Why Is No One Talking About America’s Wealth Killer?

The car you drive can absolutely destroy your chance at building true wealth. But it doesn’t have to be this way - I’ll show you what to do instead.
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Ramit Sethi is the host of Netflix’s “How To Get Rich” and New York Times bestselling author of “I Will Teach You To Be Rich”
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[@sw6118]

The most important skill you will ever have is walking out of a dealership. I’ve had dealers refuse to negotiate. I walked. Salesmen who won’t give the total cost of the car. I walked. I once had a dealership add on an extra year to the proposed terms of a loan just because they thought I was that stupid. I walked. You do not have to go through with the purchase unless it’s what you agree to. Don’t be pushed, pulled, bullied, enticed. You can walk. Just walk. WALK.

[@tarablue4472]

That skill will carry over into other areas of life also. I walked out of a gym that insisted I get a membership. This gym absolutely refused to let me pay as I go. They would just lower the membership fee. She even called in the manager as if I was a recalcitrant child, manager came and talked down to me as if I was misbehaving for not going along with this plan. They lowered the fee again and again but never agreed to just let me pay as I go. So I walked out and they never made a penny from me. Years later I was reading complaints about this gym and how many people were getting ripped off by them. Glad I learned how to walk out of a bad deal.

[@daveassanowicz186]

Or just walking, then you don't need a car

[@cowboydelnorte3078]

“Just Walk.” I love it

[@tyjordan1821]

Pops told me that…. Never be afraid to walk

[@YoungCheeno]

One more step and I'm walkin'!

[@EmpressoftheLibrary]

I haven't had a car loan in nearly 20 years. When I finished paying off my last car loan, I started taking what had been my monthly payment and putting it in the bank. I drove that car until the wheels fell off, so to say. By the time that car was no longer functional, I had enough money saved up to pay for a new car in cash. I haven't had a car loan since.

[@zo_471]

I did that too but I put mine in the stock market. Now it’s grown to six figures and I don’t want to touch it to buy a car

[@getinthespace7715]

Yep. I calculated out the cost of buying my used truck with a 7.5% interest loan over 5 years... ($721/month) Instead, I did exactly what you did. Put $500/month away in a money market for 5 years. With today's interest rates, you end up at $36k saved. The loan costs 44.2% more. 1. Always pay cash. 2. Never buy new, unless you are literally getting the vehicle at an insane deal for less than the cost of a used one. My truck deprecated 40%, $24k in the first 2 years of ownership from new. I picked it up as a lease return with huge savings. It's insane to think you save 84% of the cost of a vehicle by buying used a few years old, and paying cash.

[@jonathansaindon788]

This is the way

[@AdmanToronto]

@@zo_471 Well done. Never use a savings account to save.

[@stuffbenlikes]

Over that period of time wouldn't putting it in an index fund have made a lot more money, rather than just letting it sit there earning minimum interest?

[@matthewshannon9]

I make $200k and drive a $15k used nice car. I don't have to worry about finances at all. I work at a prestigious law firm. I still drive a Cadillac and everyone is blown away I don't even pay more than a couple hundred for 2 cars! My mortgage is $2000. People who make 5x my salary are so stressed about finances... You can get a nice car that is reliable for less than $20k. My Cadillac has very high reliability ratings according to all the reputable car sites. The freedom I have to eat out whenever I want and not even think about a $200 date night with my wife is marvelous.

[@Hidden2u]

Very similar story - I make $275k base plus 20-25% bonus, drive a 2011 Honda and a mortgage/taxes/maintenance under $1,800.

[@V8Brah]

All it means is you don't enjoy driving and cool cars

[@Hidden2u]

@@V8BrahThat’s one thing it tells you, but def not all it tells you. 🙃

[@KNRS927]

@@Hidden2u All it means is you have other priorities in your rich life that you choose to spend lavishly on. And then you cut back on things you don't care for like the transportation device.

[@Hidden2u]

@@KNRS927 Again, that’s one (or another) thing it tells you, but it’s def not “all” it tells you!

[@peterjurgens4466]

I did the same thing up until 40 years old. I had $2,000 cash to my name and a mortgage payment. Now at 60 I have a million liquid, a duplex paid for and generating $50,000 annual. No credit card debt or car payment. I drive a 18 year old Silverado. My house is almost paid for that is worth $600,000 and to mention the duplex worth $700,000. I listened to Dave Ramsey and was were very focused the past 20 years. Stop trying to impress people you don't know or like.

[@m.b5777]

Can I know how much was your yearly income over the years

[@Jeez001]

To be honest you have the money to afford a good car. Where it is goes bad is folks who don't have the $$ buying 100k vehicle..

[@MrTwade2006]

I so agree with you. Dave Ramsey did it for me too. Totally debt free. God is good to us first and foremost. I could never have gotten to a point of no debt if it were not for Him

[@chrishadiana]

It is very hard to see project which can be used in real life like AMS120X 🥳🥳🥳

[@Wallymakesstuff]

As a former car rental GM, we closely monitored the TCO of every vehicle. BY FAR, the most affordable cars to own were Toyotas. This factors in long term depreciation (purchase price minus sale price divided by length of ownership )fuel mileage, maintenance and repair. Camry and Corolla were about half the cost of similar sized gm/ford/dodge, about 20-30% less than other Japanese makes of the same class, and about 3x cheaper than European cars of the same class.

[@LatoyaWatson]

I drove my Corolla for 17 years. I finally replaced it with a Camry. I hope to keep it on the road for just as long.. if not more.

[@NicoleLLewis]

Been driving my (base model) RAV4 for 7 years. Other than basic maintenance, no issues. My plan is to keep her for a minimum of 15 years.

