Visi Money
TLDR:
- Dave Ramsey advises buying a car with a ‘spirit of saving’ to reduce costs.
- He recommends extending the life of your current car and saving for a replacement rather than taking out a loan for a new one.
Bestselling personal finance author and radio host Dave Ramsey emphasizes the importance of managing transportation expenses amidst rising costs. In a newsletter, Ramsey suggests that owning a car is becoming increasingly expensive due to various additional costs beyond the vehicle’s price, such as mechanical work, parking, and tolls. He recommends avoiding new cars, which quickly depreciate, and instead buying a good used car while saving for a replacement using the money market account. Ramsey believes in the ‘spirit of saving’ and encourages individuals to drive their current car longer to help the car-replacement fund grow.
Ramsey challenges the common belief that car payments are an inevitable part of life, emphasizing the benefits of living without a car payment. He suggests additional methods for saving money on transportation, such as carpooling, using public transportation, and reassessing car insurance policies to potentially reduce costs. Furthermore, Ramsey advises individuals to evaluate if they have more vehicles than they truly need and sell off any extras to improve their financial situation.
Overall, Ramsey’s approach to buying a car involves being financially conscious, saving for a replacement instead of taking out loans, and finding ways to reduce transportation costs to improve one’s overall financial health.
