There are lot of different ways to buy a car, but I prefer the Dave Ramsey Way! I’m going to share with you how to buy a car the Dave Ramsey Way and why it’s a GREAT idea!
I know not everyone will agree with me and that’s ok! I can only share what has worked for our family and because I know you love to live as frugal as possible, I think you might love how to buy a car the Dave Ramsey way as well!
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Why We Needed A New Car
First, let me paint the picture. Being an adult is hard. So hard. Right? Here’s why we need a new car really bad – check this baby out – this is my Dave Ramsey-mobile.
It’s a 1993 Honda Del Sol convertible, lime green with lime green wheels too, it was a beauty when I got it 21 (gasp) years ago!
I LOVE this car, but let’s be honest – it’s old, worn out, rusting, the paint is peeling all over it, and it’s only a 2-seater.
Let’s rewind even farther for a little back story. Who’s heard of Dave Ramsey? If you have not, I highly recommend checking him out! Around our house we call him Uncle Dave, even though we have no relation to him at all.
When we first got married someone gifted us with The Total Money Makeover book and after reading it, we joined a Financial Peace University class. Our newly married lives were completely changed – in a good way. We had $90,000 of debt when we got married and after taking his class we were able to pay off ALL of that debt in just over a year.
No kidding! We got extra jobs, worked our butts off and lived on beans and rice. Boy was I glad the day we payed the last debt off! I was so proud of us. Now, we are 17 years down the road, still living debt-free and we never fight about money – which is a huge plus!
Paid For Cars Drive Better!
Now back to my story, we really need a new car. My beautiful green machine – the lovely Dave Ramsey-mobile is on it’s last leg.
In fact, this was the first car I ever owned – I was given this car when I turned 16 and that was a long time ago.
My poor husband drives it to work every day and has for years and years. It’s reliable, paid for, and does the job.
It also gets great gas mileage, but, we are ready to move on to another vehicle that we can fit our kids in. As you can see, this car is only a 2-seater, and that’s hard when you have 3 kids.Paid for cars always drive better! Click To Tweet
My husband would like to get a truck. I would too. Who knew that trucks hold their value so well?! Not us. We know that now.
Save Money To Pay Cash For A Car
We have been saving for a few years, anything extra at the end of the month, and have managed to save $10,000. It’s a nice chunk of change, but it’s not going to buy much of a truck – we’d need double that to get something that will last us a few years.
Although my husband would really like a truck, we have decided the ‘adult’ decision would be to get a car instead, as they are cheaper, and we can pass it to our son who will be driving (gasp) in 3 years (ohmygoodness, I can’t believe he will be driving soon….ahhh!!!).Always Pay CASH for a car! ALWAYS! Click To Tweet
With new resolve, we began looking on Craigslist for a car with lower miles, and is only a few years old. Imagine my luck when not an hour earlier someone had posted a gorgeous sedan, a few years old, with only 30,000 miles on it – asking only $13,800, claiming he was a very motivated seller.
The blue book on this car was mid $14,000′s. My bargain hunting ears were fully listening. Just what I like to hear – someone who took really good care of his car and was motivated to sell and offering a deal.
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Turn On Your Bargain Hunting Ears
Of course we had to go check it out. We were the first people to call him and the first to check it out. It was beautiful. Really – just like his Craigslist post said. We talked him down to $13,400 – even better deal. Then we shook hands and said we needed to discuss it first. He said he would hold our place in line for a day, because he did have a handful of others interested.
We talked about it the whole way home. What would you have done? Would you have said it was too good of a deal to pass up and just went for it?
The next day we did not own the beautiful car. I’m super sad, but feel like it was the right decision.
How To Buy A Car The Dave Ramsey Way
I had a crazy dream that night about Dave Ramsey shaking his head at me and saying “When will you learn?” and then right after that the roof was blown off our house.
For those of you who are familiar with Dave Ramsey, he teaches about this thing called ‘Murphy’s Law’ and buying a car that we can’t afford is like asking Murphy to move into our spare bedroom.
You see, the only way we could’ve purchased that car with cash was to take the $10,000 we had saved for it and then dip into our Emergency Fund for the rest. I don’t care who you ask, buying this car is NOT an emergency.
Both of us feared that if we did take money from our Emergency Fund that a real emergency would take place and we wouldn’t be able to pay for it because we just bought a new car with the emergency money.