[@BrayanCCG]

I'm 21, my first car is a Toyota Matrix from 2003 and I love it, it's not a fancy car by any chance but I've had just small fixes on it and it's super efficient, probably gonna stay with toyota for the rest of my life lol

[@JessicaChungMN]

Oh wow!! 20% less to own than even a Honda?!

[@tigerlounge]

Yup - until recently both me and my husband drove 20+ year old toyotas. only upgraded one when my Dad stopped driving and we bought his newer vehicle.

[@getinthespace7715]

I saved 84% when I bought my truck by doing 2 things... 1. Buy used, 2-4 years old after the vehicle has deprecated 40%. Still under warranty, 30k miles or less. Find a good deal on a lease return. 2. Save up your money upfront and pay cash. It takes 5 years to save $36k at $500/month. A 5 year loan at 7.5% interest for the same amount costs $721 a month. Paying cash saves 44%. Drive a vehicle for at least 10 years to get your value out of it. Avoid luxury brands with high repair costs and poor reliability. Some luxury brands are great deals used... Acura, Lexus. They are essentially upscale Honda and Toyota with great quality that can be purchased used for similar prices to used. The luxury brands just deprecate faster because they are bought/leased as status symbols and offloaded after a few years for another new vehicle.

[@MNP208]

Yep, we've always kept our vehicles for ten years... then we sell them to our kids.

[@carmenhealer4635]

44% off 60% is 26.4%. You saved 66.4% off the total price of a new truck. But you saved 100% 5 years later by not buying another new vehicle. Good job.

[@camdenmounts1473]

$500/mo x 5 years = $30k. $721 for 6 yrs is still correct, but recalculating down to 5 years brings the monthly payment to $601. Paying cash saves 20%. The principle is still there.

[@johnyang1420]

Smart

[@katiegarces]

100% perfect, that’s exactly what we do

[@HappyGrenades37]

I sell cars, and you are so accurate. As another insider tip for those who catch this comment, don't burn bridges. Don't tell any other dealer you're going with a specific offer until it's over. This gives you the power to walk. 9/10 times if I pick up the phone and a person says "I'm at your competitor, they gave me this offer over but changed the terms on me when I got in," I'll beat their original offer. Any negotiation you go into you are so so so much more powerful if you can genuinely walk from the table.

[@Brick1978]

Guess who wrote "When in negotiation; always be in a position to walk away from the table " ?......Donald Trump, in his book, "The Art of the Deal".

[@jonm.678]

The reason I like Ramit is because I live his philosophy. I mercilessly cut costs elsewhere (meal prep, no drinking/smoking, cheap hobbies etc) so that I can spend extravagantly on my car. I spent about $30k for a BMW 340i and I’ve had it for two years now- I love it. Yes it is fully paid off. It can work, you just have to be mindful of your budget!

[@tomaszp2027]

Hell yea, more power to you. I feel that this is how the CSP is supposed to be used (and I'm not a car guy)

[@rocioiribe5841]

yep this is exactly how it's supposed to be, being FULLY aware of what you're spending you're money on and budgeting accordingly.

[@toonnaobi-okoye2949]

Damn, that sounds like a steal for a BMW post-covid

[@randombandit362]

Did you buy used? Did you pay for it with cash? I think paying 30k all at once would be too much, it’s almost better to put half of that down, then get a short little loan for the rest. Then take the remaining 15k and invest it.

[@jonm.678]

@@randombandit362 it was used. 2016 that I bought in 2022. I traded in my WRX for about 22k and financed the rest with a low interest rate. The payment was like $150 a month. I paid the minimum until I had the lump sum and just knocked it out in less than a year. Easy peasy.

[@sherryr1222]

I had to replace my old car (totalled). Found a used one I liked, an upgrade year and model of my old one. Hubby thought it was a great price and wanted me to hurry and buy before someone else does. I waited until the price dropped and I offered 10% less. Dealership said no. Waited a few days and emailed the other shift manager…said I noticed it was still unsold, would you accept $$, plus waive all fees. He said yes….I drove away for thousands less. Negotiate and remember, there will be other cars, don’t get vested in one specific car. Get yourself an awesome deal instead.

[@elliottnixon-wq6sp]

Dear Ramit’s video editor: please compile all clips of Ramit’s epic meme faces and put into a clips compilation. It will generate the subscriber equivalent of compound interest.

[@mr_don_rowe]

I'll buy an Apple Vision Pro if someone can make a "disappointed Ramit" face pop up in my field of view whenever I'm about to make a dumb money decision.

[@jason00121]

I have needed to replace my truck for 5-6 years, but at today’s prices, even if I had $150k in cash, there is no way I would buy one. I run a welding shop. I need a truck for work. I simply will not pay 70-120k for a truck that realistic should be 20-50… it is insane and I am floored that there are people willing to pay it…

[@Erick-di9gm]

It's all relative. A homeless guy can't believe you buy food at a grocery store!

[@danwelterweight4137]

This is exactly the reason why dealers almost have a heart attack and their faces go sour when they hear you want to pay the full price upfront and don't want to auto finance your car. 😂 Don't tell them upfront, leave that to the very end after they tell you the price of the vehicle and be willing to walk away if they try to change the price of the car after you tell them you are paying the full price upfront.

[@RabianskiT]

Their „faces go sour” because they can see all the INTEREST they will be deprived of 😂

[@michaelmedina233]

In the end, someone spends so much money on a car for it to be parked for 40 hours a week while you are inside working.

[@Madchris8828]

Lol yep

[@Madchris8828]

Lol yep

[@ttmc573]

Oh my God yesssss 😆

[@barose1]

So many people i know have insanely long commutes, it's the 2-4 hours a day they *need* that car. Without a reliable car, there is no job. Life is a scam. 😂

[@Madchris8828]

@barose1 I don't know how someone can commute for 2 to four hours. I'd go insane 😂

[@DiFinni]

A friend of mine was leasing a car for $750 a month a few years back. He was happy that every 3 years he'd trade in and get a newer car with all the fancy stuff the car had. I'm old school, I buy and hold a car for over 10 years. Anyhow I was shocked and told him if he'd save/invest that 9,000 a year for like 10 years that would be over $90k with interest. Life changer. He finally bought one of the cars he was leasing. Now he lives in a hotel at 60 years old, didn't invest much all those years. He will most likely have to work until he can't anymore, sad.

