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Car Payments - Dave Ramsey Rant - YouTube
Channel: The Ramsey Show - Highlights
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I've got this friend who drives a car ...
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the only way to describe it is it's just
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a piece of crap. It's just the worst car
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on the planet. I mean I don't know and
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here's the problem; is the guy actually
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has money. Like a lot of money but he's
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just become a freak about this car.
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Like he'll spend money on other stuff he
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takes his family on vacation and they've
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got a nice house, but he's like it's like
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this car is some kind of a reverse
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status symbol for this guy. And you know
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and you know, Lord willing most people
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more people would be like that rather
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than driving around in cars you can't
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afford with car payments to impress
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people at a stop light you'll never meet. A
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lot of you spend a lot of money to
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impress people you will never meet with
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your car and I've got some nice cars I
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like cars, I'm a car boy, there's no
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question about that, but man when we were
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broke we were driving .. well to start with, I
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was driving a Jaguar and then I went
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broke and I sold it the day before they
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took it, so that they didn't take it to
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avoid the repossession; the proper thing
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to do to try to pay my bills of course I
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didn't pay the whole bill, I had to sign
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a note for the difference. And as part of
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the bankruptcy, it was a disaster
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and so we're down to one car. So a friend
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of mine loaned me a car like my buddy
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has. He loaned me a .. true story, a 1978
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Cadillac, with 478 thousand actual miles on it.
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The predominant color on this puppy was
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bondo. It had a vinyl roof and when you
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drove it, the vinyl roof was broken loose
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so it filled up with air like a
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parachute on top. So I'm driving bondo
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buggy with a parachute on top. I drove
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that car for 10 years one three-month
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period, but I saved some money buddy,
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because I wanted out of that car, I want
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to take my friend his blessing back. But
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it rolled, it started; most the time it
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started, and most the time it rolled. And it
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got me there. It was really, really
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embarrassing; humiliating is a better
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word. To drive that car to our church,
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because that the church we were going to
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people didn't have cars, like they had
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nice cars. A lot of them were in debt and
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had car payments, I knew that, but I'm
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still sitting there driving bondo buggy
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with a parachute on top up to the church.
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I park it and the top settles, like ... you
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know it drops down. That seems like 20
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minutes ago. It was almost 30 years ago.
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I drove like no one else so that later I
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could drive like no one else, so now I've
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got nice cars again, and of course this time
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they're a very small percentage of our
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net worth; a very small percentage of our
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net worth. And of course I paid cash for
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them and they just in other words,
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they're small enough percentage of a
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world they don't matter. Well my buddy's
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got money and were he to buy at least
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one decent car it would be a small
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percentage, a very small percentage of his
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world . He's probably worth 20 million
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dollars, I don't know, but something like
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that, and he's driving this $200 car and
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it's ticking me off , 'cause I'm like
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dude, you are not modeling success here.
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You know this is not anything to be
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proud of; you drive a 200 dollar car so
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that you never have to drive a 200 dollar
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car again. That's the only reason you
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drive a 200 dollar car. Not because it's
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a badge of honor, it's not something to
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be proud of son. And I can't get through
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to him, so I don't know what I'm going to
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do with him. But he's the reverse of most
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Americans. Most Americans the average car
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payment in America is 386 dollars over
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84 months right now. Driving a car you
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can't afford, not even close to being
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able to afford it, and then scratching
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your head wondering why your kids
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college fund didn't fund. Well you're
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driving it!! You're driving the college
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fund that's why! I mean I get why my
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friend has become such a freak about his
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car. I get why he's thinking that way.
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Because so many other people, most other
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people, are the opposite end of the
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spectrum. I mean he's a little overboard
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and a little bit freaky about this old
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beat-up car, but most you are just stupid.
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I mean just most of America is just
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straight up car stupid! You fleece your
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car, acting like that you when you rented
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your car, you did a good deal. Give me a
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break! And the stupid thing loses 60 to
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70 percent of its value when you buy a
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new one in the first four years that you
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drive it. So you turn thirty thousand
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dollars into eleven thousand dollars and then
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scratch your head and wonder why you
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can't get ahead financially. What if all
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your investments; what if all your IRAs,
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you put money in a mutual fund, every
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time you did it you turn thirty thousand
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into eleven? Well everyone knows that's a
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formula for not getting rich. Hello! This
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is not hard to think about people! It's
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the largest thing we buy that goes down
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in value. That's why my friend's become a
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freak about it. He's like I don't want to put
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money and something goes down in value.
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I'm like yeah, but you're embarrassing me
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and everybody else that knows you. Buy a
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car son. Even if you only spend ten grand,
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I mean it's what one one-one hundredth
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of a percent of his net worth or
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something? But the rest of you are driving .. you
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know you're making thirty thousand
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dollars a year, you're driving a seventeen
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thousand dollar car. Well, that that's
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just nuts!!
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It's just nuts! You got a household
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income of 60,000 bucks, and mama gets a
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$32,000 SUV. Somebody ought to smack you!
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That's just nuts! You do not have the
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financial margin to lose thirty thousand
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bucks. To lose ten thousand bucks. To lose
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twelve thousand bucks. If you've got
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enough money that you can throw twelve
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thousand dollars off the edge of a
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bridge, and it not damage you, then you
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can afford to drive a car that expensive.
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But this idea that you can just ..'well I can
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afford it', what most people mean when
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they say that is they think they can pay
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the payment if they keep their job. Let
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me help you with a new definition of I
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can afford it. I wrote a check and paid
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for it; that's the definition of I can
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afford it. If you can't pay for it, in
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cash, in total, on the spot cash on the
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barrelhead, you can't afford it. Whatever
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it is; your car, your clothes, your
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groceries. Some of you are charging
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groceries. Huh. Talk about financing a
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depreciating
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asset. Wow. We've lost our minds in this
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culture guys, we really have. And all of
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it is because people have been sold
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stuff and sold stuff and sold stuff, and
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they've got this entitlement thing, and
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they say, you know I meet 42 year old men
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who say stuff like I deserve a nice
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truck because I work hard. You don't
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deserve anything, you little child!
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'Cause you work hard. What do you think, that
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makes you pregnant? Nobody else is ..
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nobody else is out here not working hard.
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Well some of them aren't, but I mean everybody
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works hard deserves to go deeply in debt
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by truck that can't afford is that what
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you're saying? That's your philosophy of
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life?
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How stupid and backward is this? So
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here's an idea, pay cash for your cars,
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and don't let your cars and boats be
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more than half your take-home pay and
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then that's an indication that you're
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not got too much invested in things that
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are going down in value.
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I'm not against cars. I'm not against car
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dealers. I'm against people doing stupid
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stuff with cars that cause them to be
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broke and that includes car payments and
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leasing fleecing your stupid car. There
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we go. This is the Dave Ramsey Show.
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