Anyone use Dave Ramsey's Debt Program - Sell your car?

[tvguy]

A new car does not guarantee less costs.
I have bought a brand new car only once and will never do it again, a VW. It has spend a lot of time in the shop in its very early years already. the repairs have cost several thousand dollars.
At first it was covered by warranty but the repairs kept coming after that.
My '81 Audi on the other hand which I kept for nostalgic reasons, built the day I was born, has never had but very very small repairs.

There can be lemons in any brand as you learned since VW and Audi (and Porsche) are the same company.

 

[tvguy]

We have older vehicles and one of the engines went, so we have a mechanic and had him put in another engine and we are happy. No car payments, we have 3 vehicles.

Knock on wood, I have never had to replace an engine, just transmissions. Reading Hemmings Classic Car, there are cars out there that are 60, 70 80 years old with the original untouched engines. So it is possible, but I suspect those are the exceptions, not the rule.

 

[MomofDisneyLoversx3]

That sounds like a lease not a purchase payment (unless it's a 10 year loan). My car payment is over $500/month, but we chose to sell our last vehicle (2007 Honda Pilot) and pay off a credit card with a 9.9% interest rate and then purchase my car with a 2.5% interest rate so a 2014 Toyota Highlander with a 5 year loan is actually almost $800/mo and it's currently work 10K (in resale) more than I owe on it. My DS bought a brand new Mazda 3 6 years ago and paid it off in 5. That was a 19K car with 0% interest and his payment was about $350/mo. The problem with buying used cars is I've seen them just up and die in a year (or even less) and most only have 30-90 day warranties. And when I say die, I mean major engine issues.

Nope. That's purchase price. My paid off (1 week before) vehicle was totaled. I added to the down payment. And I got dealer rebates because I bought a prior year plus I have a 0% interest rate. And it's 5 years.

 

[Tomh]

No, but a 10 year old car isn't exactly a cash purchase when you are in debt trying to get out of debt. A 10 year old car means... a car payment, usually pretty darn close to what you would pay brand new because of very short terms and higher interest rate.

I have a 20 year history of buying used cars. At 10 years old, you are pretty much figuring above 100,000 miles. We put about 20,000 miles or more on per year for each car. At 140-150,000 miles you can start expecting the larger repair expenses. So, there's only 2-3 years of life with that car until the bigger stuff starts going (clutch, head gasket, etc.)

A "beater" car is just that, one that cost nothing but will cost you in repair. Here up north, that means you are buying right around the end of life as far as corrosion. The rust starts happening anywhere from 150-200,000 miles. Once that starts, there's no stopping it. It's a bodywork repair every year for state inspection. I know, my previous 3 out of 4 cars I've been through have been 185k, 165k, 189k. All have had extensive bodywork and expensive maintenance/repairs ($1000+) over the final 5 years I've owned them.

This CAN be true, but doesn't have to be. The only reason why a car should blow a head gasket is if you didn't maintain the cooling system properly, and allowed the engine to overheat. Clutch and timing belt you can expect need doing around 100k give or take a bit.

Buying an older used car is fine, if you are capable of performing maintenance on it yourself. If you rely on a mechanic at $100 an hour for labor, plus mark up on the parts he installs, then you are better off to buy new, or lease.

I always buy used, always from a private seller. I currently own 2 1996 Honda Accords, both with less than 100k miles on them. I paid $700 for one, and $500 for the other. Both needed some work when I first got them, but even with the parts I put into them, my total cost was under $1500 per car, and I fully expect to put at least 150k miles on both of them, probably more. Ultimately, how long they live is going to be a matter of how long I can hold the rust and corrosion off for.

The thing you need to figure out for yourself is if the cost of repairs on an older car is going to be higher than the cost of the payments, and extra insurance on a new car. For me, it is rare that I have a month where my older cars cost me more than what a car payment would be.

 

[bdcp]

Nope. That's purchase price. My paid off (1 week before) vehicle was totaled. I added to the down payment. And I got dealer rebates because I bought a prior year plus I have a 0% interest rate. And it's 5 years.

You kind of left out the downpayment part. Anyone can lower their payments by a lot by putting down money. So, whether it's a mercedes or a Kia, it doesn't really matter.

 

[01spirit750]

This was a good read. I think this is a really a case by case basis.

I am a weekend mechanic and fix almost anything.

My last car I had bought new and was 18 years old and had 250k miles when I got rid of it. I donated it and got a great tax right off. I could not honestly sell it. It had a water leak into the engine oil which I had fixed and it ran great. The problem is water destroys the bearings and could cause failure in the future. We also were expecting our first child and this car did not have air bags or anti lock brakes.

Many years ago my sister was looking to purchase a cheap older used car with 100k+ miles. She asked my to go with her to look at a car she was real excited about. I looked at it and told her not to buy it. Yup she bought it anyway and 3 weeks later the head gasket blew and caused major damage. Oh, and it was a manual transmission car which she did not know how to drive. Her replacement car to this was a Yugo. She had to park it in the shade or it would not start.

 

[klbrow11]

If it was a huge payment I might sell. But generally I do not believe selling your stuff to get out of debt. You need a car and a reliable one.

I used to be a big DR fan but I was pretty miserable. We bought 3 beaters and honestly was nothing but headaches. We bought a new car but economy and small so payment was 295 and we just paid that off early. It only has about 55000 miles on it. We actually sold his truck which had 180000 miles and figured nearing expensive repairs and bought a used car at a good price with only 10000 miles. Gas mileage is so much better so the payment is about what we were spending with his gas guzzler.

I won't ever go back to crap cars again. I also won't spend a crazy amount of money on something.

 

[MomofDisneyLoversx3]

You kind of left out the downpayment part. Anyone can lower their payments by a lot by putting down money. So, whether it's a mercedes or a Kia, it doesn't really matter.

I guess I just assumed everyone put down money.

 

[dosekies]

No, but after buying my first car last year I have decided I will probably never buy a new car. I was going to get a new, compact SUV but decided it made more sense to go for a small, used car. I'm 24, so I really didn't need anything bigger. I found one I loved that was pretty new - 2015 Chevy Sonic with around 18,000 miles for 15k- and was able to put half down right away. I paid the rest off in 10 months and it feels great to not have a car payment for a close to new car. I don't think I could ever buy a new car after this experience.