[@sn4rl277]

Leasing a vehicle is the worst, it's called a Car Fleece for a reason.

[@pauls9011]

​@@sn4rl277for some people leasing is not good. Agreed. I lease and the reason I lease instead of buying is by the time I turn the vehicle in I have not paid for the major repairs like brakes, belts, etc. My wife and I budget our miles so for me is good

[@ehderguyyashootadeerorno2313]

A few years ago I took my son and friend's kid fishing. I was driving my 4 year old truck and saw a brand new Trail Boss. I said that's a nice truck I would love to have one. The 8 year old said why don't you buy one, can you afford it? I said I can keep my current truck and pay cash for that Trail Boss. He said then go buy it. I said you can't save money if you buy everything that is shiny.

[@lowlowseesee]

he won't forget that, great work yo

[@ehderguyyashootadeerorno2313]

@@lowlowseesee I hope not. He was adopted by two women (lesbian). One is terrible with finances and the other is okay at best. Hopefully the cycle doesn’t continue.

[@GlamGoddes101]

@@ehderguyyashootadeerorno2313 I chuckled because u put lesbian in parentheses like someone couldn’t figure that out 😂

[@bennie7781]

Hey Ramit! I want you to know that your videos are making impact. I binge watched your videos the first day i came across you on KZbin and my life changed. I was almost $30k in debt. In less than 5 months, I've cut it to less than 20k. On tract to completely be debt free by 2025, God willing. Thank you for sharing your knowledge.

[@eileenwatt8283]

They stole 2 cars out of my complex parking lot. My car was left with windows down by mistake and nothing was stolen. it's a 2008 . I love it. It makes me feel safe from thieves. I get flyers on it all the time " We buy junk cars". I save them. lol

[@chapman1569]

We have 2 plug in car, they are not hip enough to steal, lol, I love it.

[@jeffcarhart2555]

Yup, same thing in my neighborhood. My 2005 was unlocked and they left spare change in it for me!

[@smileychess]

I drive an early Nissan Leaf. It’s one of the ugliest cars on the market. It accelerates faster than most cars, and is pretty nice to drive. But no one would ever bother to steal it.

[@traveljunkie3946]

​@@jeffcarhart2555😂

[@patrickprendergast9589]

how about framing the offer

[@ChristianAlexandra-kj3hn]

Thanks for sharing PEPE and AMS120X. 💯

[@aliali-ce3yf]

Every KZbinr has been talking about this lately. Answer is simple , just buy a used Toyota - corolla, camry, tundra/tacoma, or sienna - depending on your needs. Low cost of maintenance. They all can last up to 300k and sometimes beyond. They're comfortable and just work.

[@xsaviour755]

My first 3 cars $500,$1000,$3000 . That last car I was earning $50k in year 2005. Ended up buying my first house before buying a brand new car.

[@IrisP989]

We decided not pay for our only car in full. We put 50% down, got a 2.49% interest rate for 72 months ($520 a month), invested the money that we didn't use, took that money plus other money a year later and used that as a down payment for a second house. Our car payment didn't hold us back. It also didn't stop us from reaching a 7 figure net worth last year. We don't care about depreciation since we are not planning on selling the car.

[@tylercampbell6058]

I also think that a lot of times you’re better off paying a bit too much for the right car than getting a great deal on the wrong car. About 12 years ago my wife (then girlfriend) paid a bit too much for a used Honda Civic and on the same week my brother got a “great deal” on a Chevy Malibu. The Civic recently got passed down to my daughter and is still working hard for the family.

[@debthomas8799]

I'm in my 50s, have owned 4 vehicles since my first one at 16, and have never had a car payment. Every month put a couple hundred in a high interest savings account. When the car dies after 10-15 years, use the saved money to buy another car and continue making payments to yourself to save for the next one.

[@SmithTacActual]

What interest accounts do you use? I just opened up a Roth through USAA

[@maxwellspeedwell2585]

I paid $600 for my 1986 Camry with 177,000 miles. It’s a nice clean car and does everything I need. I have no one to impress. I have no shame. Since I spent years in almost all phases if construction, and real estate investing, I learned how to have a nice home with tile, and antique variegated white oak floors, floating coffered ceilings, and beautiful cabinetry. It’s less than than $100/month. I enjoy life and don’t blow my money on stupid stuff to impress people I don’t know.

[@Vin-pd7mh]

99% of the time that big ass truck is used to carry 4 grocery bags in the passenger seat 😈😈

[@keithspernak6456]

Probably more like 100%

[@bigjude100]

Plus $ 70 a week for gas😂

[@calebmelton5989]

And that's ok.

[@truckercowboyed2638]

The great thing about America is people are allowed to buy what they want without your approval,

[@ThriftyCHNR]

@@truckercowboyed2638most countries are like that anyways

[@tessa9335]

I proudly own a 2012 Chevy Malibu. 122k miles. Get’s me from A to B. Yes I do have repairs on it each year but I also enjoy having $672 dollars put into my Roth 403b each month even more!!

[@cherylvargas8861]

I bought my 09 Honda Civic Hybrid back in March 2014, $13,000 payments $358. Fast forward - we're at 406,000 miles and only had the catalytic converter work. With lots of thanks and prayers I have money investing so when The Good Lord leads me to that car I'll be set!! 😊

[@tigerlounge]

posted above - I have a 2004 Scion xb that just (knock on wood) won't die. Gotta love simple, fuel efficient vehicles.

