Dave Ramsey

I Was VB

Been watching his YouTube videos the last while and he’s very outspoken people getting into debt for new cars.

I’ve never bought a brand new car and even before I seen his videos I never would, partly bring a hungry pox with money and being interested in older cars.

https://youtu.be/_oG6mQ5rjFI

From where I sit I agree with him, but others might have a differing opinion on what he says.

Is he right in what he says?

bidiots

I agree with him

But if no one buys the new car, there is no secund hand car

Belfast

I Was VB wrote: »

Been watching his YouTube videos the last while and he’s very outspoken people getting into debt for new cars.

I’ve never bought a brand new car and even before I seen his videos I never would, partly bring a hungry pox with money and being interested in older cars.

https://youtu.be/_oG6mQ5rjFI

From where I sit I agree with him, but others might have a differing opinion on what he says.

Is he right in what he says?

In a word. Yes.
I have been a fan of Dave Ramsey for many years.

"The Dave Ramsey show debt is dumb, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice."

He has some great books and advice on money.
https://www.daveramsey.com/store/books

Idbatterim

I totally agree I mean I've said it here for ages , like what's the point I stretching yourself for cars that are all **** for the most part? They have no street cred, the vast majority. Their selling point is a piece of plastic with a number on it , and flogging genetic crap

Guy:Incognito

Borrowing doesn't have to mean stretching yourself.

If you can afford to put away x amount every month then buy a car 5 years later, it's hardly much different to borrow (or get interest free finance in some cases) and have the car straight away to enjoy.

If you go through most peoples spending I'm sure you could chalk quiet a lot of money spent off as a waste. People deciding to spend their money on a new car isn't any more a waste that whatever the next person spends it on. Plenty chose to spend the same amount actually killing themselves through smoking.

bazz26

Idbatterim wrote: »

I totally agree I mean I've said it here for ages , like what's the point I stretching yourself for cars that are all **** for the most part? They have no street cred, the vast majority. Their selling point is a piece of plastic with a number on it , and flogging genetic crap

So how do people buy second hand cars instead, if nobody should bother buying them new? And the vast majority of motorists out there don't give a toss about street cred when it comes to cars, it's just a transport tool. For a lot of people having a fairly fixed monthly budget cost for owing and running a car including servicing and maintenance, wash repeat every 3 years - makes a lot of scene. The same way they probably budget for living and feeding themselves. It might not be you or my way of owning a car but that's not to say it's wrong.

Idbatterim

bazz26 wrote: »

So how do people buy second hand cars instead, if nobody should bother buying them new? And the vast majority of motorists out there don't give a toss about street cred when it comes to cars, it's just a transport tool. For a lot of people having a fairly fixed monthly budget cost for owing and running a car including servicing and maintenance, wash repeat every 3 years - makes a lot of scene. The same way they probably budget for living and feeding themselves. It might not be you or my way of owning a car but that's not to say it's wrong.

they can buy them new, I just think its so environmentally ridiculous for a start. Also we dont manufacture cars, billions just go out of the economy to Germany, Japan etc. I am not saying nobody should buy new, but how many do you see on these programmes, that then struggle to send kids to college etc, and they review their budgets. The thing is, the irish government is so ridiculously dependent on motoring related revenue. They will likely have to introduce an emergency budget soonish, motor tax needs to be totally reformed. Diesel motor tax needs to shoot up for a start, as a percentage. Petrols should rise too...

To summarise, I just think for many , they think "oh I can afford it" but its such a poor use of money, for so many, the likes of that are now jobless or facing massively reduced living standards and for a slightly newer car? I just put a far bigger value on a proper roof over head, experiences, socialising, than a car. Like literally now , car expense would be the absolute bottom of my priority for my outgoings...

bazz26

Again one size doesn't fit all. Some people have a car out of necessity, they don't live close to work or close to their children's school. They don't have public transport on their doorstep either. Having a decent car for the job might be higher up these people's priority list than yours. And as for the Government and sending money abroad, we are a small nation and the only real home industry we have is the agriculture industry. Just because we don't produce cars here doesn't mean we are not consumers of them.

