No Debt (Ramsey) or Debt as a Tool

[Master slacker]

I think Dave is pretty good at what he does, but having a car loan and a house mortgage is pretty much a way of life if you were not born privileged.

I totally disagree with the car loan portion of your statement. Cars can be cheap, if you are willing to buy something that isn't new or flashy.

Used American sedans are a bargain. Check out prices on 2012 Impalas. You can get a loaded out LTZ for under 15K, and its got all the bells and whistles, plus 300hp (as well as, a trivia fact, a suspension system that was completely reworked by GM Performance because of the high percentage they expected to go to police fleets)

Of course, not everyone has gotten to the 'cars are tools to go from a to b' place yet.

I came to that realization when I discovered I had no money...

 

[snickerd3]

For me the brand new car is the hands down winner. It guarantees me the previous owner didn't smoke in it, wear cologne/perfume I'm allergic to, have animals in the car, etc... I will also know how the car was treated sicne I would be the first owner.

 

[snickerd3]

I did the used vehicle route for my first car out of school...it was a chevy blazer with all the bells and whistles but I was at the repair shop often with it.

 

[envirotex]

from k1f3--"We both do have credit cards now but use them primarily while traveling for work. Then get the expense check and pay off the balance each month. I also use mine to finance computer builds and repairs for my side business. Again once I get paid for the work, the balance is paid off each month."

I don't even use a credit card for work expenses...If it's gong to be more than $1000, then I generally pay in advance and get reimbursed in advance, or get an advance. I don't really like the idea my employer using my cash or my credit...

 

[engineergurl]

Which is better from the standpoint of money paid? Paying $15K cash for a two year old Impala, or paying $30K for a new one at 0% interest?

Considering, the only new car I've ever technically had in my possession was purchased and waiting in the driveway when I got home from work one day, and I have just now started driving it nearly 4 years later, you are preaching to the choir... I would have loved to have gotten a brand new jeep, but my 2002 grand Cherokee was a quarter of the price, and had met my current needs so that's what I got.

 

[mudpuppy]

from k1f3--"We both do have credit cards now but use them primarily while traveling for work. Then get the expense check and pay off the balance each month. I also use mine to finance computer builds and repairs for my side business. Again once I get paid for the work, the balance is paid off each month."

I don't even use a credit card for work expenses...If it's gong to be more than $1000, then I generally pay in advance and get reimbursed in advance, or get an advance. I don't really like the idea my employer using my cash or my credit...

I love to charge travel for work--gimme those airline miles! Yeah!

 

[csb]

^ yep! Our work is really good (please don't let me jinx this) about getting us paid right away. That means I build up travel points and cash back.

We also have a work issued card that I rarely use. If the bill will be really big then I use it, like for my two weeks of hotel room in Chicago. That's a lot of money hanging out there if work decides to have a hiccup in the reimbursement process.

 

[Capt Worley PE]

Which is better from the standpoint of money paid? Paying $15K cash for a two year old Impala, or paying $30K for a new one at 0% interest?

Considering, the only new car I've ever technically had in my possession was purchased and waiting in the driveway when I got home from work one day, and I have just now started driving it nearly 4 years later, you are preaching to the choir... I would have loved to have gotten a brand new jeep, but my 2002 grand Cherokee was a quarter of the price, and had met my current needs so that's what I got.

I bought two vehicles new, one in 1989, the other in 1998. After the one in 1998, I decided I'd go used because I just honestly can't see paying more than 15K for a car. The fact is, I haven't paid more than 10K for one since then, although I suspect the next one (hopefully at least five years or so down the road--I have an 07 with 65K on it) will probably be pushing the 15K mark because of inflation (and tha fact that I wouldn't buy anything pre-2012 because that's when they started mandating stability control).

 

[engineergurl]

we are actually in a debate right now. Right now, we have two car payments, but both will be paid off shortly. We were looking at the 2013 models and considering getting what we call our 'lifetime' truck... it's a big step towards the retirement we want and it fits in with our plan.

 

[knight1fox3]

For me the brand new car is the hands down winner. It guarantees me the previous owner didn't smoke in it, wear cologne/perfume I'm allergic to, have animals in the car, etc... I will also know how the car was treated sicne I would be the first owner.

I don't have allergies so I can't really relate. But I just can't justify the amount of depreciation when driving a brand new car off the lot. That will never be a deal IMO.

from k1f3--"We both do have credit cards now but use them primarily while traveling for work. Then get the expense check and pay off the balance each month. I also use mine to finance computer builds and repairs for my side business. Again once I get paid for the work, the balance is paid off each month."

I don't even use a credit card for work expenses...If it's gong to be more than $1000, then I generally pay in advance and get reimbursed in advance, or get an advance. I don't really like the idea my employer using my cash or my credit...

I guess that works. Do you have a corporate card? How do you pay for hotels and car rental? You can't charge those in advance especially if you have to unexpectedly stay longer and pay for that when you leave. And same goes for meals, you can't "pre-pay" those either. Airline tickets were always paid for on the corporate account. But now working for a 20 or so person consulting firm, there are no corporate accounts or cards. If you're traveling, you're paying out of pocket and will be reimbursed once you submit the report. That's why I use credit because the money isn't being taken directly from my bank account. That certainly would not fly with me.