[@sw6118]

I’m at 170,000 in my 2009 Toyota Rav4. I love, love, love this car. It’s needed a new starter…that’s it. It’s SO reliable. I’m SO happy with it.

[@syfyfan969]

I bought my "first" car (with my own money and no parental help)- a 2016 Toyota Prius w/ 30K miles - in 2019 for ~$24,000 when I got my first job out of graduate school but I was dumb and did a 5 yr loan at 7%. Thankfully that loan is up, my Prius is at only 75K miles and kicks butt in the gas department. I'm driving it until I can't drive it anymore.

[@karastiff3796]

My dad buys a new car, drives it for 7 years, then gets a new one. He keeps a savings account to cover the difference between new price and the sale of the old car, but it's still the 3rd most expensive way to drive, after an auto loan or lease. I bought a 12yo Toyota and drove it for 13 years. He was talking up his new car, and I said sure, but mine is super cheap to insure, as good as his on gas, $50/year to register, on average $400 of work a year. The look on his face. His muttering in wonder: "it's practically free..." I knew my husband was The One when I saw he drove a base model Yaris. He did buy it new, and we paid the loan for years. But he drove it for 17 years, giving us time to sock away enough money to buy our next two vehicles outright, even though we needed to replace earlier than hoped, even at an inconvenient time.

[@vicwiseman6038]

I am turning 33 this year. I drive a 2021 Prius L Eco which I purchased brand new in 2021. I negotiated the rate from 4.9% to just under 3% for 60 month. The car gets 51mpg compared to the 28mpg that my 2013 Corolla got. I drive over 30k miles per year and save over $6500 in gas (compared to my Corolla). The car is practically paying for itself as I do my own maintenance and change the oil/filter every 10k miles. It’s the best vehicle purchase that I have ever made. The 2nd best was the 2013 Corolla which I purchased new for $15k (end of December) and sold for $7200 with 190k miles. I don’t try and impress anyone and couldn’t care less about what other people think of me.

[@chapman1569]

I spoke to Prius owners that had their original hybrid battery changed when it became less efficient, they were very satisfied. We own PHEV's, the gaz mileage is great however I expect a very large expense when the hybrid battery will need to be replaced. The Prius is a great choice.

[@sulggothewise]

My Kia Soul of 13 yrs with 200k plus mile finally bite the dust. Lucky I've been putting aside for the last 5yrs. Thanks for helping me plan ahead Ramit because I'll be paying cash when I find one I really like.

[@jrg_lmnop]

Please buy a Toyota or Honda this time lol. 200k is nothing.

[@mamalovesthebeach437]

Bought my FIRST new car at age 65 because I could pay cash (but financed at 0%). My kid could buy any new car/truck he wants (and pay cash) but at age 28 he has used trucks and an old model car. I see so many people driving BMW's and big trucks and they're in deep debt, struggling to make rent. It's insane. Calculating maintenance and gas is critical. The same calculations must by considered when buying a house but no one ever runs the REAL numbers! This is a subject no one but you wants to address Ramit. Too many people dump their identity into what they drive.

[@paulbrungardt9823]

Poor people buy things to impress people they don't like.

[@laundrygoddess4]

Every financial channel I've seen is talking about car payments being a wealth killer. Lots of people are talking about it in general.

[@margie909]

Yes, poor choice of wording for the thumbnail.

[@patty109109]

Dave Ramsay’s most favorite saying “sell the truck”.

[@laundrygoddess4]

@@patty109109 it's right up there with beans and rice and rice and beans

[@handleyobusiness]

People can talk about this same topic all day long, and most people will still purchase cars on payments. It’s way too commercialized today for most people to get ahead financially.

[@laundrygoddess4]

@@handleyobusiness it's not even bad to use payments. But following simple rules like the money guy rules of 20% down, pay off in three years, and no more than 8%of your income really help keep it in line.

[@piergraham4181]

Great advice. When I was 21 and started my career, I went right out and bought a Corvette. After realizing what the payment and insurance was, the thrill lasted about 5 months and I was like "what the hell did I just do?" After trading it with a friend, I've driven used cars, fully payed for, all my life. Now I was able to buy my first brand new car with cash. I own 4 cars, 3 of which bought used, and all owned free and clear. When you're young, you've got to drive beaters if you want to build wealth.

[@gamesnstuff657]

I worked in the auto loan game, and man it was so hard to explain to people why the dealer was screwing them over. People get hyper focused on the Rate and not on the Rate + the Price and how they work together to screw you over. So many people paying more money just to have a 0% APR next to their loan. Also if you absolutely HAVE TO get a new car every few years then you should just lease your car. Because you won't get the benefits of owning unless you run your cars into the ground. Leasing isn't great, but it's a better deal than perpetually having an auto loan payment.

[@tessianoel187]

I bought a used Ford Fusion for 2,000 in November 2020. It is definitely a temptation to buy another, prettier car but I will run this vehicle into the ground. My goal is to get to 400,000 miles(I am at 340,000). I will be using the info you shared when I do buy a vehicle-especially negotiation! I didn’t even know you could do that so thank you!

[@dougk1115]

I think Fusions are great looking! Congrats. Oh, and I drive a 2001 Lexus LS430 with 346,000 miles. Bought it new in December 2000 and now enjoy low monthly maintenance costs with no more depreciation. Plus, still LOVE it! Keep it up!

[@DocsGreetingCards]

couldn't agree more. I no longer have car payments for many years now. I buy used Hondas or Toyotas in good condition with cash, have my mechanic check them out first, and keep them for decades. cost of repairs and cost of ownership much better than buying new.

