I ordered a new van in 1998 to get exactly what I wanted. I would not settle for what the daelers had on there lot.12 years and I still love driving it because I got what I wanted.

George August 30 2010 7:22 PM

heard your radio show

hunt August 23 2010 6:29 PM

Concerning the critism return on stock mutual funds, I think the critism is right on the mark. The Vanguard SP500 Index (VFINX) mutual fund has returned a little over 10% over the last 35 years, but the return over the last 10 years is -1%. That is too much volitility for a car (short term) savings account. I think a better approach is to buy a Total Bond Index mutual fund (VBMFX). Since inception, 1986, the return is about 7%, and the last 10 years the return is 6%. For short term savings, I think Dave would be better served using an earnings rate of 5-6% (reality). Most index funds have very simular returns, and the fees are very low.

Randy August 19 2010 12:55 PM

My husband & I have never had a car payment for 10 years, until this year. I despise it! Starting the FPU classes next month, can't wait to get this paid off.

Vicki August 13 2010 11:44 AM

I have bought 3 cars in the past 9 months for a total of $9000. I got a 99 Toyota Camry, 98 Suburban and a 2001 Yukon. They all run great with cold air. Wow! Sure beats a car note. The insurance is much lower too in that you can do liability only on them.

Pat Guttery August 13 2010 9:40 AM

I have purchases 3 new cars and 2 used cars in my driving lifetime. The new cars I drove for an average of 8.6 years. I was forced to get rid of both used cars within 1 1/2 years of purchase because they developed a major mechanical problem which would have cost more than the car was worth, plus I still had a car note. I agree with Dave on his process for buying a car however, sometimes there is something to be said for buying new and driving that one until it's paid for and the wheels fall off I just bought a new Toyota 3 days ago and plan on driving it for at least 10 years.

Alecia August 13 2010 7:36 AM

I'm 41 and, since my first car at age 19, have been always bought older, usually higher mileage used cars. I've bought cars with up to 125,000 miles on them. None of the cars has cost me much to repair or maintain. Normal maintenance and a few $200-$300 repairs and I driven these cars for years, no problem, with no car payments, cheap insurance, cheap excise tax, etc. Dave Ramsey is right about cars.

Kim August 09 2010 1:27 PM

The problem with buying used cars is you don't know if they have been in a flood or if they were junked, wrecked and revamped with a good title. Only buy a certified car. They need to have laws to rein in these car dealers. My hubby drove a free car that someone gave him for 60,000 miles over 5 years and he just sold it to the junk yard for $200 bucks. Yes it dollared us to death and it was a danger to drive but I need a newer reliable car.

Marianne August 05 2010 8:33 AM

Just a comment to everyone asking "how do you save $400 a month cash when you're paying for repairs all the time?" Well I've driven crappy high-mileage clunker cars my entire life and they have NEVER cost me more than $100 a month to maintain.

Isaac August 04 2010 1:35 PM

This is something that works well for a practical minded person who is handy. For the person who just knows nothing about cars and FREAKS out the second something goes wrong, plus has to pay a mechanic every time, it can be a problem with some cars. Still, even the worst-worn cars, after putting $1000 or maximum $2000 into them, will go for years without major repair expenses. I have cars that are pushing 20 years old and they are still fine--I keep them up and I know they are safe because I inspect all the steering linkages, ball joints, and what have you myself as well as the yearly mandated state inspection. Someone who doesn't know cars would throw up their hands and replace them at that age, but I see another good 5 years out of them, no problem. The key with an older car in general is to fix EVERYTHING that goes wrong in some manner that is acceptable to you. If you let little things go, pretty soon you feel like the car is a claptrap and are psychologically poised to get rid of it.

Steve in W MA August 01 2010 12:40 PM

As I read these comments I hear people talk about how Dave is wrong. If any of these people were as well off as Dave I might agree with them. But, then they would have a better idea. I haven't seen it yet. Some wonder about the 12 percent return on their money and some even bicker about whether it is an interest, or a reinvested dividend. If they knew stocks they would know that it is the growth of the stock price! If it grows, it is more valuable. Then when you sell it you make the money! Just like buying anything that goes up in value, like maybe Real Estate? It becomes more valuable, you sell it, and you make money. The amount you make is determined by the average interest over a period of time. So unless you think the stock market is going to crash and stay crashed (it has always bounced back) stocks can work for some. But only if you do like Dave says and look LONG TERM. I have been debt free for a long time, and it is enabeling to be able to spend money without having to give it to someone else first. Add up what you've spent on interest alone over the last five years and ask yourself, What could I have done with that money? Trips? Cars? Homes?

Randy July 31 2010 12:02 AM

Recently the complete engine in my 1995 Dodge Neon failed(After 7yrs). My first thought was I have to buy a car. I did it Dave's way. I used some of my emergency fund and brought a $830.00 1998 Dodge Neon clean solid car. Still working on giving it a name. Car color is red. I welcome all suggestions for giving my new car a name?

Steve July 30 2010 2:42 PM

I love the idea of saving the money each month but can anyone tell me where I get the 12% money mututal????

JC July 30 2010 2:01 PM

We have followed Dave for several years and decided to not buy a new car until we have saved the money so we started a new car fund and are depositing $800 a month (estimated car payment on SUV). Dave, where can one find a 12% mutual fund to invest the monthly commitment as you recommended? We are retirement age and are not aware of low risk 12% returns. sign us, happily driving two long ago paid for autos.

Arieta July 30 2010 12:25 PM

The whole thing makes sense, but what I haven't figured out is where I'd get the US$2K to US$3K to buy the beater, when I'm contractually committed to the payments for years. I can't simply return my vehicle or sell it without extra cash to payoff the sale to debt difference!

Anderson July 30 2010 8:46 AM

We have literally $250 left and our car is paid off. We still have a bit of other debt that we're paying down with the debt snowball, but we've vowed that once this car is paid off, we're never buying another one on payments.

somecallmejim July 29 2010 6:13 PM

Well Dave, I've been through your course. Loved it! But the car thing, I have some trouble with. We had a beater, saved our "would have been" payments but unfortunately... those payments had to be spent fixing the beater. On top that, I have 2 little kids and we couldn't go anywhere. A trip to the next city freaked me out! So, we bit the bullet and even though we are totally debt free, are now making payments on something that is SAFE and dependable. The plan just didn't work for me, I tried though. My #1 priority is to pay that sucker off though and I didn't make any fancy, quick, overpriced purchase on the car. But now I can drive to the grocery store with 2 little ones with peace of mind. Just thought I'd share and would appreciate your advise as to what I should have done in your opinion. Good news is, some of the money I put away plus my beater trade in (got more for it that way then selling myself, plus I felt guilty about selling the beater with 180k miles) did make a nice little down payment but no way could I imagine buying another beater.

Michelle from Seattle, WA July 28 2010 3:15 PM

WE hate carpayments so we pay them in full, Dave's plan always works in our household.

Marissa July 28 2010 12:14 PM

My last car lasted 12 years and we bought a new car with cash for me. I will buy my wife's next car with cash and it will be 2-3 years old. You don't HAVE to buy a new car, if you are going to have payments, get a car that will run for a couple of years and keep doing that instead of being a slave to car payments.

Jeff B July 28 2010 9:44 AM

I haven't had a car payment in about 5 years, and I love it! When I bought my cars, I was sure to buy reliable vehicles that would last for a long time (I have a Honda, an Acura, and nearly 30 year-old GMC pickup). I even learned to work on my cars so that I could save on periodic maintenance and repairs. All my cars run very well and are in very good physical condition. My Acura will need a paint job in a couple years, so I'm putting money aside to do that when the time comes. I'd rather save my money and/or spend it on something more productive than throw it after a machine whose basic function is to get me from one place to another. I couldn't care less about impressing others with new, expensive toys.

