Dave Ramsey has done the math on new car loans. If you have a 30 year old couple, and like many couples do, every three years they both buy new cars. If that is a $35K car, there will be about $5,000 depreciation for each car, every year.
That is ten thousand a year in depreciation plus maybe $300 a month in interest.
Also, save up the money and pay cash and there is no interest.
So Dave will point me to these three year old Toyota Tundras, Tacomas, Sequoias, Highlanders, 4Runners etc... that I can pick up for $15k under new?
What interest rate am I sitting at on a $35000 vehicle that I'm paying $300 in interest each month?
If I save to put cash on a car at $XXX a month there is little difference that me having the vehicle and handing the bank $XXX a month at 0-2 (which is a pittance), no?
Dave Ramsey is great if you are a product of the depression or are not disciplined enough to keep your head above water - you know, the kind of people that put vacay on a credit card and let her ride at 27%.
