Anyone go from always buying their cars to leasing?

[SouloTravlr]

Sweet. The Mazda3 is a phenomenal car, great choice!!

Who is Dave Ramsey?

A snake oil salesman.

 

[tvguy]

Dave Ramsey is a financial guru who is anti debt/anti credit...... CASH is KING!!.

Not a follower of him, but I gather is of similar mind as Suze Orman, Gail Vox Oxley, etc, basic financial common sense.
But in America, we're free not to use financial common sense.

 

[DLgal]

Not a follower of him, but I gather is of similar mind as Suze Orman, Gail Vox Oxley, etc, basic financial common sense.
But in America, we're free not to use financial common sense.

I might argue that Dave Ramsey doesn't use much common sense. He seems anti investment, by so strongly pushing for absoutely no debt. Paying off a mortgage or other low rate loan early is one of the most foolish financial strategies ever, considering the historic performance of the stock market. Why pay off a loan at somewhere between 3-5% if you can invest all that "extra" you are throwing at it in the market and make twice that, on average, in returns?

And suggesting that credit cards are evil and that they are ALWAYS BAD is also just wrong. You can make a LOT of money using credit cards with good rewards. I've netted thousands of dollars this way. Why leave free money on the table?

 

[TheSouthernBelle]

I might argue that Dave Ramsey doesn't use much common sense. He seems anti investment, by so strongly pushing for absoutely no debt. Paying off a mortgage or other low rate loan early is one of the most foolish financial strategies ever, considering the historic performance of the stock market. Why pay off a loan at somewhere between 3-5% if you can invest all that "extra" you are throwing at it in the market and make twice that, on average, in returns?

And suggesting that credit cards are evil and that they are ALWAYS BAD is also just wrong. You can make a LOT of money using credit cards with good rewards. I've netted thousands of dollars this way. Why leave free money on the table?

Agree on some principles of his and then we've digressed on others. He's very anti-gym membership, my husband and I need our gym, I don't follow all of his methodologies but for someone who has had CC debt and been in stupid car leases, it's changed our financial future for the better. I don't disagree that credit cards can be good and have their benefits but what you have to remember is that he's not helping people who are responsible and paying off their balance every month, he is dealing with people that have over leveraged themselves and have nothing to show for it but for ridiculous loads of debt. So for the purpose of people who need help getting out of debt, it's clearly obvious that they cannot be good stewards of their money and maintain a zero balance on their cards. It's only free money so long as you don't incur interest.

 

[tvguy]

Agree on some principles of his and then we've digressed on others. He's very anti-gym membership, my husband and I need our gym, I don't follow all of his methodologies but for someone who has had CC debt and been in stupid car leases, it's changed our financial future for the better. I don't disagree that credit cards can be good and have their benefits but what you have to remember is that he's not helping people who are responsible and paying off their balance every month, he is dealing with people that have over leveraged themselves and have nothing to show for it but for ridiculous loads of debt. So for the purpose of people who need help getting out of debt, it's clearly obvious that they cannot be good stewards of their money and maintain a zero balance on their cards. It's only free money so long as you don't incur interest.

Don't follow Dave Ramsey, but the gym membership thing is interesting. I swim twice a week at the gym, well worth the $25 a month membership fee. A lot better than the $100 a month it would cost for a pool guy, and that's not counting the $20-50,000 for the pool!
I never thought I would pay for food with a credit card. The old rule of not charging something that would be gone when you got the bill. But I do for the rewards.
I don't buy gasoline on credit. The 26 cent a gallon lower price at the cash only stations is greater than any rewards.

 

[NinaBella]

Don't follow Dave Ramsey, but the gym membership thing is interesting. I swim twice a week at the gym, well worth the $25 a month membership fee. A lot better than the $100 a month it would cost for a pool guy, and that's not counting the $20-50,000 for the pool!
I never thought I would pay for food with a credit card. The old rule of not charging something that would be gone when you got the bill. But I do for the rewards.
I don't buy gasoline on credit. The 26 cent a gallon lower price at the cash only stations is greater than any rewards.