B July 21 2010 10:26 AM

We need a family car ours was repoed how can we get one, our credit is bad we want to rebuild but at the same time we still need an auto what can we do desperate.

Christie July 16 2010 1:41 PM

A few thoughts to Leigher. It sounds like you are doing great (...except for the leased auto). Who is bashing you over paying cash? Friends and family – None of their business! They are secretly envious that you don’t have debt or a car payment. Misery loves company, and those closest to us, sometimes want us to be in the same situation so they don’t feel so bad about their own predicament. I can see the car dealers bashing you, since financing is the biggest money maker for them (...I used to sell cars), so remember what their motive is. I am trying to figure out what is your concern, since I am currently in the process of getting to the same financial place that you are already at. I am starting to hear all of the nay-sayers, too. Hang in there and don’t worry about the future, it sounds like you are prepared for it!

Cary July 16 2010 11:47 AM

My husband and I try and live beneath our means. We are both 57, paid cash for our home, our modest autos (one purchased, one leased), no credit card debt and we do have extras we pay cash for. We have several retirement accounts and a 401K and annuities and a safety net account, just in case. We give 12% a year to charity and help family too. We feel blessed that we are able to do this. I guess the hard part is that people bash us for paying cash - especially the autos, but it gives us peace of mind to owe no one. You never know what the future brings. Any thoughts out there?

Leigher July 01 2010 4:28 PM

My wife and I are currently listen to your advice at our church. We have CD with our bank from her 401k when she left her company. Is this the best way to invest.

Alfred June 27 2010 6:15 PM

Ed, you're confusing Mutual Funds with retirement accounts (401k, IRA, etc). Don't pull money out of your retirement account to buy a car!

Adam June 19 2010 4:14 PM

Ryan, I went on Fidelity's web page, and they had 7 mutual funds (at least 24 years old) that have over 12% return on the life of the fund. And that is just in the domestic stock funds (by sector). You have to be careful when choosing them to make sure their not gold driven, as these funds have seen huge returns lately. The one's I have referenced were in Healthcare, Computers, Transportation, etc. Investing is risk taking and realize that most mutual funds have a bad 1 yr, 3 yr, and 5 yr track record right now, but that it's mostly due to the 1 yr track record.

Zeke Rozich June 16 2010 10:42 AM

Ryan, I went on Fidelity's web page, and they had 7 mutual funds (at least 24 years old) that have over 12% return on the life of the fund. And that is just in the domestic stock funds (by sector). You have to be careful when choosing them to make sure their not gold driven, as these funds have seen huge returns lately. The one's I have referenced were in Healthcare, Computers, Transportation, etc. Investing is risk taking and realize that most mutual funds have a bad 1 yr, 3 yr, and 5 yr track record right now, but that it's mostly due to the 1 yr track record.

Zeke Rozich June 16 2010 10:00 AM

The video was going well until it started giving estimates based on 12% returns on stock mutual funds over 5 year periods. To top it off, it actually uses the term "12% interest" on your stock mutual funds. There is no "interest" on a stock mutual fund. You're just reinvesting dividends and hoping the market price of the underlying stocks goes up so you have that 12% gain. What happens if those 5years results in a negative overall return (which is a very real possibility with stock funds)? Then what? Your brilliant plan may lose steam after only 5 years. Dave is great at motivating people to pay off debt, but when it comes to investing, he always over-inflates the short-term numbers to make his plan look way more favorable than it really is. He's just trying to get people all excited by his inflated numbers, but why not use a more realistic interest rate given by savings accounts (e.g. 3-4%), since you're expecting to withdraw from this car fund every 5 years? I'm guessing he doesn't want to do that b/c the numbers wouldn't look quite as rosy.

Bonnie June 12 2010 4:09 PM

Dave, I've heard your argument for the 12% return, but it's not realistic anymore. outside of that, this is a good concept.

Ian June 12 2010 9:23 AM

I love Dave Ramsey and his plan, but usually Mutual funds have fees or inconveniences attached to them if there withdrawn before retirement time, right? Wouldn't a savings account be the way to go here?

Ed Wanderer June 06 2010 2:11 PM

Mark mentioned owning two old vehicles. In 1997, I enherited a 7 year old Chevy pickup, and have have been completely sold on having a backup vehicle ever since (we replaced it in 2008 with another old pickup). My old pickup has liability insurance only ($150 every six months), gets serviced every 3 months ($39.99 at my neighborhood quick lube) and has been a lifesaver many times. And last month we got some free furniture from a friend looking for someone "to just haul it off" for them.

Daniel May 30 2010 6:41 PM

Regarding the sales tax, the difference will pale in comparison to what you will pay in interest. By the time that 7% catches up with you, you should have enough saved up that it doesn't matter. Also, as you spend more for the "clunker" there is an expecetation that it will last a bit longer. Get the "clunker" to last 3 years and suddenly the effective rate is down to 2.33%. FPU Winter-Spring 2007

Ron May 29 2010 9:52 PM

I definitely believe in not financing a vehicle if possible. I had to finance my first one, but after that I've paid cash for the others. My husband and I have followed Dave's plan and in 3 1/2 years we have paid off a car loan, a large student loan, wedding debt, and both mortgages that it took to purchase our home. I just turned 30 and we have been debt free for over 2 years now. We are looking forward to having our first child in a few weeks!

Leslie May 27 2010 7:35 AM

I like the concept, howeverif you are buying a car every 10 months don't you have to pat sales tax on that amount every year. In Nebraska (7%) where I live, that can add up to roughly, 350.00 every time you purchase a new (used) car.

Zach May 25 2010 9:08 AM

Chuck - I think Dave would say to sell your existing car w/ the $475 payment and downgrade to a clunker that you can buy with cash. Then you can start this plan and quickly upgrade in 10 mos.

Ryan May 22 2010 1:45 PM

I think this video is great! People need to learn to drive older cars and build wealth. The only thing, and I mean only, that I have a hard time accepting is the 12% return on mutual funds. That seems aggressive, and wishful thinking. Can someone show me some funds that have been performing like that over the past 10-20 years on average?

Ryan May 21 2010 2:25 PM

I like the video and the premise makes good sense, but my question is if someone is making $475 a month payments on their present car, how can they save and additional $475 for the next one?

Chuck May 17 2010 5:18 PM

So when should someone put this plan into action. Is this what you do on step 4 or 5 or is this someting someone should do now?

Kasey May 15 2010 8:53 PM

This is a great video.. Here is the one thing I wish people would learn or live by... STOP! Comparing yourself to others. I feel that if everyone just focused in on their own personal situation then their money would go so much further. I have never been in debt aside of a home. My parent taught all their children to save. After and accient in 2005 I recieved insurance money to pay towards a vehicle, I paid 12000$ down and financed the rest 6000$ for a total of 18000$ with money in the bank I would just trying to improve my credit. I believe this loan was for 3yrs. I hated making payments so much that I paid the vehicle off in the 1st year.. my only regret!!! WHO needs an 18000$ vehicle? I often look at my car and think to myself that the money would be better spent on the home or even a vacation. My husband and I continue to save for a new car in the future but have already vowed never to pay more than 10000$ for a vehicle. TO all whom find Dave Ramsey do yourself a favor and practice his wisdom!