[@ahn_atomy]

Hello from South Korea. When I came here from Central Asia country I have earned $2500 per month and still was in debt. Last year our gross Income was about $12.000 per month and we were still in debt. Watching your videos and applying your advices with my wife for 2 months gave me relief. We are still in debt but it is already less that it was. We managed to make our fixed costs to 60,9% and we are going to make it 50%. Thank you, Ramit for your videos it helps a lot even many miles away

[@neogeomedia]

Best decision I made as a young man was to invest an initial $1,000 in mechanics tools at Harbor Freight. I then watched youtube mechanics to learn how to do basic maintenance on my 3 cars. Brakes, Suspensions, Radiators, Oil changes, etc...are easy to do with a little know how and the right tools. I have saved an absolute TON of $$$. My Chevy , Dodge, and Pontiac are respectively pushing 300k,275k, and 200k. All of my close friends who bought luxury cars almost instantly regretted it..The main thing that hurt them was they couldn't keep up with the maintenance. Nothing looks worse than driving a luxury car thats dinged up and limping along...it screams that you couldn't afford it in the first place...Tools and knowledge are Independence. Recently saw a dealership charging $100 to change and engine air filter and $80 for the cabin filter. They are preying on older single women for sure. Ladies...You Can Do it!

[@kellygrace1617]

I waited until almost 50 years old to buy a Honda Civic and thought, "This car will last me about 20-30 years." :-) Solid advice Ramit!!!!! I bought a simple car, not a luxury car. I want $$ in the bank. Don't even get me started on BMW. So expensive to upkeep. I think, "What a fool," when I see someone driving one of those!

[@Raphinalove]

Know what you want and plan to keep it. I’ve had four cars (civics and Subarus) that have crapped out in the last ten years. I normally chose sensible and low cost but have been paying a lot for upkeep of older cars. I’m now about to take a car loan out and still feel bewildered. I think I have more insight now. Thanks @ramit

[@danielcnapich2702]

Sinking whole paychecks into my previous 20 year old vehicle to keep it running was a wealth killer too.

[@zo_471]

No car payment for 18yrs and it’s the best. Shared this with a friend who is looking to buy a car soon.

[@The82monte]

Problem is, most American made cars are junk over the past decade. I bought a 2019 Ram, and plan to keep it for the rest of my years. Hope to keep er running.

[@nigeljones8834]

Great video and your calculation on how much car you can afford could never be more true. I would like to share and over looked cost because maintenance can be broken down not just to schedule services out also pricing out wear and tear items and theirs cost. Big heavy hitters include: vehicles with specialty tires, timing chain vs timing belt, and complete brakes overall costs. Also looking at a cars major consumer complains especially when buying used cab also save you a lot of money. Hope this was helpful. Grateful for your content.

[@nickelarcade6934]

Came for the comments from everyone telling us how they haven’t had a car payment in x years. 😅 Great video. I’m guilty of the “what’s the payment” mentality. But you live and learn. Now I look at the total cost. Car Edge is a great resource for maintenance, reliability, etc

[@rmddesir3036]

Thanks for another informative video! One thing that I learned and surprised me is that you are a hilarious dude (it's not just what you say but also how you deliver it)! 🙂 You messages on personal finance are insightful and informative. People do stupid things with their money that make them suffer financially, but many (not all) honestly don't know better and good advice/information like this content helps! Keep up the good work, I am a big fan!!

[@Karen-op6vb]

The one thing you didn’t mention was the possibility of buying a newer used car. Our last purchase was a 2017 Honda CRV that we bought in 2018. It was used as a courtesy car by the dealership and had only 5000 miles on it. I’m not sure about other parts of the country but here in northeast Ohio these one year old vehicles are usually available in March and April and the dealers want to move them.

[@sarahomelia5368]

My sister bought a used car with cash, and now I am trying to do the same. Right now my transportation costs are $0, with my job I take public transportation for free. I am focusing on paying off my debt, which will be done at the end of the year. I am saving in the meantime. I tried to tell my mom how to afford a car, but her reply was "so I am supposed to buy a piece of shit car!". My dad is paying 2 car payments for my youngest sister. I agree, seeing how people get cars is painful. I love your Netflix show, please make a second season!

[@rossdean1997]

I am 65 and have not had a car payment since 1980. I bought a new truck in 1978, another in 1989, and a third in 2003. Total cost of under 45K. These three trucks got me through the Navy and on to retirement. Don't be a slave to the bank man.

[@handleyobusiness]

Words of the wise 💯

[@sergiop753]

Awesome video man! I have always had a similar philosophy about car-buying (because I really don't care about cars but the US forces you to have one in most places), and reading/watching you has been great to have a more informed way to look at it. I'm definitely taking notes for the next time I need to buy a car. I don't currently own one (got rid of it recently) but I know I'll eventually have to get one. I'm reading your book and I'm excited to get to the part about negotiations for when that time comes. Sidenote: The only thing I can complain about your videos is that "habanero" doesn't have an Ñ in it, please just say habanero, habaÑero drives me crazy 😂 Kindly: a native Spanish-speaking viewer.

[@kentfrederick8929]

Between my wife and I, we bought several cars with car loans and one with a home equity loan. But, we negotiated every car's purchase price, and then figured out the loan. With my first car, I worked with my bank, borrowing a pre-determind amount of money, and then went car shopping. I knew I had X available as a downpayment and had to get the price to X plus loan amount.

[@dacokc]

About 5 years ago I bought a 2014 Honda Accord for $15k. Did 60 month term. (Interest was almost nothing) and threw whatever cash down I needed to in order to get my payment to $200/month. Again the interest is almost nothing.. I had the cash to pay the car in full.. but interest at that time was almost 0…. I’m okay with that. Also wasn’t a brand new car.. 70k mile Honda Accord that was well maintained..

[@andrewheale9170]

Great video. I can't tell you how many 60k + trucks i see in my city hauling nothing but air. I'm going on my 5th year without a car payment lol. It all comes down to ego, once you can set aside your ego you can truly master your own finances. That's the biggest lesson I have learned in my life. Awesome vid!