$25 a month gym membership sounds great. I imagine you live in a small town by many of your posts. My last gym membership was over $100 a month per person. I also was in a fitness program that was $179 a month.

 

[agavegirl1]

Not a big fan of Dave Ramsey. I used Debt Proof Living's site and their calculator to get out of over hundreds of thousands of dollars of debt when I was married to my now Ex. He was terrible with money. Mary Hunt is the person who runs the site and writes all the books. There are tons of articles and archives on anything from grocery shopping, making your own cleaning and laundry supplies, major purchases, saving, etc. I also watch Suze Orman and have found some of Ramsey's advice good. I am debt free except for $78,000 left on the mortgage on our city condo that I own with my now husband. He bought it before we met. I already own a home.

 

[tcufrog]

I own my car. It’s 5 years old just had it’s 100k tuneup. I’m about to give it to my parents since they need to replace their car and can’t afford to. I plan to buy one to drive another 5 years and then hopefully give it to my 11 year old for his first car.

My husband, however leases cars. He gets bored with his car every few years and wants to switch. While I’m not a fan of that choice, he works very hard and this is his one indulgence so I don’t say anything.

As for credit cards, we have one that we use everywhere except Target. I use a Target debit card to get 5% off. We treat the credit card like a debit card and pay it off every month. I use the points to buy airline tickets or to pay off the credit card debt, depending on which gives a better return at that moment.

The only debt we have other than the auto lease is our mortgage and that’s half paid off. We could pay it off fully but we’d lose the mortgage deduction on our taxes and we currently get a better return investing the money. Our think our mortgage interest is 3.5%.

I think that a lot of what Dave and Suze day has merit but financial advice is rarely one size fits all. Not all of their advice makes sense for us.

We are for the most part very conservative with our money because my dh is in a very volatile industry. During the last industry downturn we had to go for a long time without a salary to keep his company afloat. Luckily we’d been living below our means so we had a lot of money saved up.

 

[Euby]

Only 84,000 miles? Thanks for convincing me to never buy a Volkswagen. Our cars have 130,000 and 150,000 and are both still going strong. No car payments in the last 7 years.

My 2004 Volkswagen Beetle has 178,000 miles on it and still runs very well. There are some cosmetic things that have gone wrong, but (knock on wood) I've not had any major mechanical issues.

 

[Ben E N]

My 2004 Volkswagen Beetle has 178,000 miles on it and still runs very well. There are some cosmetic things that have gone wrong, but (knock on wood) I've not had any major mechanical issues.

Sounds good. That's what's going on with the 2002 Escape. Runs super smooth but rust is starting to take hold, muffler is getting old, etc. Very impressed with the engine performance though.

 

[amcnj]

Also depending on where you live and your state/county tax laws, you'll either be paying new property taxes on the car each year or they roll that into the cost of the lease which is insane to do that on a new car every 3 years. In our area, a $40K car is about $800/year for property tax. This of course will vary by area but it's not a cost I'd want to repeat paying just to have a new car every 3 years, new car smell and excitement wears off, the sting of the car payment never goes away!!

There are so many negatives to outweigh any positives you can gleam out of leasing, it's bad news don't go down that road. Unless you have a lot of money to throw away, I can't see making financial sense out of leasing.

Where I live you pay sales tax at time of purchase, but I am unfamiliar with this property tax aspect to owning a car. So your state requires you to list it as an asset each year and you pay an amount each year based on its value? Does the amount you pay decrease each year as the car loses value, and if so, how do you determine its current value each year? Or do you pay that same amount based upon the initial cost ($800 in your example) each year for as long as you own the car? I wonder how widespread this concept is.

 

[amcnj]

I know some people like the "new car every three year" option. Most financial experts contend that buying a quality used vehicle (previously leased or used as a rental and refurbed), maintaining it well (all it's maintenance appointments) and driving it until it dies is the least expensive option. I don't mind my "old" 2007 Buick Lucerne that I bought new at a huge discount due to being a close out of the previous model year. I have had it 10 years and it has about 99,000 miles on it. At the 90,000 mile maintenance appointment, I needed a new battery. It still had the original battery.

