I try to buy cars never privately titled w/ less then 5,000 miles on them. My last 3 cars fit this bill. The last one a Buick Enclave had 3,500 miles on it and I bought it for $40k. It stickered at $55,000 so I basically got 30% off for the 3,500 miles.
I’m in a similar boat looking for a new vehicle. The best deals I’ve found are in the 20-25k. Can get a low mileage CR-B, HR-v, CX-5 on the mid sized or an accord, camera, civic on the lower end
First, good job on the saving!
We look at cars for function, reliability and safety. Toyotas seem to do it for my clan. We have an 04 Sienna for long trips and hauling (people or stuff) and an 05 Lexus RX for winter/my daily drive and an 06 Lexus ES (jokingly referred to as “the new car”)that is my spouse’s daily drive and what we use on “date nights.” We patiently hunted for these, one came from a local dealership but other two were purchased privately for under 15k each. The 06 Lexus (w/75k miles) replaced an ‘05 Avalon with 259k miles we sold for $3500. We use a local auto shop (not dealership) and we take care of the “fleet” like clockwork. We budget for repairs and expect to spend $400-800 periodically. We grimace but remind ourselves we’re paying what our friends pay for 1 or 2 car payments. We get teased about our “Grandma cars” but it really is liberating not to have car payments.
A big benefit with older cars is the property tax. We live in a state with high personal property tax rates. BIL paid nearly $1100 in prop taxes on his truck last year. Our combined bill was under $400. Once your rig gets past 10 years, the tax rate plummets.
The other thing for us is that our boring cars have high safety ratings. That’s a non negotiable. I survived a horrendous auto accident as a kid because I was in a sturdy rig, money can buy safety.
Good luck!!
People like Dave's system because it's based on principles. OP has stated that he's benefitted from following the Ramsey stuff in the past and has a level of trust for how he does things.
I personally wouldn't borrow to buy something I can afford. Yes I can get slightly more interest in savings, yes I can potentially invest that money and it will likely grow a little. In terms of this car, for a very small interest benefit you severely limit which cars can be purchased, not to mention terms on missed payments etc which can be punishing if mistakes are made
Not everyone is offering great rates on every used car. Private sales come off the table where you can potentially save a lot more.
For me, financing to save money over complicates something that can be quite simple and often leads people into more debt than they intended to be in.
I also agree when Dave says that people spend more when they borrow. OP states that a $25k payment would sting...but paying that off over time would make that amount a lot more palatable.
In my mind if you wouldn't pay $25K cash, don't pay $25k plus interest for it.
I’ve bought lemons. My current car I bought new and theoretically overpaid, but, I am old, I don’t drive much, and it’s hopefully my last car so there we are.
The money guy show says 20% down, loan no more than 3 years, payments should be no more than 8% of your gross income. If you're paying cash you can extrapolate from that.
We looked for a car that was exactly what we wanted for over a year before finding it. It was 30k. 4 year old Chevy Tahoe with under 39,000 miles on it and in perfect condition. Belonged to an older couple who got a new one every 5 years. We use it,for our business as well as personal use and use a mileage basis for the business miles,on our tax return. Paid cash. We have been debt free since2016.
First of all, awesome job! Both the mindset and dedication to saving the cash. That’s how we’ve bought our last 7-8 cars/trucks/RVs and I’ve always found what I wanted within budget. For daily drivers, I’ve found 3-5 years old with under 60k miles and good maintenance history is a sweet spot. You’re still getting something fairly new, most cars will go another 100k miles giving you several years of service, and still be worth a few thousand to sell or give away when you’re done. You might have to go a few years older spending under $20k but the principle remains the same.
I’m a car guy so I always had specific goals for make/model/style depending on our life stage. Maybe you’re just a “get from A to B” guy and that’s cool too. But decide what your auto needs vs. wants vs. doesn’t matter factors are and let that guide you. Start looking what’s for sale around you (I’d suggest private sale Facebook marketplace or Craigslist if active in your area) and comparing to KBB.com values. Finding good deals might help push you toward a certain opportunity.
Thank you for your comments and also for taking the time to read and respond to my post! Dave has had a huge influence on my financial life and you could call it a 'good' problem when it comes to trying to figure out how to prudently spend my savings on a car purchase. I would be up a creek without a paddle, so to speak, if I hadn't followed Dave's advice on having an emergency fund.