Amara May 12 2010 1:57 PM

Wow i wish i saw this video a year ago. I totally agree. I saved $10,000 from no car payment in 1 year. But now thats all gone from taking out a loan for a new car. The good news is that my car note is now down to $7,000 and Will be paid off this year. I wont do that again! Thanks for the encouragement. Have a blessed day.

Carlos May 10 2010 4:56 PM

I was two days away from buying a new home when I found out I was getting laid off. Then, I totaled my car (nobody hurt, thank God..) and in a knee jerk reaction, bought a new car - $26K. My old five-year-old car was paid off only a month before. Now I'm back into car payments. No first home of my own....and my downpayment for that is gone. I also lost a $5K deposit on the house. Sigh. Wish I'd seen this before I signed up for another car loan at 13 percent interest. My entire situation just makes me ill.

Ashamed May 10 2010 11:17 AM

Ok, so I am in my first year of re-building from scratch after a bad divorce and bancrupty. Did my Dave Ramsey FPU and last year purchased a used 2500 car for cash...ready to replace with the trade up plan come this fall. I am thinking that would be the best private sales as the dealers would be looking to clear the lots of inventory and a new buyer would have their second hand car for sale...any suggestions?

Peggy Kiza May 05 2010 7:44 AM

DAVE!! You are a genius!!!!!! I can't wait until my husband wakes up from his Sunday afternoon nap so we can watch this video!!!

Amanda May 02 2010 2:06 PM

I was really disappointed to find your video gone from the site. I am a high school English teacher. For at least four years I have spent the last six weeks of the school year educating my seniors about debt and credit. The "Drive Free Retire Rich" video was the best attention-getter I have ever had. I was highly disappointed this year when I clicked on the video link and got our district's internet filter screen instead. YouTube is a forbidden site in most schools, and we have lost a valuabe resource. I printed the text from your site, but so much is missing; for example, how much money someone can save when not paying perpetual car payments. Is there any way to restore your original video to your website? It's worth its weight in gold!

Bruce April 19 2010 10:13 AM

Here's a great tactic you can really use, even when buying a used car (which is the best thing to do!). I went to a dealer and got them all worked up, letting them know that I had to move that day. Then, I asked them if they did financing at the dealer (should have seen them lather!). Then I negotiated the price of my trade in with them (they wanted to do the price of the car I was purchasing first, but I insisted (and you should too!)). Once I had the commitment in writing from them on price, I negotiated the value of the used car I was purchasing. Then when I had that in writing, they said, OK, what kind of financing deal do you want to set up, how many years? I said "zero, I'm paying cash". I thought they were going to have a heart attack! "But you asked about whether we financed!" they pointed out. "Yes, but I never said that was what I was going to do, " I smiled and replied. So I got a great deal because they assumed they'd make up their profit in the interest payments. SUCKERS!

Mark April 09 2010 12:55 AM

Derek, I understand that trading up on a permanent basis is a bad investment, but I feel as if you were misguided in thinking that you are going to be trading up every 10 months or so. Knowing full well the depreciation in a car, you are only "trading up" twice until you have a ~$12000 vehicle that will sustain you reliably for the next several years while you save up the cash you need to purchase your next car in cash. After that, you will be buying usually the same standard of car over again, just newer like any other person might every 5-7 years. This may be a philosophy difference between you and I, but I see buying a gently used, 2-year-old vehicle as being mostly superior to new. First of all, a $20k, 2-year-old used car sets you in the initial price range of $25000+ which is significant jump in features and initial quality. Secondly, you have let the first owner take the hit of the first $5000 in depreciation so you will see a higher resale value on the used car than the new one 5 years from now when you could be ready to use the money that's been growing in your mutual fund to buy another newer car instead of risking the repair costs of a car that is 12 years old. So it is actually financially wiser to let someone else take the hit on the depreciation of the car for the first 2-4 years and then pick the car for $20k and have a higher resale value in 5 years when you want to sell it. As for mutual funds not being a short-term investment tool, I can agree. But if you diversify and keep your money in smart, researched funds, it will almost always give better returns than the <1% savings accounts. Maybe put it in a money market account, but you'll just barely break even with taxes and inflation at that rate. Good luck and happy hunting!

David April 07 2010 1:12 PM

Dave is correct, that cash is king, but putting any money in a mutual fund that you need to use in the short term is bad advice. Also, in the 10 months that you own each car, it also depreciates,and you still need to find a buyer who is willing to pay what you are asking. Buying a beater at the first go round makes sense, but the buy up philosphy in cars is not sustainable over the long term...you will always suffer a loss. In my opinion, better to drive the beater, save the money, and take advantage of the 0% interest offers that are out there today, assuming that you need or want to drive a new car. If you can use someone elses money for free, why not? It is also important to view a car as a long term purchase, with the cost averaged over the length of time you keep the vehicle. If you buy a new car for 20K (cash)and keep it for 12 years, that equates to $1666 per year or $4.50 per day not including fuel, insurance, and upkeep. If you can find or take public transportation for less....well?

Derek March 25 2010 2:34 PM

Yes, bring back the old animation video. I used it to send to friends when debating Cash For Clunkers. Lets just say the debate was over! Thanks Dave!

Tony Hernandez March 20 2010 9:34 AM

We just sold our 1994 Saturn to a junk yard for $150. It was broken beyond an inexpensive repair, but at 333,000 miles we more than got our money's worth. We had saved $250 a month back in the early 1990's and had about $6,000 down payment on this $12,000 car. We made payments for 2 years and then were done with payments - Now here is the interesting part. When we looked up the title we realized we had no payments on this car for 15 years. If we made lease payments of $350 a month for the past 15 years it would have cost us $4200 per year or $63,000. If we bought a new car every 4-5 years and made regular car payments of $300 a month we would have paid out $54,000 over those 15 years. That Saturn was a stick shift and we got 36 MPG average and 38 MPG on the highway. I am a bit in morning for that sweet set of wheels! In 15 years it saved us over $50,000! Nothing quite a sweet as being dept free!

Norm Barnart March 12 2010 8:48 PM

Yes PLEASE bring back the old video. I think it works better for people in my age group 18-25

Karen March 11 2010 4:22 PM

Could you post your additional videos on your web site instead of YouTube. My Internet Filter does not allow me access to YouTube. Thank you!

Sherwood Page March 10 2010 6:40 PM

After College in 2004, I drove one of my parents old cars and saved. In six months I saved most of the $7500 to buy my truck. I borrowed the rest from my parents (against Dave's teachings) and paid it off within a year. The year of insurance/loan payments, since I was still riding on their insurance, were the LAST CAR PAYMENTS I WILL EVER HAVE IN MY LIFE!!! Since driving the truck (99 Ranger) for six years, I could buy another used car, but don't feel the need to right now. When researching cars, go beyond KBB/Edmunds- dig deep, talk to other owners, browse car forums to see common problems for the model you're looking to buy, know what to expect. Some other thoughts: A friend or relative who knows how cars work is one of the MOST VALUABLE network connections you can have. Upon his retirement, my dad works at a non-profit repair shop and can use lifts and tools. I just have to pay for parts and can help out some & donate shop supplies for much cheaper repairs. Many things are rated for mileage for a reason. In most cases brakes won't last 300,000 miles, you have to plan to replace parts known to wear-out/fail (Tires/Brakes/Alternator/Battery). Also if you keep up with routine maintenance/check fluids, the car won't fall apart as fast compared to neglected maintenance/an oil change once every 20,000 miles whether it needs one or not. Take care of your car and the more often checkups/tune-ups you have, the more likely the mechanic will catch a small problem before it becomes a big one. If you have those unexpected problems, that's what the emergency fund is for...