It is still a nice looking car and when just through the car wash, looks really new. I guess I'm just old school. My step dad actually buys a new car every three years for cash. That's his preference as he hates having a car "in the shop". I'd buy his old one in a heartbeat but I've had the same car in the same time he's had three.

The discounted buy approach is what I try to do too, mainly because I have never had to have a car immediately due to one totally dying. Anyway, I try to buy when there are large incentives, either for end of year clear out purposes or just inventories are piling up on lots. My last car ended up being about 25% off MSRP, less than the two year old used ones also on the lot. I tend to keep cars a long time, or at least a lot of miles, and don't want to get to the "repair of the month club" time. Usually I actually start keeping my eye on the incentives once a few repairs crop up or I am in the 200,000 miles area. I drive a long distance to work so feeling the car is reliable is important right now. So far as repairs, I always look at the cost of a repair in terms of if I do the repair, do I think I will get at least enough months of additional use at a lower cost than new car payments would be. Once I no longer need to commute I imagine I can try and keep cars even longer. But, I can also see the appeal to some of having a new car all the time and rarely , if ever, having to think about repairs, reliability issues. I drive too many miles to even consider a lease now.

 

[morgan98]

Not a follower of him, but I gather is of similar mind as Suze Orman, Gail Vox Oxley, etc, basic financial common sense.
But in America, we're free not to use financial common sense.

I guess I would say what Dave Ramsey preaches is common sense, but I also think it is very BASIC and a narrow minded view of finances. In my opinion, his advice is better about getting out of debt and being extremely frugal (cheap). As others have pointed out, he is sometimes so anti any kind of debt or loan, that his advice makes no sense once you have more money, investments and options.

 

[tvguy]

$25 a month gym membership sounds great. I imagine you live in a small town by many of your posts. My last gym membership was over $100 a month per person. I also was in a fitness program that was $179 a month.

LOL. If 1.5 million is small, yes. Our friend Google says the average monthly gym membership is $40 to $50 a month. So I am below average, and you are double average. But we do have a gym almost on every corner it seems. So it is a highly competitve area.
We also have more car dealerships per capita than any other city too!
The gym I belong to alone has 20 locations in our area.

 

[kymom99]

Where I live you pay sales tax at time of purchase, but I am unfamiliar with this property tax aspect to owning a car. So your state requires you to list it as an asset each year and you pay an amount each year based on its value? Does the amount you pay decrease each year as the car loses value, and if so, how do you determine its current value each year? Or do you pay that same amount based upon the initial cost ($800 in your example) each year for as long as you own the car? I wonder how widespread this concept is.

In Kentucky it works just like that. You get a card with the value listed and the subsequent taxes based on that amount. Right across the river in Ohio everyone pays the same amount. That's why you see a number of cars in my area with Ohio plates. They find some way to license them over there because it's cheaper.

 

[tvguy]

I guess I would say what Dave Ramsey preaches is common sense, but I also think it is very BASIC and a narrow minded view of finances. In my opinion, his advice is better about getting out of debt and being extremely frugal (cheap). As others have pointed out, he is sometimes so anti any kind of debt or loan, that his advice makes no sense once you have more money, investments and options.

I guess it depends on your upbringing. My wife and I were the first in our families to have a mortgage or a car loan. On my side, my parents just didn't believe in debt. My dad's motto was "if you can't pay cash for a car, you don't need a new car". And to be honest, their first home really was a shack. One bedroom one bath (that cost $2,500) that they kept adding onto over 10 years until it was a 3 bedroom 2 bath house.
On my wife's side, her dad was career Air Force so he had free housing for 27 years until he retired. And he retired to Texas and paid $12,000 for his brand new house. He had just one credit card until 1985, a Sears Card, and got a Discovery card only because it had just been launched by.....Sears. He bought everything from Sears.....well, except food.

 

[Klayfish]

My last car ended up being about 25% off MSRP, less than the two year old used ones also on the lot.