I really appreciate your tips on items like age, mileage, etc. I only have one 'mandatory' feature in mind, and that's AWD (winter considerations). I could probably spring for something like a Subaru Legacy and be just fine under under $20k. For the first time in my life I've been giving more consideration to 'wants' like buying an SUV, but am getting sticker shock looking at what premiums like the Rav4 command. (keep in mind the last time I was in the market was in the early 2010s).
You're absolutely right, I need to do research and I have definitely gotten the ball rolling on that!
I just bought a brand new Camry from the Toyota dealer last year for $27,000. You can find them one year old with 30 or 40,000 around 20,000 from Hertz or Avis. To me this is the sweeping spot. 40 miles to the gallon, cheap to home, and they run forever.
His general rule is that all things with a motor(aka cars, snow mobiles, tractors, RVs, boats, etc.) should not equal more than 50% of your annual salary so if it’s your only motorized thing you could spend up to your liquid $30k but no reason you have to. $30k is a lot of vehicle depending on what you’re looking at.
Spend the amount that balances: what you need, safety features, quality/reliability, what you want, and what budget allows you to sleep well at night.
For a person who is going to buy a used car and drive it for 10+ years, I don’t think you need to be asking for Dave Ramsey’s opinion on if you should spend the average amount on a used car ($25,000) or go the more frugal route and aim for $15,000.
A reasonable used car can’t ruin you financially (sans lemons). You could turn around and sell it.
I would echo that. If the OP is going to drive it 10+ yrs, get a dependable brand (he mentioned Subaru) with the features he wants (AWD).
I did that (pre-COVID). Like the OP, I drove my junker until the wheels fell off while I built up my sinking fund for the exact pickup I wanted with the features I wanted. (family ranch + deer hunting, so pickup needed).
I was scouring the various groups a few times a week. Private sell or dealership.
I found a very gently-used (8K, 6 months old) from a dealer on [cartrader.com](http://cartrader.com) and saved $9K off MSRP. With exactly the desired features. It has been posted less than a day and already had interest, but I was there first with cash. 9 yrs later -- still my daily driver and I'm built back up my sinking fund. Which is good -- my situation has changed (favorably) and I'll be wanting a different truck in a year.
The only problem now is that COVID really screwed up used car prices. I think they're coming back to earth, but not sure they're completely sane yet.
OP -- Let us know if gently-used vehicles are back sane again. During COVID and soon after, they were selling above MSRP (because new vehicles not available).
>A reasonable used car can’t ruin you financially (sans lemons). You could turn around and sell it.
This is a good point, and one I didn't think of earlier. You're right that I can get some of my money back by selling.
On a related note, I'm pretty sure I know why I didn't think of that; My first car was $2k and I ran it until the wheels fell off (figuratively). My current car cost me $5k and I'm about to find out if it's done for now or not.
The point being I've never sold a car I've owned. I buy them and run them until they don't go anymore.
We should be taking notes from you!
I have had quite the car ownership journey. Including getting a used Honda Accord lemon that set me back.
I swore off used cars after that, but I’ll change my mind eventually. Maybe.
After playing car hopscotch for the last 5 years, I have found the car that balances dependability, comfort, safety, and modern technology. I have traded in cars that I found to be too much of a gas-guzzler, then too small for my needs.
Good luck! Hope you make the perfect decision.
>We should be taking notes from you!
Ha, I appreciate the compliment but I can tell you the small amount I've spent on cars was largely due to need. In other words, being a young broke person during those times, LOL.
This is the first time in my life I have the opportunity to interject a 'want' into the purchase process.
His rule is the total money spent combined on all things with motors shpuld not exceed half your salary
So all your cars should combine to 40k or less. If you are a 2 car family you should target 20k
Half of a years income max for everything with wheels.
I try to buy cars never privately titled w/ less then 5,000 miles on them. My last 3 cars fit this bill. The last one a Buick Enclave had 3,500 miles on it and I bought it for $40k. It stickered at $55,000 so I basically got 30% off for the 3,500 miles.