^ yep! Our work is really good (please don't let me jinx this) about getting us paid right away. That means I build up travel points and cash back.

We also have a work issued card that I rarely use. If the bill will be really big then I use it, like for my two weeks of hotel room in Chicago. That's a lot of money hanging out there if work decides to have a hiccup in the reimbursement process.

+1

 

[snickerd3]

For me the brand new car is the hands down winner. It guarantees me the previous owner didn't smoke in it, wear cologne/perfume I'm allergic to, have animals in the car, etc... I will also know how the car was treated sicne I would be the first owner.

I don't have allergies so I can't really relate. But I just can't justify the amount of depreciation when driving a brand new car off the lot. That will never be a deal IMO.

I'll just be one of those people that makes the opportunity for those of you to have used cars to choose from. ;-)

 

[Flyer_PE]

If I traded cars more often, I would definitely go the used vehicle route. Picking up a new one gets me pretty much exactly the options/color I want and I tend to run them for well over 10 years. It would be a very different story if I were changing vehicles every 3 to 5 years.

 

[Sapper PE LS]

I look at it like this, if I were buying a car for an investment, absolutely I would not buy it new. But I'm not buying it as an investment, I'm buying it for transportation, knowing that it will depreciate in value and it will wear out in time. When I look at a new vehicle with like 30 miles on it and the cost is let's say $20k, but then you can get the year end close out model and knock off $1k, probably get some other discounts knocking off another $500 or more, and then trade in value of my current car, bringing the price down to hopefully somewhere in the $10k - $15k range, then you get financing at 0%, plus warranties and free oil changes for x number of years, it really doesn't make sense to go find that $16k two year old car with no rebates / discounts, and financing at 6% or higher. Even if you are paying cash, the amount the dealer charges for a certified pre-owned vehicle is not really that much less than the price of the car new after incentives, so to me it makes no sense not to buy new. With a new car, you pretty much know what you are getting and that it most likely will still be running in 10 years.

 

[Flyer_PE]

^That pretty much describes where I landed with my new truck. Once the end-of-model-year incentives were factored in, the differential in price between new and used is pretty small.

 

[Capt Worley PE]

^^Ford is really upping the ante on rebates because the 2015 F-150 is changed significantly, making heavy use of Al in place of steel.

 

[Ship Wreck PE]

^That pretty much describes where I landed with my new truck. Once the end-of-model-year incentives were factored in, the differential in price between new and used is pretty small.

That's what I am saying In with the old truck, and out with the new truck.. Less $200.00 a month payment

 

[Flyer_PE]

^^Ford is really upping the ante on rebates because the 2015 F-150 is changed significantly, making heavy use of Al in place of steel.

I have a buddy that works at Ford. He told me I'd be happier with the 2013-14 truck. He's a little taller than I am but he's been in the 2015 truck and felt like the character "Bones" from the movie Gator.

 

[Capt Worley PE]

^^Ford is really upping the ante on rebates because the 2015 F-150 is changed significantly, making heavy use of Al in place of steel.

I have a buddy that works at Ford. He told me I'd be happier with the 2013-14 truck. He's a little taller than I am but he's been in the 2015 truck and felt like the character "Bones" from the movie Gator.

Why do they call you Bones?

 

[Master slacker]

I look at it like this, if I were buying a car for an investment, absolutely I would not buy it new. But I'm not buying it as an investment, I'm buying it for transportation, knowing that it will depreciate in value and it will wear out in time. When I look at a new vehicle with like 30 miles on it and the cost is let's say $20k, but then you can get the year end close out model and knock off $1k, probably get some other discounts knocking off another $500 or more, and then trade in value of my current car, bringing the price down to hopefully somewhere in the $10k - $15k range, then you get financing at 0%, plus warranties and free oil changes for x number of years, it really doesn't make sense to go find that $16k two year old car with no rebates / discounts, and financing at 6% or higher. Even if you are paying cash, the amount the dealer charges for a certified pre-owned vehicle is not really that much less than the price of the car new after incentives, so to me it makes no sense not to buy new. With a new car, you pretty much know what you are getting and that it most likely will still be running in 10 years.

I drive cars into the grave and then some. Our youngest car is 12 years old. The oldest is 22 years old. I HIGHLY doubt the trade-in value of any of our cars would knock $4000 - $9000. 0% financing from the dealer has caveats associated with them in that there fine print. Usually warranties are extended to used cars - losing 2 years / 18,964 miles off the warranty won't phase me. And oil changes? Nobody puts generic oil-from-the-black-drum into any of our cars.

2014 Kia Sorento LX - $26,550 at 0.89%

2012 Kia Sorento LX - $18,691 at 1.39% with 22k miles

Both using USAA car service tool. For our position, the $8k savings is a much better choice.

 

[Dexman PE PMP]

^^^ That's a full $125/month difference on a 60 month purchase.

And then there are guys like me who put several thousand dollars into aftermarket upgrades to cars that already don't need them...