paying almost double the minimum payment. I’ve had that car for almost 7 years now and my car insurance is only $75/month. I’ve had several promotions and salary changes since then but I’m still driving my paid off car 😊 An acquaintance told me the other day she pays $600/month for car insurance 😮 she pays more than 6 months worth of my car insurance in one month. But of course it has to be a nice shiny car.

I don't care about cars, I just need one that works. I chose the cheapest, economy class suv and paid it in full 6 years ago. The car is still going strong. I expect it to last at least 10 years. This has afforded me a lot of financial relief and has made my life a lot less stressful.

Great video. I can't tell you how many 60k + trucks i see in my city hauling nothing but air. I'm going on my 5th year without a car payment lol. It all comes down to ego, once you can set aside your ego you can truly master your own finances. That's the biggest lesson I have learned in my life. Awesome vid!

I run a small flooring business. I drove 15 year old Astro vans, (with 180,000-200,000 miles) for a decade. In 2019 I took out my first car loan, on a 2018 Nissan NV200 compact cargo van, with only 28,000 miles on it. I purchased it for $17,000 and paid it off in less than 3 years. It still has less than 100,000 miles on it and I intend to drive it for at least 4-5 more years. It gets 24 mpg and with regular maintenance, is the most reliable vehicle I’ve ever owned.

This is great!! Thanks so much for all the info you put out. When I was looking a couple of years ago I walked out of a few dealerships. Nobody wants to budge because they know someone will walk through those doors willing to pay what they are asking.

Thank you

I bought a new Honda CR-V in 2020. 0.9% APR. The car depreciates about half of American made car. As a fellow financial advisor, I agree wholeheartedly with your premise. Expensive new vehicles cost far more than you realize. Especially when you consider Time Value of Money and what those payments would be over 20 or 30 years.

I'm 23 now and have a car loan I REGRET SO BAD!! My dad walked me into the dealership and I trusted him to do all the paperwork. I "just" wanted a car and got years of debt in return. Since leaning how to better handle money I've refinanced for a better loan but my advice: dont be impatient. YOU CAN BUY A CHEAP, NICE CAR FLAT OUT. DO NOT GET A CAR PAYMENT. When my car is paid off i'm driving it till it falls apart...and then some.

Ramit, your content is fantastic, I truly enjoy it. I am currently working with my own finances to succeed, is there any advise on how to get out of bad debt while have a huge car payment and being under water/upside down with negative equity? Please advise! 😢

I’m not satisfied with the answer of fitting the monthly payments into 60% fixed cost ratio without other guardrails. What stops someone from thinking like in your example that it is ok to pay $600 for 9 years. I think you can get more specific with affordability. Like how much down payment is reasonable to have? 20%? How long should loan term be (in my opinion no more than 48 months). I think if a car falls inside all these parameters then it’s ok to buy it new or used. Thoughts?

This video comes in handy for me. Towards the end of this year I’m leaving my company to go full time into my own business and I have a company car.. I’m looking to keep my monthly expenses as low as possible

I completely agree. I've never had a car loan, have only driven cars paid for in cash for 15 years ago I went car-less. That and keeping rent costs as low as possible are how I can sometimes save a thousand dollars in 1 month on a $40K salary (gross). It also means I can rent out the parking spot that comes with my apartment for $70 per week. Costs for an occasional shared car (like zip car) are included in my guilt free spending because driving is a luxury and not a necessity now. The car share companies have BRAND new cars and fully electric cars like Teslas, so I get to drive very fancy cars that I'd never purchase myself on the regular, WITHOUT any of the hassles or costs of insurance, maintenance, charging/petrol, parking, WOFs, registrations, etc. I previously thought about getting a car again but the thought of re-introducing all of that back into my life completely turns me off the idea. No regrets.

If you’re gonna buy new, or used, buy a Honda/acura, Toyota/lexus, Subaru or Mazda. Low tco, holds value better than most and you’ll typically be able to get to 15 years/300k no problem. Also: maintain your vehicle. Most engines, even from these reliable makes, employee turbocharging, or direct injection. Keeping on top of maintenance and making sure you’re not putting shitty gas in these cars is essential. I’m not saying pump premium, I’m saying make sure you go to top-tier gas stations, like bp/quicktrip/shell/exxon etc. The extra additives keep direct injected and turbocharged engines cleaner for longer, and help reduce carbon buildup.

Would these tactics work when buying a used car? I hate the idea of buying new because of depreciation. But used car dealers have ridiculous markups. Or should you always just do private sales if you want to buy used?

Between my wife and I, we bought several cars with car loans and one with a home equity loan. But, we negotiated every car's purchase price, and then figured out the loan. With my first car, I worked with my bank, borrowing a pre-determind amount of money, and then went car shopping. I knew I had X available as a downpayment and had to get the price to X plus loan amount.

Great video! My last vehicle is new and I got it middle December for about $5k less than the value and I am about 3 years in and actually it’s worth the same amount I owe. I also have. 3.75% interest rate before rates more than doubled. The next time I buy I will check out your tips regarding negotiating! I am holding off for now in hopes that rates drop sooner than later!