Just FYI, next time you go to buy a car, don't even look at MSRP. It's absolutely meaningless and is exactly what dealers use to get people in and make them think they got a good deal. MSRP is manufacturers suggested retail price, it has nothing to do with actual market value. I could build a widget today and "suggest" that it retail for $1000, but in reality it's only worth $250. That way, the person selling it can say "You just got 75% off MSRP, what a bargain!!". Dealers love to advertise MSRP and try to sell you on how much off you're getting from that. This is especially true with the "American" nameplates. Ignore it.

 

[amcnj]

$25 a month gym membership sounds great. I imagine you live in a small town by many of your posts. My last gym membership was over $100 a month per person. I also was in a fitness program that was $179 a month.

Decades ago some gyms were offering lifetime memberships. Now of course some of them have come and gone, but a friend of mine bought one and was fortunate in that his was a survivor, it may have merged or been bought out multiple times over the years, but is still around under today, and more importantly, still honors his lifetime membership. So he has been going several times a week for decades now. I can't remember the costs anymore, but feel it was hundereds of dolalrs

I guess it depends on your upbringing. My wife and I were the first in our families to have a mortgage or a car loan. On my side, my parents just didn't believe in debt. My dad's motto was "if you can't pay cash for a car, you don't need a new car". And to be honest, their first home really was a shack. One bedroom one bath (that cost $2,500) that they kept adding onto over 10 years until it was a 3 bedroom 2 bath house.
On my wife's side, her dad was career Air Force so he had free housing for 27 years until he retired. And he retired to Texas and paid $12,000 for his brand new house. He had just one credit card until 1985, a Sears Card, and got a Discovery card only because it had just been launched by.....Sears. He bought everything from Sears.....well, except food.

I remember my parents only got a credit card when the car rental agency wouldn't rent a car to them without one. Then they had to remember to charge something I think it was every year or 6 months, as that kept the card active or avoided some fee on it or something.

 

[tvguy]

Just FYI, next time you go to buy a car, don't even look at MSRP. It's absolutely meaningless and is exactly what dealers use to get people in and make them think they got a good deal. MSRP is manufacturers suggested retail price, it has nothing to do with actual market value. I could build a widget today and "suggest" that it retail for $1000, but in reality it's only worth $250. That way, the person selling it can say "You just got 75% off MSRP, what a bargain!!". Dealers love to advertise MSRP and try to sell you on how much off you're getting from that. This is especially true with the "American" nameplates. Ignore it.

And don't negotiate up from the dealer cost. Negotiate up from the wholesale cost. Yes, dealer cost is what they paid up front for the car, however they get percentage back, usually about 3%, when they actually sell the car. So they can sell a car for below dealer cost, and still in the end make money.
And then there are the secret incentives for dealers. A friend worked for a dealer who was building a new building. Their automaker offered them $100,000 towards the new building if they sold 30 cars of a specific model in one month. They met their goal, and on paper, lost money on every one of those 30 cars, until that $100,000 check came in.

 

[amcnj]

Just FYI, next time you go to buy a car, don't even look at MSRP. It's absolutely meaningless and is exactly what dealers use to get people in and make them think they got a good deal. MSRP is manufacturers suggested retail price, it has nothing to do with actual market value. I could build a widget today and "suggest" that it retail for $1000, but in reality it's only worth $250. That way, the person selling it can say "You just got 75% off MSRP, what a bargain!!". Dealers love to advertise MSRP and try to sell you on how much off you're getting from that. This is especially true with the "American" nameplates. Ignore it.

I just used the MSRP as the starting price to show the discount percentage in my example. MSRP used to have more meaning but over time the invoice price and MSRP got closer and closer. I think for this car they only differed by about $1000. So it makes people think there is not as much wiggle room for the dealer on the vehicle. I guess that means invoice price has also lost meaning. The dealer for this purchase is actually one of those "we sell for $X below invoice" types, and I check out the invoice and "market value" via online sources before heading to a dealer, so have an idea what is a fair price for the vehicle in question. Many years ago you used to try and get a car for close to invoice, now it is how far below invoice can I get the car for!