[@AliGee_]

I financed my used car (8k) at 18% after graduating college. I know it’s a smaller amount compared to other car purchases but to me it was a huge deal because I was scared of being in debt. I paid it off in under 3 years always paying almost double the minimum payment. I’ve had that car for almost 7 years now and my car insurance is only $75/month. I’ve had several promotions and salary changes since then but I’m still driving my paid off car 😊 An acquaintance told me the other day she pays $600/month for car insurance 😮 she pays more than 6 months worth of my car insurance in one month. But of course it has to be a nice shiny car.

[@pacmanfanable]

It honestly blows my mind that this is not common sense or knowledge. So many people are “car broke”. High insurance, payments, interest rate. All with a bad credit score, and terrible financial literacy. Wait, build your wealth and get what you can afford. Then level up and get the dream car later in life!

[@Fanotesemara]

So subscription to manage unwanted subscriptions? Bro, you’re a genius 😅

[@jaydoesthings6845]

Great video and info! It’s sad that more people don’t realize that buying a car isn’t something you should walk into lightly, or blindly. But, that’s what you’re here for! 😊. Also, loved the info about the Fighting Chance website.

[@donkemp8151]

I bought a new Honda CR-V in 2020. 0.9% APR. The car depreciates about half of American made car. As a fellow financial advisor, I agree wholeheartedly with your premise. Expensive new vehicles cost far more than you realize. Especially when you consider Time Value of Money and what those payments would be over 20 or 30 years.

[@bio4564]

I had read about Ramit’s tip for the bidding aspect and tried this a few years ago and will definitely use it again when I buy in the future. Side bonus - by emailing the dealers you tend to get the internet or fleet sales folks that are more transactional and don’t tend to play the games some salespeople do.

[@huhhuhhuh4069]

I don't care about cars, I just need one that works. I chose the cheapest, economy class suv and paid it in full 6 years ago. The car is still going strong. I expect it to last at least 10 years. This has afforded me a lot of financial relief and has made my life a lot less stressful.

[@colonialstraits1069]

I run a small flooring business. I drove 15 year old Astro vans, (with 180,000-200,000 miles) for a decade. In 2019 I took out my first car loan, on a 2018 Nissan NV200 compact cargo van, with only 28,000 miles on it. I purchased it for $17,000 and paid it off in less than 3 years. It still has less than 100,000 miles on it and I intend to drive it for at least 4-5 more years. It gets 24 mpg and with regular maintenance, is the most reliable vehicle I’ve ever owned.

[@swithheld9905]

I completely agree. I've never had a car loan, have only driven cars paid for in cash for < $5K. I don't think there is ever a reason you'd *need* a car loan. 15 years ago I went car-less. That and keeping rent costs as low as possible are how I can sometimes save a thousand dollars in 1 month on a $40K salary (gross). It also means I can rent out the parking spot that comes with my apartment for $70 per week. Costs for an occasional shared car (like zip car) are included in my guilt free spending because driving is a luxury and not a necessity now. The car share companies have BRAND new cars and fully electric cars like Teslas, so I get to drive very fancy cars that I'd never purchase myself on the regular, WITHOUT any of the hassles or costs of insurance, maintenance, charging/petrol, parking, WOFs, registrations, etc. I previously thought about getting a car again but the thought of re-introducing all of that back into my life completely turns me off the idea. No regrets.

[@aprilzhao4730]

in 2015 my family bought a second hand 2009 honda civic for about $15000, it was a lemon car so there were fixes here and there around 2017 but it got to a stable state until the end of 2022 when problems started happening again and we sold the car (still had warning lights on) for $4000, felt to me like a great deal for 7 years of accompany :))

[@user-lm6me2tz9t]

A simple strategy, for simple people: *A)* Buy a new *sensible* car, in cash (do *not* finance it) and keep it forever. *B)* There is no step B, you won. If you cannot save up the money to buy a new sensible car in cash, then you cannot afford to finance one either. Simple as that :) Sensible cars: a Toyota Corolla, a KIA Picanto, a Suzuki Ignis/Swift, a Hyundai i10/i20, a Fiat Panda, a Nissan Juke, a Dacia Sandero. Stuff like that. Perfectly good cars that will take you everywhere and will last for decades.

[@DainLaguna]

If you’re gonna buy new, or used, buy a Honda/acura, Toyota/lexus, Subaru or Mazda. Low tco, holds value better than most and you’ll typically be able to get to 15 years/300k no problem. Also: maintain your vehicle. Most engines, even from these reliable makes, employee turbocharging, or direct injection. Keeping on top of maintenance and making sure you’re not putting shitty gas in these cars is essential. I’m not saying pump premium, I’m saying make sure you go to top-tier gas stations, like bp/quicktrip/shell/exxon etc. The extra additives keep direct injected and turbocharged engines cleaner for longer, and help reduce carbon buildup.

[@DrakeNAllen]

20/3/8! Put 20% down, finance for no longer than 3 years, and the payment shouldn't be more than 8% of your income

[@OspreyHomeInspection]

Money guy rules 😊

[@problematicpolarbear6065]

aim for 100/0/0

[@tamararoberson8060]

​@@problematicpolarbear6065The math is not always on your side paying cash for cars, especially if we're talking about new or late-model used/cpo car. It does free up cash flow if you need it but if your APR is under 5%, that money can be better used elsewhere. There are bank fees to start any loan but only counting interest, if you have a $50k car (becoming a lot more common), a 3% loan is $125/mo in interest but just putting the money in a HYSA instead nets you 5%, or $200/mo. So you're losing $75/mo by paying cash. The purpose of putting 20% down is to cover sufficient depreciation that you should be able to avoid being underwater in case you need to sell your car. It also ensures you buy a car within your means - if it's hard to save up 20%, you can't afford it.