Eric March 09 2010 11:01 AM

I'm curious... My car is paid for. It's currently worth about $10,500 (private party). It's at 85,000 miles. I'm wondering if I should sell my Prius and get a nice used car for $6,000-$8,000 with lower miles, then put the rest towards my savings/retirement. Although my car is a hybrid and I do save on gas, if I had a non-hybrid car, I'd save in maintenance simply because my partner is a mechanic and would be able to do the work for me. He doesn't touch my current car since he has very little experience with hybrids, so I do pay a lot more to have it serviced at the shop. I haven't had anything but regular maintenance/upkeep (knock on wood), but I figure at 85,000 miles it's coming up on that time. Thoughts? I guess my question is if there's a point in driving a car into the ground, or if I could be just as smart, or smarter, to sell my more expensive (but paid!) car for something cheaper and saving/investing the balance. Other info: I started listening to Dave about 6-8 weeks ago. I had BS1 completed, I had no debt so I skipped BS2, I have about 4 months' of expenses built up right now. I am maxing my Roth and putting 5% (plus equal matching at work) into my 401k. Now my extra money is just going into adding more to my emergency fund. I'm not having children, so I will be skipping #5. I rent, but once I reach 6 months of expenses, i'll start putting money to the side for a down payment on a house down the road. I just turned 28 two weeks ago. Thanks in advance to anyone with input. :)

Jessica March 07 2010 10:06 PM

B/C the Lord send me the book, Financial Peace, I have paid off all my debt, except my home and I am trying to help others become even better off than myself, this stuff works.

Elijah March 06 2010 11:31 PM

While I like the updated and shorter version of Drive Free, Retire Rich- I also really liked and valued the original cartoon animated version. Can you bring it back and also have it available? And like a fellow poster requested- could you please post both of these video links off of your main site here for ease and accessibility. Many Thanks!

Sarah Priest March 01 2010 4:00 PM

I had some great Hoopties in my youth, but have been buying nice, 2 to 4 year old cars since 1979. I'm an Adbusters Magazine fan, but I like cars and at least I didn't greedily punish myself only to lose "all that money I could have saved" in the crashes of 87 and 08 and ??. I do love the show and, as a car guy, would recommend a 2 year old Focus - or Cobalt if you must - as the best deal in America right now. Even with payments they should cost you less than, say, a paid off old SUV to drive. Missing work is so tacky. I bought a new Suzuki a while back and sure don't regret it. Remember, with anything, less is more, and double that math if it moves.

Sam Molloy February 27 2010 6:50 PM

I have an option of driving a company vehicle or driving my own vehicle and receive reimbursement for mileage (49 cents a mile). Question: Is it cost saving for me to drive my own vehicle and receive reimbursement or drive a company vehicle?

Marci Martin February 26 2010 10:43 PM

We pay 296 a month on a truck that uses to much gas and we owe 5,000 (with out interest)on it and we cant sell it because its not worth as much as we owe. We have 5,000 in savings and debt were wanting to pay on but we dont know what to do...were stuck!

Upside down February 23 2010 12:45 PM

Empowered Snowball Our primary goal is to be consumber debt free by the time our oldest son enters college (fall 2013). The online debt snowball showed me we can easily make it happen by fall 2012!! I added the home mortgage to the debt list, and learned we could be totally FREE in 10 years. The idea of putting both kids thru college, owning our home,and being debt free is awesome. I am excited for FPU class today. :)

Snowman February 21 2010 12:01 PM

A couple of years ago, we arranged to include a link to the "Drive Free, Retire Rich" video presentation on our website for military families, www.familysupportgoodfellow.org. You've apparently placed this presentation on "youtube" which is, of course, BLOCKED on government computer systems! Any way you could return it to its former location? How about possibly sending the video presentation to us on a DVD so we can have it available for our military members and families!

Charles Harris February 19 2010 9:25 AM

To: Ayen at February 10 2010 1:07 AM You have to get a L-L-Loan (yuck) for the difference assuming you have no cash to cover it plus enough to buy a beater. a few thousand dollar loan for that is way better than the 15000.00 you have now and it pays off quicker getting you where you want to be: OUT OF DEBT!

Guy February 14 2010 6:08 AM

I used to show the old presentation (animated power point) to my undergraduate students when we were talking about long-term decision making. I really like the old presentation better than the new YouTube video. I have 800 students at once, so the graphics worked well. Is there any way to get the old presentation instead? Thanks!

Jamie February 11 2010 3:42 PM

I was raised to pay cash for everything. I made it through college without any debt and was still driving my first old truck with 350,000 miles on it. When I got my first full time job, I sprung for something I had always wanted, a Cadillac! It was a used 2003 CTS with 60,000 miles on it. I justified it as a "NEED" because I would be getting paid mileage for all of my travel while working (~50,000 miles a year). Instead of being responsible and using 100% of my mileage money to pay down the car and pay on maintenance, I decided to live like a king instead. Now, I owe $4,000 on a $7,500 car that needs $5,000 worth of work.

CTS February 10 2010 11:10 AM

I drive a 2002 Nissan Quest with a year payments to go. My husband drives a Honda CRV with $15K in loan and $460 monthly payment. We managed to pay both cars even when he was unemployed for 8 months and no unemployment check coming in. But I am tired and mad at the way beyond means type of living just to keep the cars and a roof over our heads. I am convincing him to get a $2-$3K car with no payments. But how do we deal with the Capital One Auto Finance? By the way, just paid off 3 credit cards today and was so excited telling my co-workers that I am 3 down to my road of debt free life. How exciting! I just started in January and getting the hang of using cash, envelopes and a budget. I am loving it.

Ayen February 10 2010 1:07 AM

David, There is a site hughchou.org that has the calculators you are looking for...how much your daily coffe costs, pay off house faster or invest. It figures it all out for you. I use it all the time.

Sandra February 09 2010 10:39 PM

I am new to this whole process so I have a question that may seem very elementary but I am throwing it out there anyway. We have a car that is now 6 years old. We are upside down on the note on the car. How do you sell a car when you don't even have the title? Our credit is poor due to job loss, and we no longer would qualify for financing even if we wanted to. Even if we trade it in for a lower price car they will not refinance it due to the amount we are upside down on the car loan. Any suggestions? (The vehicle by the way is now in poor condition and we can not afford to fix it.)

Cassie February 09 2010 1:32 PM

Trisha, What company is your timeshare with? What are the details on it (home base, yearly, bi-yearly, bedrooms, etc.) and what is your bottom dollar selling price?

Chipper February 09 2010 10:06 AM

This is not really a comment but a question. I have a Nissan Maxima and a Nissan Murano both 2005. I pay around $400 a month each and I still owe $17K in the Murano and $19K in the Maxima. I would like to give them back to the bank and buy 2 cheaper used cars but I have heard that the bank will hunt me down for the remaining balances. I think I can sit on those balances for a while to save money but I am not sure if that is the best way. Any suggestions?

Samuel Vivas February 08 2010 3:46 PM

Need to rid myself of a very steep car payment so that i can save for retirement ... you guessed it - just around the corner and never gave the purchase of the vehicle more than a spontaneous thought. Dave says i can own a car without a car payment and he has my total and undivided attention. I have no problem down sizing on my vehicle so that i can save more money for retirement.

Marylou February 05 2010 3:09 PM

Okay, so I started listening to Dave's CDs AFTER I had leased a car..a couple of questions...is there a way out of the lease? also, the premise behind it is my company pays the car payment each month but the company just filed, Chpt 11 bankrupcy, so I am optomistic that we will come thru this, but want to prepare as though it will not. I have a 17 mo. lease with low miles on the vechile...can anyone lend advice?