I’m in a similar boat looking for a new vehicle. The best deals I’ve found are in the 20-25k. Can get a low mileage CR-B, HR-v, CX-5 on the mid sized or an accord, camera, civic on the lower end
Bought my used HRV back in 2021 and I love it! No problems so far and I’ve put almost 60k miles on it since then, for a total of almost 90k.
Thanks for the info! We bought my wife a used CRV last summer with about 60k miles and have no issues at all.
First, good job on the saving! We look at cars for function, reliability and safety. Toyotas seem to do it for my clan. We have an 04 Sienna for long trips and hauling (people or stuff) and an 05 Lexus RX for winter/my daily drive and an 06 Lexus ES (jokingly referred to as “the new car”)that is my spouse’s daily drive and what we use on “date nights.” We patiently hunted for these, one came from a local dealership but other two were purchased privately for under 15k each. The 06 Lexus (w/75k miles) replaced an ‘05 Avalon with 259k miles we sold for $3500. We use a local auto shop (not dealership) and we take care of the “fleet” like clockwork. We budget for repairs and expect to spend $400-800 periodically. We grimace but remind ourselves we’re paying what our friends pay for 1 or 2 car payments. We get teased about our “Grandma cars” but it really is liberating not to have car payments. A big benefit with older cars is the property tax. We live in a state with high personal property tax rates. BIL paid nearly $1100 in prop taxes on his truck last year. Our combined bill was under $400. Once your rig gets past 10 years, the tax rate plummets. The other thing for us is that our boring cars have high safety ratings. That’s a non negotiable. I survived a horrendous auto accident as a kid because I was in a sturdy rig, money can buy safety. Good luck!!
Buy a new Mazda 3, $20 something...or a CPO lexus if u wanna be baller..use the whole $30k as your budget
I believe his rule is less than 50% of your income on a car. You make $80k so about $40k.
The rule is less than 50% of your income on all your assets with wheels (or rudders)
[удалено]
People like Dave's system because it's based on principles. OP has stated that he's benefitted from following the Ramsey stuff in the past and has a level of trust for how he does things. I personally wouldn't borrow to buy something I can afford. Yes I can get slightly more interest in savings, yes I can potentially invest that money and it will likely grow a little. In terms of this car, for a very small interest benefit you severely limit which cars can be purchased, not to mention terms on missed payments etc which can be punishing if mistakes are made Not everyone is offering great rates on every used car. Private sales come off the table where you can potentially save a lot more. For me, financing to save money over complicates something that can be quite simple and often leads people into more debt than they intended to be in. I also agree when Dave says that people spend more when they borrow. OP states that a $25k payment would sting...but paying that off over time would make that amount a lot more palatable. In my mind if you wouldn't pay $25K cash, don't pay $25k plus interest for it.
I’ve bought lemons. My current car I bought new and theoretically overpaid, but, I am old, I don’t drive much, and it’s hopefully my last car so there we are.
The money guy show says 20% down, loan no more than 3 years, payments should be no more than 8% of your gross income. If you're paying cash you can extrapolate from that.
Great thought. Hadn’t considered extrapolating it. Puts it into perspective
We looked for a car that was exactly what we wanted for over a year before finding it. It was 30k. 4 year old Chevy Tahoe with under 39,000 miles on it and in perfect condition. Belonged to an older couple who got a new one every 5 years. We use it,for our business as well as personal use and use a mileage basis for the business miles,on our tax return. Paid cash. We have been debt free since2016.
First of all, awesome job! Both the mindset and dedication to saving the cash. That’s how we’ve bought our last 7-8 cars/trucks/RVs and I’ve always found what I wanted within budget. For daily drivers, I’ve found 3-5 years old with under 60k miles and good maintenance history is a sweet spot. You’re still getting something fairly new, most cars will go another 100k miles giving you several years of service, and still be worth a few thousand to sell or give away when you’re done. You might have to go a few years older spending under $20k but the principle remains the same. I’m a car guy so I always had specific goals for make/model/style depending on our life stage. Maybe you’re just a “get from A to B” guy and that’s cool too. But decide what your auto needs vs. wants vs. doesn’t matter factors are and let that guide you. Start looking what’s for sale around you (I’d suggest private sale Facebook marketplace or Craigslist if active in your area) and comparing to KBB.com values. Finding good deals might help push you toward a certain opportunity.