[@janetkenny4861]

As part of 4 year pre retirement planning, I knew I wanted to replace my 13 year old Subaru with a new vehicle, which will most likely be my last. I worked the payments into my budget and bought the best quality Honda and nicest car I’ve ever owned. I made my last payment the month I retired and am so happy with my decision. BTW it did fit into the affordable calculation Remit is talking about. Best part is my son in law is using the Subaru as his commute car, and works on it himself, and it is still purring along! I also bought in early 2020 before all the prices went up and all the problems with chips, etc started.

[@MilaN-lt2mq]

My car is 14 years old. I bought it new in 2009 for 18K. The crazy thing is, it is still worth over 10K on the secondary market. I took it to a mechanic recently, he told me I could drive it for another 10 years, if I wanted to.

[@AdmanToronto]

When I bought my truck I bought a 3 year old truck, CHEAPEST trim level, 6 cylinder for gas efficiency and ticket price and paid it all off when the first loan payment came due. I USE my truck regularly by filling the bed completely for travel and I do A LOT of home renovation projects myself. AND I Plan to drive it until it won't drive anymore. I hope it outlasts me. My neighbor has a brand new RAM 3500 on a 96 month loan. NOPE.

[@matthewm8021]

And unless he has a CDL or is hauling a ton of stuff in the bed, he could have gotten a 1500 or 2500 and done everything he does with the 3500 while saving a bunch of money.

[@danigo7126]

During the pandemic, I tried to get quotes from Subaru dealers throughout Florida and was told that there was a geographic limit to the dealers I could buy from. I am not sure if that is the case today, but ended up not buying a car.

[@sandeeptanjore1253]

I would never even think of Subaru anymore. Have one now (since 14 years - Tribeca; 258,000 kms - Canada). Has turned out to be a gas guzzler + high maintenance (spent almost 9k in maintenance since 2019). Regret my purchase (despite being used). My next suv will be a hybrid - either Kia or Ford.

[@margie909]

Lots of people are talking about this, and the ridiculousness of big trucks.

[@kylerobinson8336]

This video comes in handy for me. Towards the end of this year I’m leaving my company to go full time into my own business and I have a company car.. I’m looking to keep my monthly expenses as low as possible

[@amandab3946]

I only saw the notification on my lock screen & didn’t take note of the channel name. I thought I was clicking on a true crime video about THE WEALTH (serial) KILLER! 👻💀

[@teddybruscie]

The real tip that he didn't mention that people should shoot for is not owning a car period. We have bought into car culture to the point that it's the only option. Most places have no public transit. People fight against it because they don't want to be around poor people even though they themselves are poor but because they can afford a BMW they think they're not. If you can not own a care you save more because you don't have to pay gas, maintenance, property taxes, etc. I want to live in the city so I can, ignore my car for months at a time. Only driving it to keep it functional, but daily riding a bike or public transit. That's the real tip.

[@CageFreeLowFatSugarFreeRange]

When i turned 18 my parents "gave" their car and the car payments for it. 600 a month at 18 years old in South Florida. And everyone around me said I was lucky. Just shows how uneducated all of us were and I am literally the only one now comfortable driving an older and paid off car while they still get new cars every other year

[@KNRS927]

Long time fan, read your book, and it’s helped me a lot with my finances. I see this topic a lot but the one thing I wonder is can’t a car be part of your rich life? I understand the problems with car buying mainly because most people who spend more on a car don’t really care for the car. However, what if it’s part of your rich life? Like not everyone’s rich life has to include short-time, small things like handing out candy bars in Halloween, flying first class, shopping without caring how much you spend, etc . What if you drive a lot for work or just like cars in general and having a nice car that gives you happiness is part of your rich life? Like isn’t it possible for a car to be part of the rich life for somebody. Plus I feel when you always talk about asking the big questions and not penny pinching over Starbucks and flying first class, what if those expensive purchases like a house and car are part of your rich life? Like isn’t it possible for someone to desire a rich life revolving around those 2 purchases and not really caring about the other small things? Love your content. I work in finance and I’ve seen plenty of clients underwater on loans. A lot of them are underwater on loans on cars they didn’t need nor want as they aren’t car people. However, what if you’re a car person and a nice car is part of your rich life? Isn’t it fine to splurge extravagantly there if you’re willing to cut back on other things, especially if you don’t care for them?

[@ramitsethi]

A car absolutely can be part of your Rich Life. But you have to be able to afford it. What we see with two major areas -- housing and cars -- is almost nobody runs the numbers.

[@lisawilliams7916]

Great video! My last vehicle is new and I got it middle December for about $5k less than the value and I am about 3 years in and actually it’s worth the same amount I owe. I also have. 3.75% interest rate before rates more than doubled. The next time I buy I will check out your tips regarding negotiating! I am holding off for now in hopes that rates drop sooner than later!

[@peterealey4004]

One of the ways I put money away is set up direct deposit with my employer, set up a supplement account.decide what amount I can put into it without affecting my lifestyle and every time I get a bonus, raise, etc I don’t miss it and before I know it I have a good amount accumulated. I live on the saying, pay yourself first!

[@sheh.9163]

I kept my car for 14 years….a 2009 Nissan Xterra😊 I love that truck. I still have it, but purchased a new car for reliability sake. However since I didn’t have a car payment for 10 years, it meant my new car payment is super low due to me putting a nice cash down payment. And I only have a 48 month loan at 2.9%

[@forrestson9242]

Total cost of ownership was very helpful to re-learn. I haven't bought a car in a while, but will soon. Thanks so much for reminding me it's much more than just a monthly payment!