Nat February 03 2010 7:30 PM

We drive a '89 Honda Accord and '87 S10 truck sometimes, but our main car is a 2007 Honda Civic which we bought used and paid in FULL at time of purchase.

Carl & Maxine January 31 2010 12:11 PM

Trisha, you can try advertising your timeshare on Ebay or the timeshare sales sites online. The person buying the timeshare will pay the annual maintenance fees and you'll be free.

Carl January 31 2010 12:08 PM

I didn't plan to write a book, but here we go: Too bad that just about everywhere in this country you have to have a car. I'm a divorced dad in Dallas with joint custody, so I'm stuck in this suburban sprawl. I've taken several business trips to Europe and I wish our communities were built like some of theirs. It is so easy in many parts of Europe to get by with only a bicycle or a scooter, a modest home with a backyard garden. Most people here need a big garage and big SUV to make the big trip to "Megamart" to buy the 40-roll packs of paper towels and toilet paper which means we need a big house to store it all. Then we work 50,60,80+ hours a week with maybe a two week vacation that we don't have time to take due to work obligations; while in Europe they get in trouble if they work more than 37 hours in a week, and they worry about how they're going to spend their mandatory 4-6 week vacation. But at least we live in the richest nation on earth! I'm not trying to bash our own country, but just to drive home the point that the car was meant to set us free, but it seems to have enslaved us instead. Society is beginning to change, but in the meantime I am absolutely convinced that the "right" older used car and enough car knowledge beats the new car every time. I own a 10 year old "beater" and I just bought a 6 year old car in good condition for $2800. I've already relied on the "beater" twice. Since I had my "beater" I was able to change out a bad battery without a tow or paying for a AAA membership. A few weeks ago my alternator went out. I had a mobile mechanic check it out and they quoted $2300 for a dozen repairs that "had to be done". I bought an alternator myself and replaced it in my employers' parking lot where the car was sitting for two weeks while I was trying to get around to it (I have a busy job and demanding 3 and 6 year old kids). Without the basic car knowledge people can spend an absolute fortune on car maintenance, especially when they don't know their shop is just ripping them off with unnecessary repairs. I also learned a long time ago that renting a car is a huge money drain while looking for a replacement or waiting for a repair. One half-decent used car and one bare-minimum beater or scooter can save fortunes when trouble comes around. As for safety, I hear people with so many concerns about the safety of the car they drive - then they take their motorcycles out for a ride. At least some of them wear helmets. Like that's going to matter when they slam into my "beater".

Marc January 30 2010 12:39 AM

Obviously the system works...Dave is a millionaire. Buying a new car is a waste of money...plain and simple. Not discussion needed.

Sara January 28 2010 12:46 PM

Nobody has mentioned the possibility (or desirability) of owning 2 used cars. One with good milage, etc, for most driving and a second like an old pickup for hauling stuff or using when the first needs repairs. I think that is another benefit of buying older used cars - not so hard to afford two.

Mark January 28 2010 1:23 AM

I hate having car payments. I had a 1998 Saturn SC2 that was paid for until I was in an accident that totaled the car. It had 124,000 miles on it and was still going strong! I now know that the insurance company gave us enough money, (I wasn't at fault), to buy a good used car. Unfortunately, I didn't know of Dave then, and the people I asked for advice all said I should use it for a down payment on a new car. Fast forward to today...we had to upgrade to a bigger car because we started our family, and are now upside down in our 2007 Saturn Vue (we bought it new at the end of '06). We got a great interest rate, but the payment is still insane. The good news in all of this, is 3 months ago, we listened to Total Money Makeover in audio book form. It changed our whole perspective. We have started our debt snowball, and are looking forward to about 3 years from now when we will be debt free, except for our mortgage. I read someone's post about selling a car even if it's upside down and paying the difference, but that isn't possible for us right now. I think we're just going to have to ride this one out, with the knowledge that this is will be our last car we buy on credit!

Melissa January 25 2010 11:18 PM

I don't see how this works. The stock market does not average 12% year to year over the course of 5 years. not even close. It might average that over the history of the stock market's existence, but that is also doubtful. So that's the first flaw. The next flaw is that given that you could put your money in a mutual fund that is liquid and that pays 12% over five years, cars cost more every year. Every five years that $17,000 will buy you less and less car. All you need is one really bad year on your mutual fund, like last year, and you won't have the money to buy a new car in five years. It could take 10 or 15 years to catch up for some. While buying a new car is not a great idea, this method just does not add up in reality.

Sam January 25 2010 11:02 AM

My 18-year-old daughter wanted a new $20,000 car, but settled for a $500 Toyota Corolla with 89,000 origional miles on it. Vehicle has new interior, paint and tires. Mechanically sound. Should get at least another 100,000 miles out of it. It pays to wait and shop around. Happy hunting.

Steve January 25 2010 12:30 AM

Used vehicles of around 60,000 miles usually have most "bugs" worked out plus the retail value is much lower. In many cases about 50% of the cost of a new ride with close to the same options. If you buy new, your insurance and title work costs twice as much as a 5 year old vehicle. The fuel mileage is sometimes half that of the older model until it is broke in. This can take 20k to 60k miles. If you do the math, the new vehicle costs twice as much to operate, not including the upfront cost. I would recommend buying 4-10 years old with around 50k-70k miles.

Scott January 22 2010 8:15 PM

I went aginst one of my "I'll never do that" principles and purchased a time share with a relative)in 2007. I immediately paid it off with a 3.99% interest rate offer using my credit car. The relative has lost theri job and I have made virtually all the payments and yearly amintenance fees which totals @$900. I do not use the points and am to the point where I'm about ready to give the timeshare away (to anyone)so that I'm not throwing away good money every year. I've accepted paying the credit card off, and guess that just quitting paying the maintenance would negatively affect my good credit.? How can I get rid of it???

Trisha January 22 2010 6:35 PM

I always buy used cars and they last me a long time without major problems. My last car actually had over 100,000 miles on it when I bought it. Was running and looked great when I got rid of it 3 years later because it was too small for my family. Bought a used SUV with only 40,000 miles and in great shape. My mom's brand new Mercedes was in the shop 4 times the first year for various problems. New cars do have problems too. I can't wait to pay cash for my next new to me car!

Rachel January 21 2010 11:43 PM

My husband & I share a 2000 Saturn wagon & have no payments. It feels great. We have saved a ton of money since going to one car. The last time we drove a car w/o payments was probably 1980. We will probably put about $1500 into the car this coming year. We also have a car fund. But if we have to take out a small loan to finance the next car, I'm not going to sweat it. Sometimes folks can take this "no debt" thing a little too far. If we do take out a car loan, it will be at a good interest rate (the benefits of a good credit rating) and for only two years as we're nearing retirement. We'll make it a small loan - if we need a loan at all. We are comfortable with a small car loan as we don't have any other consumer debt. Paying cash for a car might mean that we have little emergency cash left since most of our money is in retirement accounts that we can't touch yet. I think what people really need to avoid is buying too much car, just like they need to avoid buying too much house.

marian January 21 2010 1:33 PM

Christy- that is awesome that your daughter did that. I need a new car soon and I think I will have to use that line, because I enjoy not having a monthly car payment.

Jessica January 20 2010 10:00 PM

I was wondering if I should buy a used vehicle. We have 2 paid off cars but the vehicle I drive the children around in is a 1989 Chevy Suburban. We have put alot of money into this vehicle to keep it running. My issue is that it is only used for shuttling the kids around town. I have noticed that more and more little things are starting to leak and make noise. We are not looking at a huge loan, the vehicle we want is a newer Suburban (between 99 and 03) with a loan of about $7000 or less. It would be paid off in 2 years. My kids started karate recently and we are going to start having to drive to other cities to do tournaments. I worry about being stranded far from home. Can I justify this purchase?