Guy:Incognito

Idbatterim wrote: »

they can buy them new, I just think its so environmentally ridiculous for a start. .

This comes up a lot, and often from people who wouldn't dream of cutting down other aspects of their life that isn't environmentally friendly or switching to buying all their goods 2nd hand.

Belfast

bazz26 wrote: »

So how do people buy second hand cars instead, if nobody should bother buying them new? And the vast majority of motorists out there don't give a toss about street cred when it comes to cars, it's just a transport tool. For a lot of people having a fairly fixed monthly budget cost for owing and running a car including servicing and maintenance, wash repeat every 3 years - makes a lot of scene. The same way they probably budget for living and feeding themselves. It might not be you or my way of owning a car but that's not to say it's wrong.

There will always be people foolish enough to buy new car for cash or on credit and be willing to sell them 2-3 years later for a lot cheap than they paid.
In the 1980s when not many new cars sold in Ireland, the Irish imported second hand cars from Japan.

edit
Assume there is a big decline in people buying new cars and most buys of new cars switch to second hand cars.
The price of second hand cars rise due to shortage and buys switch back to buying new cars. Supply and demand.

Self-made millionaire: Buying a new car is ‘the single worst financial decision’

A brand new car looks and smells good — but it’s never worth the price, says self-made millionaire and bestselling author David Bach.

“Nothing you will do in your lifetime, realistically, will waste more money than buying a new car,” he tells CNBC Make It. “It’s the single worst financial decision millennials will ever make.”

That’s because the moment you drive it off the lot, the vehicle starts to depreciate: Your car’s value typically decreases 20 to 30 percent by the end of the first year and, in five years, it can lose 60 percent or more of its initial value.

To make matters worse, “most people borrow money to buy that car,” says Bach. “Why would you borrow money to buy an asset that immediately goes down in value by 30 percent?”

The good news is, you can get a shiny, nice-smelling car without breaking the bank, Bach says: “Buy a car that’s coming off of a two- to three-year lease, because that car is almost brand new and you can buy it at that 30 percent discount.”
CNBC Make It: david bach
David Bach, bestselling author and co-founder of AE Wealth Management
Source: CNBC Make It

A car coming off lease is typically in very good condition and doesn’t have many miles on it. Because it’s not pristine, though, you can buy it for a fraction of what it would cost to buy it new.

If you’re still not convinced, Bach recommends thinking about how much a new car will cost you over the long run: “Here’s how the car companies get you: They want you to focus on monthly payments. And they’ll get those monthly payments down to you where you can afford it.

“Don’t think about monthly payments. Think about annual payments. Think about the entire term of the loan.”

He continues: “If you’re spending $500 a month for that car, well, that’s $6,000 a year, not including the car insurance or the gas. That could be two months or three months of your income. Run the numbers and then ask yourself: Do you really need a car that nice or could you buy a car that’s less expensive — maybe a little older — but still looks good and still runs?”
1:45
Kevin O’Leary: Don’t buy a car, do this instead

Bach isn’t the only money expert who feels this way. Personal finance expert and star of ABC’s “Shark Tank” Kevin O’Leary also warns against buying a new car.

“I use my phone to call Uber or Lyft, and they take me around the city. I save a fortune. I feel good about it,” O’Leary says. “I hate cars.”

And Suze Orman, who keeps her cars for 12 years or more, says to buy used and choose a model that you can afford over one that looks impressive. “One of the best ways to build financial security is to spend the least amount possible on a car that meets your needs,” she wrote in a 2017 blog post. “Forget about the bells and whistles you want. Paying less helps you pay off the car faster.”