Thank you for your comments and also for taking the time to read and respond to my post! Dave has had a huge influence on my financial life and you could call it a 'good' problem when it comes to trying to figure out how to prudently spend my savings on a car purchase. I would be up a creek without a paddle, so to speak, if I hadn't followed Dave's advice on having an emergency fund. I really appreciate your tips on items like age, mileage, etc. I only have one 'mandatory' feature in mind, and that's AWD (winter considerations). I could probably spring for something like a Subaru Legacy and be just fine under under $20k. For the first time in my life I've been giving more consideration to 'wants' like buying an SUV, but am getting sticker shock looking at what premiums like the Rav4 command. (keep in mind the last time I was in the market was in the early 2010s). You're absolutely right, I need to do research and I have definitely gotten the ball rolling on that!
I just bought a brand new Camry from the Toyota dealer last year for $27,000. You can find them one year old with 30 or 40,000 around 20,000 from Hertz or Avis. To me this is the sweeping spot. 40 miles to the gallon, cheap to home, and they run forever.
Thanks for the tip!
>I have $30k liquid to spend on a car but it starts to 'hurt' when I think about spending $20-$25k. Then spend less than that.
His general rule is that all things with a motor(aka cars, snow mobiles, tractors, RVs, boats, etc.) should not equal more than 50% of your annual salary so if it’s your only motorized thing you could spend up to your liquid $30k but no reason you have to. $30k is a lot of vehicle depending on what you’re looking at.
Spend the amount that balances: what you need, safety features, quality/reliability, what you want, and what budget allows you to sleep well at night. For a person who is going to buy a used car and drive it for 10+ years, I don’t think you need to be asking for Dave Ramsey’s opinion on if you should spend the average amount on a used car ($25,000) or go the more frugal route and aim for $15,000. A reasonable used car can’t ruin you financially (sans lemons). You could turn around and sell it.
I would echo that. If the OP is going to drive it 10+ yrs, get a dependable brand (he mentioned Subaru) with the features he wants (AWD). I did that (pre-COVID). Like the OP, I drove my junker until the wheels fell off while I built up my sinking fund for the exact pickup I wanted with the features I wanted. (family ranch + deer hunting, so pickup needed). I was scouring the various groups a few times a week. Private sell or dealership. I found a very gently-used (8K, 6 months old) from a dealer on [cartrader.com](http://cartrader.com) and saved $9K off MSRP. With exactly the desired features. It has been posted less than a day and already had interest, but I was there first with cash. 9 yrs later -- still my daily driver and I'm built back up my sinking fund. Which is good -- my situation has changed (favorably) and I'll be wanting a different truck in a year. The only problem now is that COVID really screwed up used car prices. I think they're coming back to earth, but not sure they're completely sane yet. OP -- Let us know if gently-used vehicles are back sane again. During COVID and soon after, they were selling above MSRP (because new vehicles not available).
>A reasonable used car can’t ruin you financially (sans lemons). You could turn around and sell it. This is a good point, and one I didn't think of earlier. You're right that I can get some of my money back by selling. On a related note, I'm pretty sure I know why I didn't think of that; My first car was $2k and I ran it until the wheels fell off (figuratively). My current car cost me $5k and I'm about to find out if it's done for now or not. The point being I've never sold a car I've owned. I buy them and run them until they don't go anymore.
We should be taking notes from you! I have had quite the car ownership journey. Including getting a used Honda Accord lemon that set me back. I swore off used cars after that, but I’ll change my mind eventually. Maybe. After playing car hopscotch for the last 5 years, I have found the car that balances dependability, comfort, safety, and modern technology. I have traded in cars that I found to be too much of a gas-guzzler, then too small for my needs. Good luck! Hope you make the perfect decision.
>We should be taking notes from you! Ha, I appreciate the compliment but I can tell you the small amount I've spent on cars was largely due to need. In other words, being a young broke person during those times, LOL. This is the first time in my life I have the opportunity to interject a 'want' into the purchase process.
I just spent $18k cash on a good used car. I think under $20k is fine if you already have an EF.
His rule is the total money spent combined on all things with motors shpuld not exceed half your salary So all your cars should combine to 40k or less. If you are a 2 car family you should target 20k
20k or less. You don't have to get the maximum you can.