[@bizHammer]

when I turned in my lease 2021. the new lease after 3 years was up from 38k to 48, then the rates went up, and full coverage went up 540 per month, payment 600. I walk out took an uber to used car dealer found a nice car paid cash 7k. next that year I paid off my credit card. I own my home.

[@ShatteredSoul2]

This is great!! Thanks so much for all the info you put out. When I was looking a couple of years ago I walked out of a few dealerships. Nobody wants to budge because they know someone will walk through those doors willing to pay what they are asking.

[@BattleDroid0402]

The other golden key is if you really are deadset on a luxury car and have the finances to afford it, just buy a used one with very little mileage and a clear service history. (Also avoid BMW but that's another can of worms) The other thing with buying a used car, if it is 2-5 years old good chance it's still that "new generation" of model you want but you'll save so much. Again just make sure mileage is low and clear service history. Anything to avoid debt and monthly payments is probably a good thing.

[@aminish1211]

I came across your videos while just doing some random search on KZbin and subscribed it same day. I like your approach. I was trying to put my numbers in your sheet to see how does it look like for me and how i can improve my financial situation. For asset part, i wanted to check where you will keep the house. I bought mine 4 years back and due to hike in property i have 50% equity in the home now. Should i consider that 50% as an asset? Thank You

[@kylep3759]

I have a 2003 BMW 330i and it's killing me right now. I paid $2500 for the p.o.s and I've put over 10 grand into it and it still gives me a lot of trouble. I know that's not a lot of money for most people but it is for me.

[@YouMadNow]

I did cave and purchase a brand new Tesla Model Y last year. I tried justifying the cost in a variety of different ways. We pull in 230k pretax and my Honda is completely paid off. In general I haven't been stressed about money but I'm also not happy with the way our savings is building.. We are really looking into tools to help better budgeting, but right now I have resorted to spreadsheets because all of the various APPs just haven't given me the degree of control that I'd like...

[@V8Brah]

Teslas suck

[@matthewm8021]

We generally keep our cars for 7-10 years. If they are financed, we only do it because we are getting more money, after factoring in income taxes, in interest then we are paying on the car, otherwise they are paid off in cash. My wife and I both drive nice cars, but they are well within our income and driving a newer, safer car gives us peace of mind in case we are in an accident.

[@chapman1569]

We usually keep our vehicles 8 years. We got two PHEV's, the gaz mileage is great. The electricity is not a big expense even if they cost more when buying. It is kind of buying the amount of energy to power the car in advance; you will buy less gaz. Imagine if you bought a big truck and you paid in advance for 8 or 10 years of gaz, it would add a lot to the truck' payments. However, when the hybrid battery is no longer efficient or needs a replacement, it can be costly and necessary if you want to continue to drive the car. The same for an electric car, when the battery is no longer good, the car has almost no value. We dont regret our PHEV's but it is something to think about. If you drive in the city, a regular hybrid is a very good choice, it will still save you gaz. A PHEV is great in traffic, whenever it doesn't use energy to propel the vehicle forward, it save it in the battery, it is an energy miser in these instance.

[@johnandrews5479]

The only car payment I ever had was for my very first one, a 74 Plymouth I bought for $1400 after graduating from college. I drove it 7 years before getting a job that came with a company car. I just wanted to get a credit history started. Both ones I have now are appraised at more than I paid for them.

[@Wellingclub]

Worst mistake I have ever made. Aiming to pay off In 17 months and keeping for as long as possible.

[@jrg_lmnop]

I hear you. You’ve already made the first step in the right direction: admitting you were wrong.

[@cubanorasta94]

The bidding war was crazy. Thanks for this advice.

[@zackf7717]

I have bought 2 new cars in my life but when I bought new i made sure it was 0% interest both got paid off in due time. my 2012 fusion was a great car but unfortunately after 6 years and over 100k miles I slid on ice and hit a tree and totaled it. Thank God I had insurance and insurance gave me 10K check towards a new car. I used that to get a 2018 explorer at 0% interest and it was paid off in 2023. I hope and pray that it last me 10-15 years or more as my motto is "run it until the wheels fall off"

[@bunacat1]

Yes! My 2012 Camry is still rolling. I bought it used in 2013 and paid it off a couple of years later. I will drive it till it dies.

[@zackf7717]

@@bunacat1 my wife has a 2013 cmax hybrid with over 190K miles still going strong i told her we drive it until it dies but if we ever have to replace it our next car is a camry hybrid. Glad to hear your 2012 camry is still rolling and may it roll on for another 10 years or more

[@jasonhughes5329]

I have the best of both worlds. A 2001 Tacoma with 160k miles on it. It will outlast the Earth’s supply of gasoline, and I also get tons of compliments and offers to buy it at the gas station. A cool car that is also reliable. 👌

[@tylerk.7947]

I feel like he could have gone into the price difference of purchasing used versus new a little bit better. In my experience, purchasing used Toyotas in the $20,000 range has worked out very well for me. You need to learn a little bit about cars to be able to assess the condition when purchasing, But on my last three cars, I’ve been able to sell them for only a couple thousand less than what I purchased them for after having put years of driving on them. People think used equals more maintenance, but that’s not always true. Purchasing a new vehicle, doesn’t mean it won’t have problems

[@iceyaj3167]

Dad once told me "son, never buy a vehicle that cost 50 percent or more than your yearly salary"

[@alainochoa]

I do agree generally with the approach, but also be conscious that better fuel efficiency or longer (promised!) life in a brand may not be worth paying more depending on how many kms/miles you drive each year. Perfect example (at least in Europe) is the higher price tag of hybrids or electrics.

[@bluecollarbullionballer4269]

Im 53 years old and I have only owned three cars in my life.I did make the mistake of buying a new car.However paid it off four years early.I am happy with my car.I have nobody to impress.This practice has helped me stay out of debt including my home.My coworkers drive 100k trucks I buy cashflowing assets.Happy investing/stacking.