Belfast

bazz26 wrote: »

Again one size doesn't fit all. Some people have a car out of necessity, they don't live close to work or close to their children's school. They don't have public transport on their doorstep either. Having a decent car for the job might be higher up these people's priority list than yours. And as for the Government and sending money abroad, we are a small nation and the only real home industry we have is the agriculture industry. Just because we don't produce cars here doesn't mean we are not consumers of them.

Indeed.
The interesting question in how much does buy a new car every 3 years compared to buy a 3 year old car a good second hand car every 3 years.

Mitch Connor

There would be people who get a car loan for a second hand car too. So not buying new doesn't mean you wouldn't be going in to debt.

The bigger value drop is an issue if you look at your car purchase as an investment. I don't.

As said above, if you can afford to save X for a car to buy outright within some timeframe, and can get a loan with the same repayment amount to buy the car now, then why wait to save the money?

Some people buy a car cause they like the car they are buying.

Toyotafanboi

The thing is, have cars just become too much of a disposable item?

Some people like to buy or need a new car, other people see no value or no need in a new car and buy used, nothing wrong with either of those really, the problem is the rate at which we do it.

Can we sustain a lot of people buying a new car every 3 years that otherwise wouldn't have? The long term result of this (that I cannot prove to be fact) is bangernomics. Ten year old cars, that are perfectly serviceable, in good condition, with years and years of life left in them worth virtually nothing.

The point is fair though, generally the less you can spend on the purchase and running costs of a car that will suit you, the absolutely better it will be for your wallet. This goes out the window a bit when it comes to car enthusiasts and people wanting, bigger cars, sportier cars, more powerful cars etc.

Mrs. Fanboi is on her 2nd PCP, it suits her down to the ground as she is on the road a good bit for work. New car, safe, reliable, warrantied, rinse and repeat after 3 years, a couple of hundred a month for predictability, all the mod cons and peace of mind. The suitability of it doesn't take away from the wastefulness of it though.

Me, I dont actually care too much what I drive and kind of regret my own Golf, looking back I probably should have bought a bangernomics from a financial point of view. Buying the right used car at a good price is hard to do but if done right and you get in and out at the right times shouldn't cost you an awful lot.

Belfast

I was looking at buying new car in August of 2017.
The Skoda Superb I wanted cost in the aria if 46,000 euro.
Even if I go 16,000 vet return as disabled car that would be at least 30,000 euro
In the end I bought a 7 year old Skoda superb ex Russian embassy for 10,650 with 62,000 miles on the clock.
The linage is now a 71,000 miles approx.
so far parts replaced one water pump and one battery. Battery that came with car was wrong size.
Buy second hand for me was a lot cheaper.

I Was VB

Belfast wrote: »

I was looking at buying new car in August of 2017.
The Skoda Superb I wanted cost in the aria if 46,000 euro.
Even if I go 16,000 vet return as disabled car that would be at least 30,000 euro
In the end I bought a 7 year old Skoda superb ex Russian embassy for 10,650 with 62,000 miles on the clock.
The linage is now a 71,000 miles approx.
so far parts replaced one water pump and one battery. Battery that came with car was wrong size.
Buy second hand for me was a lot cheaper.

Money aside, I think it’s cool to own a ex embassy car, even better a Russian one.

Belfast

I Was VB wrote: »

Money aside, I think it’s cool to own a ex embassy car, even better a Russian one.

indeed.
Embassy cars tend to be very High spec.
There are a lot more embassies in Dublin than 20 years agoso a lot more ex embassy cars.

Kivaro

I Was VB wrote: »

Money aside, I think it’s cool to own a ex embassy car, even better a Russian one.

Imagine all the hidden gadgets in it.

Belfast

Kivaro wrote: »

Imagine all the hidden gadgets in it.

Many cars seem to have hidden gadgets I friend of mine was driving his car for 3 years before his girl friend show him that his car had air conditioning.

Belfast

Buy a new car is very nice if you do not mind paying more money than you need to.
Just the thing for the payday millionaire.
Like buying a hot cup of coffee in a petrol station or bottled water.
An expensive way to buy stuff.

