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I like Ramsey's suggestion of a "car ladder" where you purchase a $5,000 car in cash, make payment to yourself for a year and then sell the $5,000 + the cash yo

I like Ramsey's suggestion of a "car ladder" where you purchase a $5,000 car in cash, make payment to yourself for a year and then sell the $5,000 + the cash you saved to move up to a $10,000 car. Repeat in a loop until you're at the vehicle class you desire. The drop off in vehicle value over one year is very small at low prices. When you get to more expensive cars, the drop in value is more significant in a year.

tharne 7y ago
Dave Ramsey is really annoying, but he's usually right.
- Raidion 7y ago
  He's not usually right, but he's usually right enough AND he's simple enough that listening to him for most people is a net benefit. His anti-debt/anti-borrowing views work really well for his audience of those that are struggling to live within their means, but are not optimal strategies for those who can use debt/credit without getting themselves in trouble.
  - mmcconnell1618 7y ago
    Agreed that his math doesn't always work out but you're correct that for an audience that is struggling with behavior more than math, his advice is usually on the right track. If you're responsible with debt, it can be leverage to accelerate wealth in certain situations as long as you are aware of the risk involved.
auiya 7y ago
This works find assuming the cheap car you bought in the first place doesn't blow an engine mid-year requiring everything you've saved in order to repair it. This happens more often than you (or Dave Ramsey) would imagine.
- mberning 7y ago
  There is no data to back that up. I won’t suggest that it can’t happen, but if it were as common of an occurrence as you suggest there would be no used cars to drive. They would all be at a junkyard. If you exercise caution and due diligence you can score a decent used car that will last you more than a few years.
  - auiya 7y ago
    When was the last time you toured a junk yard? They're absolutely littered with Eagle Visions, Pontiac Grand Ams, Chevy Metros, and Saturn LS's; all kinda trash from the 80's and 90's - you know, those $5k Dave Ramsey specials that don't actually make financial sense to fix? I was being slightly hyperbolic, but Ramsey's way short-sighted when it comes to car maintenance/running costs of cars that cheap.

tharne 7y ago

Dave Ramsey is really annoying, but he's usually right.

Raidion 7y ago
He's not usually right, but he's usually right enough AND he's simple enough that listening to him for most people is a net benefit. His anti-debt/anti-borrowing views work really well for his audience of those that are struggling to live within their means, but are not optimal strategies for those who can use debt/credit without getting themselves in trouble.
- mmcconnell1618 7y ago
  Agreed that his math doesn't always work out but you're correct that for an audience that is struggling with behavior more than math, his advice is usually on the right track. If you're responsible with debt, it can be leverage to accelerate wealth in certain situations as long as you are aware of the risk involved.

auiya 7y ago

This works find assuming the cheap car you bought in the first place doesn't blow an engine mid-year requiring everything you've saved in order to repair it. This happens more often than you (or Dave Ramsey) would imagine.

mberning 7y ago
There is no data to back that up. I won’t suggest that it can’t happen, but if it were as common of an occurrence as you suggest there would be no used cars to drive. They would all be at a junkyard. If you exercise caution and due diligence you can score a decent used car that will last you more than a few years.
- auiya 7y ago
  When was the last time you toured a junk yard? They're absolutely littered with Eagle Visions, Pontiac Grand Ams, Chevy Metros, and Saturn LS's; all kinda trash from the 80's and 90's - you know, those $5k Dave Ramsey specials that don't actually make financial sense to fix? I was being slightly hyperbolic, but Ramsey's way short-sighted when it comes to car maintenance/running costs of cars that cheap.