Never Take Out A Loan For a New Car
We also had the option of taking out a small loan to pay for the extra, but by the time we paid off the interest on the loan, this car that was such a great deal was not as good of deal anymore.If you can't pay cash for your new car, you can't afford it. Period. Click To Tweet
I’m sad that we missed out on this car and am hoping that when the time is right, we will find another great deal. BUT, I’m still bummed and hate having to make adult decisions. See what I mean being an adult is hard?!
So, do you drive a Dave Ramsey-mobile? I’d love to see a photo of it! You can upload a photo of it on my Frugal Fun Mom Facebook Page – or add one to Instagram and tag me @FrugalFunMom in it. I can’t wait to see your photos and hear all about it!
I’d also love to know what you would do in our situation?! Do you agree with how to buy a car the Dave Ramsey way, or not? Tell me all about it – whether you agree or not!
We Found A Great Deal On A Used Car
UPDATE – 7 MONTHS LATER: We sold the Del Sol by posting it for $700 (Blue Book was about $500) on Craigslist and within 2 hours, I had 12 offers and a bidding war broke out for it!
We eventually sold it for $1000, to a middle aged man on Craigslist that I’m positive knows Uncle Dave too! He arrived at the test drive in his gorgeous Lexus SUV and said he was looking for a commuter car because he had a very long drive to work each day, and he didn’t want to put the miles on his Lexus. Smart guy!
All this talk about finding a good deal and saving money reminds me of another great post on my site about 5 Easy Ways For Moms To Save Money – Today!
Consider All Your Options
Shortly after selling the Del Sol, we found a sweet deal on a 2013 Subaru Legacy (4WD, which is what we were looking for living in Colorado – my Del Sol was only 2WD and we were tired of that).
It had low miles, was in gorgeous condition, and was very clean inside and out. The only catch was that it had a Salvage Title. For those not familiar with this, a Salvage Title means that the car has most likely been in an accident, or had some type of damage.
SALVAGE TITLE: a salvage title is a form of vehicle title branding, which notes that the vehicle has been damaged and/or deemed a total loss by an insurance company that paid a claim on it.
I realize a Salvage Title can be scary and quite honestly, it should be. A lot of Salvage vehicles are very damaged and would be worthless to try and fix, let alone drive. On rare occasions you can use this Salvage Title branding to your advantage.
First of all, a vehicle branded Salvage will cost less and you may be able to find one with very minimal damage. Which was our case. The vehicle we found had a Salvage Title, but we had a very reputable mechanic check it out and he said it looked great!
It had very minor damage that didn’t really affect the overall car. It’s not perfect, or pristine, but it’s in excellent shape for what we need it for and saving that much money makes it drive even better!
Paying With Cash Can Get You A Deal
Paying with cash can get you a sweet deal! We talked the seller down from $8200 and only paid $7500 cash! We couldn’t be happier! I know my hubby is so happy to no longer be driving the green machine anymore!Paying for a car with cash can get you a better deal! Click To Tweet
We know the new car won’t have resale value – but we don’t plan to ever try and sell it – most likely it will be our kids’ car to share some day. It’s nothing fancy, but it’s a nice looking car and we are really happy with it! Plus, we got a deal – and had money left over! I know Dave Ramsey would be pleased! Right Dave?
Frugal Tips For Buying A Used Car
- Save money and pay cash for whatever car you buy.
- If you can’t pay cash, you can’t afford it. Keep saving, or find a cheaper car.
- Only buy used.
- Don’t take out a loan for a car.
- Buying a new car is not an Emergency – although it might seem like it.
- Do your research, consider all your options – including Salvage Title vehicles to find the best deal.
- If you do look at Salvage Titles, make sure you have a mechanic check it out before you buy it.
- Ask for a deal – negotiate. Even if the seller won’t negotiate, at least you asked. There are so many discounts and deals left on the table because we are too scared to ask. The worst they can say is “no”.
- Pray about your purchase. If possible, ask for 12 hours to decide before you buy. Walk away, pray about it, and see how you feel once you had a chance to think about it.
- Buy within your means. Make sure you don’t overpay or buy more of a car than you really need. Remember, a car’s worth goes down in value every day you drive it.
- Typically you will pay less with a private sale, than going to a dealer. And, you will pay even less when you buy with cash.
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