Mars January 19 2010 1:22 AM

What happened to the old powerpoint-ish presentation? I feel that it presented the concepts MUCH more clearly then the youtube video.

Bob64 January 15 2010 3:56 PM

I have a couple of gas guzzlers that have been paid off but have alot of mileage on them. Does anyone know of a calculator that can consider gas saved versus monthly payment?

David January 15 2010 11:38 AM

I remember when I was in high school my mom purchased an investing book for me! In the book it gave an example of a person who purchased a used car and one who bought a new car...long story short, I have lived the life of the person who bought the used cars. I am 29 years old and have never had a car payment. I have always saved up and paid cash....I love the feeling! I am still working on my house debt though!

Joel January 14 2010 8:35 AM

Greg, I feel your pain. I too have been the victim of the upside down vehicle. In fact, I have posted my comment on here already. I am the one that had the truck payments for eight years that were a third of my take home pay. I was so glad when I finally retired that truck loan last July!! I think that Dave Ramsey would probably tell you to sell the SUV and, if you are unable to get enough to pay it off, you may have to write a check or either borrow the money for the difference and to buy a temporary clunker. Or, if you have a close knit family like I do, you may be able to borrow a car temporarily until you are able to save up and buy something better. Well, that is what I think that DR would tell you... Mike!

Michael January 13 2010 3:20 PM

I am upside down in a 2004 Ford Explorer. I am new to FPU. How can I get out of this SUV and into something with no payment? Or can I. I have a payoff of roughly $13,500.00 and a $450/month payment.

Greg January 12 2010 4:09 PM

I just started the F.P.U. program however I have learned by way of experience to avoid debt when possible. I do have a car payment at this time but had a period of about 5 years without one in the past it was wonderful! I am looking forward to getting it paid off, I purchased it while the dealer was very slow and got it for $5000 under book. I just purchased a 2008 truck for work, by shopping I found it for 1/2 the price of a new one. My employeer gives me a monthly allowance and pays for all fuel. In turn I am required to have a vehicle that is 5yrs or less old. The allowance more than covers the payment and expenses. My goal is to save and place larger $ down with each update. My overall goal is to retire debt free!

Paul January 11 2010 8:31 PM

We have 2 cars paid off. 2008 Ford F150 and 1995 Nissan Pathfinder all have extras. We are spending to much in gas and my husband is now unemployed. Is it a good ideas to get a 0% interest on 2 used cars for 2 years invest the profits and then payoff in 2 years?

Kelly January 10 2010 3:00 PM

My mother actually taught me many of Dave's principles when I was little. I stayed with them and did well financially until I had a major life crisis that had me listening and following a lot of bad advice. I eventually financed my first car about 4 years ago and quite frankly, I HATE having a car payment with interest!!! I wish that I had known Dave was around when I went from logical to emotional on that decision! I'm working on becoming debt free now and when this vehicle is paid off, no more financing! Thank you Dave.

Jeanette January 10 2010 12:57 PM

I drive a 2000 Ford Explorer that has been paid off for the last 3 years and I LOVE IT!!! I'm a single mom and it's a "beater" by some standards. I replaced the engine about a year ago then immediately was the victim of a hit & run. No one was hurt and the car is still running great. With the new engine, I expect to get another 4 years out of the car. But my 15 year old son wants to help fix it up a bit and "buy" it from me next year so he won't have a car payment, it'll still be handy for me to use and I'll be able to get my used, paid in cash Jaguar I'm already saving up for.

Debbi January 08 2010 4:27 PM

After eight years of truck payments that were a third of my monthly take-home pay, I decided that I was tired of writing the bank a check every month. I learned about Dave Ramsey and the TMMO. I completed FPU last May and in July, I finally made my final truck payment to the bank! I am now DEBT-FREE!! WOOOOOO!!! After eight years of having truck payments, I vowed that I would never again have another vehicle payment, even if it meant buying a clunker. I enjoyed the Drive Free Cars For Life video, and I think that is a great idea. However, this is the only concern that I have. I liked the idea of "paying yourself" the car payment and having a special car replacement fund. Instead of placing this money in a mutual fund, I thought about putting it in a money market account, but I would like to earn more than 1% on my money. I don't know if I like the idea of putting my car replacement money in a more riskier growth stock mutual fund. What if the fund tanks just as I need my money to buy another truck? I think that somewhere in the middle would be what I am looking for when it comes to replacing my truck. What do some of you think? What do some of you recommend? Mike!!

Michael January 08 2010 1:55 PM

I'am a widow with 02 Camry and 07 Yukon, paid for. Love them both but trying to decide if I should sell one and bank the money. The Yukon feels so safe and has all the bells and whistles for winter etc., the camry is great for town driving and parking, gas milage- decisions. Quit work to take care of hubby before he passed so on S.S., any suggestions, maybe I'am lucky to have both vehicles but should save more.

Carol January 08 2010 1:16 AM

I have a question. I don't have car payments. How will I get to save car payment money if I've not had one in 3 years and I did not know about the plan then? I don't have that money as I used it for debt. now how do I get a newer car with no money? I'm still paying debt?

Cheryl January 05 2010 8:57 PM

Ken that bough the Chevy Malibu with 45k miles. I just checked Kelly Blue Book (www.kbb.com) and it looks like the private party value for your car (assuming the higher trim LS with 3.8 liter v6) is about $5200 in good shape and $5600 in excellent shape. Folks, paying cash is way cool but we've got to do our homework before we plunk down our hard earned cash! Good luck and happy new year everyone!

Kirk January 04 2010 3:02 AM

I developed this mindset independently, but I have to say it has done a lot for me. Friends and relatives are always trying to tell me "it isn't worth it to buy a used car. It'll eat you up in repairs." The math says different, though. For anyone who has any doubts, multiply your current (or last) monthly car payment by 12 months and compare it to a "worst case" car repair scenario. Many, many people are paying $300.00 or more a month in payments for their car. That's $3600.00 dollars a year! That is enough to pay for a transmission or an engine to be repaired or replaced on many cars. The fact is though, that most people will at the end of the year show a net profit from driving the $2000.00 car. Sure it hurts to write those checks for new brakes, or muffler, or set of shock absorbers, and etc. But for me, in any particular year, I can subtract the repairs from a theoretical average car payment and be a couple of thousand dollars ahead. To a certain extent you are taking a gamble, but if you check out a used vehicle well you should be fine. Also, if you only spend one or two thousand dollars you can afford to walk away if a major breakdown occurs. The most radical concept that has helped me out (though I haven't convinced too many other people!) is that every mile you drive moves you one mile closer to maintenance or a repair. Therefore if you cut way back on unnecessary driving your vehicle will last correspondingly longer. Younger people have the most difficulty absorbing these concepts. But it may help if they can see this way of living as only a temporary thing until they get control of their finances and build up their savings.

JohnS January 03 2010 4:13 PM

My grandfather paid for my first car when I was going through an awful divorce and "won" the car note as part of the settlement. He taught me then to never buy a car on credit. We now have two paid for cars in the driveway and took our daughter to buy her first car. She shocked the saleperson when we walked in after months of research, test drove the car at the used lot, and then sat down to discuss the money. She said, there would be no discussing. She know they final price, and write the check. Done. Finished. She owned it when we walked out the door. She is 17 and adults in the car place were freaking out! It was great to have the opportunity to share our saving plan with them and let her explain the disasters of owing forever on a car when you haven't even left home for college. It is a well cared for 2002 honda accord with 100K on it. She says we can expect to see our grandchildren learn to drive on this car! We all started laughing.