Push-button coffee machines making €1m a year in busy service stations
Some push-button coffee machines are turning over a staggering €1m-a-year each for busy service stations.

Vast profits are being made by selling the commodity coffee and charging €2.70 for it.

And campaigning broadcaster Philip Boucher-Hayes revealed: "Petrol stations are not just making a killing, it's a massacre."

The latest episode of his RTE series What Are You Eating? lifts the lid on Ireland's snacking obsession.

A huge 42pc of us have a drink with every snack we eat - with coffee being one of the most popular. Three-quarters of the population drink coffee, with one in every 10 people drinking five or more cups a day.

Gourmet coffees are now incredibly popular but Mr Boucher-Hayes discovered they do not make a fraction of the profits of a cup of joe from a filter machine in a service station.

Coffee expert Colin Harmon estimates a €1m a year push-button machine would make €900,000 profit before staff costs were taken into account. "It's insane - that's just a push-button espresso machine. It's commodity-grade coffee.

Mr Harmon, owner of the 3FE speciality cafe in Dublin, said: "A bog-standard cup of coffee out of a petrol station will cost you about €2.75. We source some of the best coffees in the world so our base price is about €3.50 and we still make a profit."
https://www.independent.ie/business/irish/push-button-coffee-machines-making-1m-a-year-in-busy-service-stations-35522611.html

Lantus

Well cars are expensive.. But there needs to be a new owner to get a 2nd hand owner....

You can get a brand new octavia with minimal deposit for 350 a month. I'm happy enough with that as it gives piece of mind and I know I will keep for a long time.

By contrast I don't have an expensive sky contract. Easily 100 a month. Don't watch sport which is an expensive waste...
Don't have a designer phone at 100 a month.
Don't eat or drink out very often. Hundreds saved. Go on modest holidays. Shop at penny's and dunnes for all clothes.

Just like cars need to be assessed by total cost so do lifestyles.

The monetary system is an exponential curve with lots of poor, some richer and a very few mega rich. That curve changes in value but never in shape. Not buying a new car won't put you up the curve to millionaire status.

So enjoy what you like. If its a new car then fine. I'd be more concerned if they were snorting coke or beating up old people.

Wildly Boaring

Belfast wrote: »

I was looking at buying new car in August of 2017.
The Skoda Superb I wanted cost in the aria if 46,000 euro.
Even if I go 16,000 vet return as disabled car that would be at least 30,000 euro
In the end I bought a 7 year old Skoda superb ex Russian embassy for 10,650 with 62,000 miles on the clock.
The linage is now a 71,000 miles approx.
so far parts replaced one water pump and one battery. Battery that came with car was wrong size.
Buy second hand for me was a lot cheaper.

You did 9k in 2.5 years and had to replace a water pump.
Some years I'd do that in 9 weeks and where would I be when the pump calved? What would I drive while it's being fixed?

You're right though a new car for 9k in 2.5 years would have been a waste

Belfast

Wildly Boaring wrote: »

You did 9k in 2.5 years and had to replace a water pump.
Some years I'd do that in 9 weeks and where would I be when the pump calved? What would I drive while it's being fixed?

You're right though a new car for 9k in 2.5 years would have been a waste

what would you with a new car with a broken water pump?
Same thing a you do with a second hand one , get it fixed.
A new one would be done under warranty is the main difference.

New cars can have failures too.

Wildly Boaring

Belfast wrote: »

what would you with a new car with a broken water pump?
Same thing a you do with a second hand one , get it fixed.
A new one would be done under warranty is the main difference.

New cars can have failures too.

Mine haven't (knock on wood)
Neither have my multitude or 2 or 3 year old cars.

My point was more that people are quick to write off other options of car ownership.

4k a year is bangernomics territory and definitely not new car territory.

50k (miles 80km) a year is also not new car territory, unless the company is looking after expenses very well.

Horses for courses.