Christy January 03 2010 11:02 AM

I drive a paid for 2002 Toyota Sequoia and LOVE not having a payment!!! I will continue to drive it because the only cars I might want more cost over $700 a month...NOT worth it!

Brittany January 02 2010 9:27 PM

Dave, YouTube doesn't always work because of the error message about javascript - is there another way you can post the video? Thanks!

Sara January 02 2010 11:55 AM

I completely agree with Dave on buying used. I do not understand how a few people on here can say new cars are safer than old. What new items does a 2010 car have that you can't find in a used 2005? We have been debt free (other than mortgage) for over 5 years. No car payments has been GREAT! My car has airbags, antilock brakes, traction control and one of the highest crash test ratings and it is *gasp* 10 years old. We have been pocketing the savings and have thousands in the bank. Yes we have the occasional repair, but still come out thousands ahead of what a car payment runs.

Crystal January 01 2010 12:10 PM

Getting past that "New Car Bug" is one of the most difficult things you can do. Once most people get it, they will, sooner or later, justify buying a NEW car. I have talked myself out of a new car for the past two years. In that time, I have saved approx. $6,600.00 minus the repairs of about $1,000.00 for a Honda leaves me approx. $5,600 in the green. I can see how the principal works. Great lesson.

Robert December 30 2009 4:34 PM

Just before we read Dave's books and started watching his TV program, my husband and I purchased a new 2009 Colbalt - not a luxury car by any means -but I was wondering whether we should sell it and get out of the $291.00 car payments and purchase a "beater" car for a few thousand? What do you think Dave would suggest we do?

Sheryl December 29 2009 6:53 PM

I will weigh in subject. I'm driving a 96 Silverado pickup that qualifies as a clunker. The truck wont pass inspection because it needs a $600 fuel injector assembly - well thats what the mechanic said in April 09. Been driving it since (no inspection, cross your fingers) and its been fine. I'm a decent enough home mechanic that i can deal with this. I've actually learned more that way about cars, more so what parts are critical to the reliablity of the vehicle and what maintenance you can let go. I'm sure that will help me when I buy my used four year old lexus/volvo with cash in a year or so! and that will be no car payments and no debt!

Brian December 29 2009 3:11 PM

I am all about saving money, budgeting, and being debt free, but not at the cost of my children's safety. With a toddler and new born, I'd rather spend the extra $300 a month driving them around in a vehicle that has front and side airbags, Onstar, and other safety features that are NOT in the older models. I don't buy new, but only a couple of years old, but nothing were features are outdated. I think that investing in my childrens' lives are a good place to spend the extra money. How can I ensure for their financial futures if they aren't even there because I wanted to save a couple of hundred bucks a month? I'd rather that money go into their safety, and not other things.

Grace December 28 2009 6:53 PM

It doesn't always work out to buy used. Even if you know a lot about cars or have someone closeby that does, I think you have to keep more in savings in case something happens to the car. My family has always except for two cars bought used and they were always being fixed. If you're a guy and know when you are getting ripped off, then buying used might not be too big of a hassle. There are always unexpected expenses, too. I bought a used Toyota Avalon and it ended up having major issues, and I had it checked out by a mechanic and having done my research.

Leakhena December 28 2009 9:57 AM

Just bought my first all cash car. A 2002 Impala form an elderly man. The car had only 45k miles on it! Wrote a check for $7500. (And yes folks I drive my kids around in it!) Feels great to have no payments. If you look around, you can find a great dependable car for alot less than you think and with no payments! Thanks Dave!

Ken December 26 2009 4:31 PM

I just took my first step and sold my 2007 Toyota FJ Cruiser and bought a much cheaper car. I do miss my FJ more than anything (it was my dream car), but I am saving over $400 a month on payments, gas and insurance. Some of my family and friends thought what I did was a dumb move, but I like saving the extra money!

Mary December 26 2009 2:21 PM

Yes that new car will give you temporary satisfaction and you will work till you are 70 years old before you retire with that kind of thinking.

John December 25 2009 5:16 PM

Where is the line at which buying a newer vehicle is a wiser decision than fixing a beater. I have a 99' pontiac that is shot and no savings. I can go into debt for a 2000.00 car or a 5,000.oo car or just get a beater a pray my wife and kids make it. What is wisdom here?

Kasey December 22 2009 7:29 PM

I work hard for my money. I want to enjoy the fruits of my labor. A new car gives me satisfaction. When I die I cannot take my money with me, I might as well enjoy it while I am alive.

shawn December 22 2009 10:30 AM

I own a 1999 toyota tacoma 4 cylinder it has 315000 miles never a major problem. I change oil monthly. I have replaced maintenance items like spark plugs starter alternator and once i changed the gaskets on the blocks. I also have a ford ranger with 290000 miles. My wife asked me when am I going to get new work trucks, or what happens if the engines die? I tell her it is cheaper to replace an engine than it is to buy a $24000 new truck that I would pay interest on and it would be worth less then when I bought it in less time it would take me to save up $2000 to replace the broken engine. It makes since to me how about you?

David Westmoreland December 21 2009 8:49 PM

I bought a 1983 BMW 318IS 8 1/2 years ago for $8500. It had 175,000 miles on it at the time and it drove like a new car. It now has over 360,000 miles on it and it still handles well, although it now has a number of cosmetic problems and I have to check the oil regularly. Original motor, original clutch, and it still gets 30 mpg! My husband has replaced the starter, alternator, radiator and misc belts over the years, but it has been a VERY reliable car. It's getting to the end of its life and I'm thinking about looking for another one. It's SO NICE not having a car payment - I NEVER want to go back!

Kathi December 21 2009 4:46 PM

I go against one of Dave's directives. I buy NEW vehicles. But I keep them on the average of ten years. Washed once a week, and maintained meticulously these vehicles run as well at 10 years as new. With the long period of saving between vehicles, when ushered into the financial guy at the dealership, I get to ask my favorite question: "What kind of rate can you give with 100% down?"

Terry December 19 2009 4:21 PM

I bought a 1998 GMC Suburban with 200k for only 1500 dollars! Got it from a friend. I have put a mindblowing 50 dollars into it since I bought it. And for those of you scared to buy a beater because of repairs, go take a quick class at your local community college for mechanics. Its very cheap and it will really blow your mind how much you can do with a basic understanding of cars, not to mention how much money you will save.

Hamilton December 18 2009 4:48 PM

Paid $1700 cash for a 9 year old car in Dec 2005 with 100k miles. Still driving a PAID FOR car 4 years later with only minor repairs. I love my car and it's the only one in the parking garage at work that I don't wonder if it will be stolen. LOVING LIFE WITHOUT A CAR PAYMENT!

Susanna December 18 2009 1:23 PM

Don. Not necesarily the case. I own a 1990 Lexus LS400. I was going to "upgrade" to a 1998 Toyota Corolla. To my surprise I found my insurance premium was going to increase. Huh? I asked the insurance agent and was told that the newer car was not as safe as the 8 year older car.

Mike December 18 2009 8:11 AM

I've got a two year car with payments and insurance. Wish I had came across Dave sooner. I really could have gotten by with buying a two year old car to begin with. Even if it needed repairs once a month, it would have saved bundles. Even if you have a beater, you can rent a car for long trips. This is the last car note I'll ever have.

Dwight December 17 2009 10:07 PM

I agree 100% with buying used...in fact, I have an amazing luxury car certified from BMW with existing warranty, including brakes oil changes etc and low miles...how old is the car? 4 years...not only do I feel safe, but with BMW roadside assistance if anything goes wrong they more than take care of you. Which brings me to a good point about cars...stuff does go wrong and new or old they can break down. AAA is a great backup plan for people and has a low cost.

The Doc December 17 2009 4:34 PM

To Greg: I felt your way too. I had just bought a new car when I found Dave. Just know in your heart that this is the last car with a payment you will have. Work the debt snowball and have a car fund. There are great 2-3 year old cars out there. In fact, many are now repo's because people could not keep up wiht payments. My wife and I just paid off our car. Now that car payment is killing other debt. Trust me, I works. Save well and you can buy a nice used car that you can trust your family in. I learned to make sure you know what you are buying. Make sure it has a good history. You will be feel a greatest relief in the world when you finally get out from under that car payment. I was the biggest car fan ever, now I look forward to the day I can by whatever I want IN CASH!!

Cregg December 15 2009 2:39 AM

It sounds like this will work if you have no current car payment. But if you're already paying one then you have no money to save. Also, I'm not too crazy about putting my wife and children in an $800 car and trusting that we'll make a long trip w/o in breaking down along the way.

Greg December 14 2009 2:13 AM

I have a 99 Mercury Cougar with 185000 miles on it. The greatest feeling is knowing that I own that car. I put $1200 in repairs in all of 2008 but still felt good knowing I wouldn't be able to find a car with a payment less than $100 a month.

Ed December 13 2009 5:17 AM

I had PLPD insurance once on my car. A few months later my car was stolen. Thank God the police found my car a day or two later. I know liability insurance is easier on the checkbook, but full coverage is easier on the heart!!

Matt Craig December 12 2009 1:30 PM

One word "WOW" almost none of you understand what Dave is saying. I drive a 92 explorer also. 200k and starts every time. 23MPG You vehicle is only as good as you treat it. If you don't put a single dime in it, or never service it, a NEW car will die just as fast! With your $300 car payment you are giving 150 or more to the bank, because You couldn't wait one year. Now you are paying for it in three years. Why does this make sense to people? Let face it, you can justify wrong answers all day, Just like you can justify sins all day. But at the end of the day how much $ is in your pocket and how much in the banks?

Brett December 11 2009 3:27 PM

The safety of newer vehicles is far superior to older vehicles. If that is a concern for you, the newer the better and the bigger the better. It is proven that the larger the vehicle the safer you are in the case of an accident. Cars made in the last 5 years are far more crash worthy than those made 10 years ago. Now I am not saying go out and buy a new car but when shopping for your next free car remember the closer to the current year the safer it is.

Don December 07 2009 3:04 PM

My old car finally shot craps, I sold it to the mechanic who fixed it up and is driving it around town!!!! That's fine because this was my opportunity to buy my second used car with CASH!!!! I used the power of cash to buy my 2002 Monte Carlo SS and it only had 53,000 and was a 1 owner. I am taking my old car payment and putting it into a replacement car envelope and hopefully when the Monte Carlo dies, I can get another good used car. I like paying myself instead of the bank every month!!! Daves plan is definetly a crock pot approach, not a quick fix. His plan breeds patience...which is not a quality I claim to have!!!!

jnewell December 06 2009 8:09 AM

i am a mom of 3. we have a '92 camry & a '98 buick. both are old, both are paid for, and both work very well. driving an old payed-for car does not mean putting your safety at risk. i understand wanting the feeling of security, but the security i have in my nicely padded bank account far outweighs the security a newer vehicle would give me.

heather December 04 2009 9:08 AM

Shawn - For the windshield - check with your insurance provider. They typically cover windshield replacement 100%. I just learned of this from a friend and had my windshield replaced no cash out of pocket after making a quick call to my insurance agent.

D December 04 2009 8:48 AM

I currently have no payments other than my morgage. I own Harley RK, Ford Expedition, Corvette vert, BMW M3 vert and 24' speed boat all paid for. I spend close to 2400 a year for insurance for stuff setting in my garage. I may need to rethink!!

MAJ Smith December 04 2009 5:15 AM

I have a 1992 Ford Explorer. It has about 250,000 miles on it. It will be two years in March of 2010. I paid only $700 for it. I have a question not so much as a comment. There are some possible repairs I will need like replacing the windshield soon and the clutch. I'm just wondering what you think about this based on what Dave's advice is for cars.

shawn redding December 02 2009 7:47 PM

No one is saying buy an unreliable vehicle. ( well maybe in dire straits; something is better than nothing) At worse buy one that can be reasonably fixed up. Then in the long run you'll save money from not having monthly payments. That's the point and the goal; no monthly payments. Then as you save up enough money in your car fund ; you can upgrade to a "better" car. I say that in quotes since it maybe in looks or the car is not worth the upkeep in repair cost. Whatever you think is better. Agreed, that theres hardly a difference in $400 in repairs cost every month and a $400 car payment. But a new car will eventually need repairs and maintance on top of the monthly bill. Realize that once you drive a new car off the lot, its no longer "new". Then its a used car. So that means it loses a lot of its value. So 2nd point eventually buy newly\gently used cars. You normally get or can the same warranty just like new ones. Cheaper usally away from the dealer. I've never seen a "new" car with all zeros in the odometer. I've seen 3-10 miles on them already. Face the fact it needs to be test driven and they add up. I would suggest always keeping the most insurance you can get. You never know when an uninsured/under-insured or hit and run will get you. Worse if you caused an accident. Then you are sued over damages or medical issues.

chris November 24 2009 5:47 PM

Sorry William, but that mentality will never allow you to "live like no one else". Take Travis's advise.

missy November 21 2009 10:19 AM

I worked many years as a mechanic at a high end automotive dealer and I hate to break it to those who think they are safe in a new car because it is "dependable"... Brand new cars break everyday, sometimes with less than 1000 miles leaving customers stranded. A reliable, used car is safer in most cases because the "bugs" of a new car have already been exposed and fixed. Buy a used car from a reputable dealer, and above all have a trusted, honest mechanic check it out before you buy! The small price you pay for a check out fee may save you thousands down the road in repairs.

Travis November 19 2009 12:46 PM

Being a single mom in a big city with lots of crime this would not work to my advantage. I need a car I can depend on that won't break down in the dark every time I turn around. I like the idea but it won't work for me. Tried it once. Didn't like it.

Winn November 17 2009 12:08 PM

Bought a used Suburban put about $3000 into it and now it runs like a champ. Total cost is less than what 4-5 year old model cost and saves me big on insurance. It's amazing how much money you can save and invest when you aren't making car payments and full coverage insurance. Build up that emergency fund and when unexpected repairs come around there are no worries because hopefully you've saved all the money you would be spending otherwise on a new car.

Nate November 15 2009 7:18 AM

I AM TIRED OF CAR PAYMENT

curtis gayle November 14 2009 2:36 AM

I sold my car last spring and bought my first beater...not exactly a GREAT experience since my beater wasn't the best and I ended up paying (parts only, thank God for great family with excellent skills!) another $1100 for repairs, BUT I now have paid for car in the driveway that I plan to keep for at least ANOTHER 150,000 miles :) Drive til you drop, little Honda!

Suzi November 13 2009 5:51 AM

Free car for life: Does this mean that you're buying used cars? How can you save $400+ if your car breaks down? How many miles on these used cars? Will it last another 5 years? I can see disadvantages, considering several variables.

william November 11 2009 9:07 PM