Drive Free, Retire Rich

[sandorski]

Learn how to Hotwire, take 1 vehicle from Point A to Point B, repeat as necessary...

 

[JEDI]

I've known this since about 12 (thanks Dad). Never had a car payment never will. Too bad he doesn't take it to the next level and talk about what a rip off full coverage insurance is on your cash vehicle.

elaborate pls since i paid cash for my car and have full coverage

 

[MustISO]

Both of our new cars were financed for less than 1%. Didn't seem like a big deal. We keep our cars for 10-12years so we have plenty of time without payments.

 

[Pulsar]

Because you get a new car with a warranty for under 20k that will be significantly safer, more efficient, and more than likely more reliable. For a couple hundred a month..sure.

<sarcasm>
What are you talking about? I'm certain I can find a 4 door full size pickup that I can use to tow 10k-20k loads 1500+ miles without any worries of breakdown or failure for under 5K.

Yeahhhhh.
</sarcasm>

Why would ANYONE take out a loan on a mortage? Shoot, just live under a bench until you can pay cash....

F'ing oversimplifying idiots. Seriously.

 

[Bignate603]

My car loans are at 1.9% and 0%.

I didn't watch the video, but I'd lose way more in depreciation and inflation saving up and upgrading my car (assuming the method based on posts)

Did you have to turn down another promotion though to get those rates? Often the incentives are some form of money off the cost (cash back, rebate, incentive, etc) OR the really cheap financing. If you're turning down money to get lower interest you need to factor that into your decision.

 

[ElFenix]

the real trick is not getting a new car every 3 years.

 

[Shawn]

Wish I didn't have any car payments... my wife still has over $6000 left on her car loan. Was originally $14k. I wouldn't have ever spent that much but she bought it before I met her.

 

[overst33r]

the real trick is not getting a new car every 3 years.

3 years? I've been driving for 4 and am on car number 7 or 8. i lost track 😱

 

[Shawn]

3 years? I've been driving for 4 and am on car number 7 or 8. i lost track 😱

WTF? Why would you go through so many cars?

I bought my first car used. It was 8 years old and I drove it for another 5 years before getting my current car which was also used but only ~8 months old. I have had that car for about 3 years now.

 

[overst33r]

WTF? Why would you go through so many cars?

I bought my first car used. It was 8 years old and I drove it for another 5 years before getting my current car which was also used but only ~8 months old. I have had that car for about 3 years now.

I'm a car guy who gets bored easily and want to try different cars. I eventually will go back to the cars I loved the most and buy one of each. :thumbsup:

All of my cars are used and paid for in cash up to this point, I usually make money or break even after all is said and done because I don't keep them for a long time they barely have time to depreciate.

 

[ElFenix]

3 years? I've been driving for 4 and am on car number 7 or 8. i lost track 😱

are they each new? not new to you. new as in never been titled new.

All of my cars are used and paid for in cash up to this point

no, i see that they're not.


point stands. don't get new cars all the time.

 

[Shawn]

I'm a car guy who gets bored easily and want to try different cars. I eventually will go back to the cars I loved the most and buy one of each. :thumbsup:

All of my cars are used and paid for in cash up to this point, I usually make money or break even after all is said and done because I don't keep them for a long time they barely have time to depreciate.

Why not just lease?

edit: I guess if you are breaking even then it's not a bad deal, but seems like a hassle anyway.

 

[polarmystery]

My last car payment is this Thursday, and it's Blue book value is over $6k. I plan on running that thing into the ground.

I am excite! /borat

 

[ElFenix]

Why not just lease?

edit: I guess if you are breaking even then it's not a bad deal, but seems like a hassle anyway.

because leasing you're paying for the most expensive part of the car

 

[Dr. Zaus]

hahahaha... -12&#37; sounds about right for the last 10 months. Pretty much everything linuxboy said across the board. I don't ever even recall seeing 12% on all stock index funds when times were good. It's incredibly insulting that he "suggests" people invest in such high risk funds for short term reasons.

Uninsured non-hospital health-care bonds can net net you 12%....

just have to risk that 18% default :-D

Oh; and of course: Pre 2008 real-estate investing: Super solid numbers on that.

 

[Kroze]

Aren't short term capital gains are taxed at 25&#37;? lol. Where is that in his magical formula

 

[DrPizza]

+2

Unfortunately, Dave's advice is stupid. It does not take into account increased car repairs from driving older vehicles nor does it account for sales tax from buying the cars.


What about the increased risk of massive car repairs from driving a $1,500 and $5,335 car for 20 months with no warranty (I've own cars in that price range that have required $1,000+ in repairs in one year)? Title fees from switching cars so often? Etc...

I think you're exaggerating the risk of repair bills based on your own misfortune. Major repairs of properly maintained vehicles aren't really that common until very high mileage. Half an ounce of ambition & some mechanical aptitude takes care of the vast majority of routine maintenance (replace brakes, radiator flushes, etc.) In the last 20 years, the only "major" repair I've ever needed was a head gasket replacement.

On the other hand, one thing you can do in purchasing a used vehicle is NOT to purchase a vehicle that the replacement parts are known to be expensive for. i.e. used Subaru?! Are you nuts? But, some vehicles - replacement parts are dirt cheap, and on the shelf at parts stores.

 

[sunzt]

First half is common sense, but good advice. 2nd half... not so much. He should stick to debt reduction as mentioned by another poster...

Also, hasn't he ever met an asian person? Isn't this pretty obvious stuff?

 

[rcpratt]

WTF? Why would you go through so many cars?

I bought my first car used. It was 8 years old and I drove it for another 5 years before getting my current car which was also used but only ~8 months old. I have had that car for about 3 years now.

Meh, I only lease cars because I was spoiled as a child. Growing up in a Ford family, the way it works for employees at a certain level is you can lease up to three cars per family, one year leases, at a ridiculously good rate that includes insurance. They have even better specials for certain models/model versions that they want to sell that year. So in high school, after I turned 16, I had three different brand new cars for a year. Spoiled me for life.

I leased Fusion on a 3-year lease starting with my sophomore year of college, and then signed a 2-year lease on an '11 Fusion after graduating. I can still get slightly better than A/Z pricing, so it's not as terrible an idea to lease as normal. 2011 Fusion Sport with 16.5k miles/year for 2 years for less than $300/mo, sticker was $33k or so.

I'm great financially so it's the one thing I let myself do that is, I guess, less than ideal.

 

[JulesMaximus]

12% from a mutual fund? i don't buy that..a fantastic ROI is like 8%...typical i imagine is half that.

also, this is why you don't take out 72 month loans at 8.9%. My car loan was 19k @ 3%...in total, I'm only paying $1500 interest over the course of the loan.

And I put 10% of my salary towards retirement (+5% employer contribution = 15% total)

Mine was 1.9% for 60 months. It has been paid off for over 3 years now though.

 

[MarkXIX]

No, I am just pointing out how everyone on the forum is brilliant, makes all the right life choices, is good looking and has a hot wife/girlfriend.

I'm not very good looking, a little rough actually, but manly. For some reason, black women are taken to me, but I prefer hot Hispanic women so I'm married to a hot Puerto Rican woman.

That said, I made over $100k last year, but I worked my ass off for that. Also, I drive a 10-year old Dodge Stratus and although I fucking hate it, it does what I need it to do and it has been pretty reliable.

I am the 1%

 

[AstroManLuca]

The thought of buying a brand new car and then selling it as soon as it's paid off so I can get another loan and buy another brand new car has never even crossed my mind. That's just ridiculous. And $26,000? Yikes, I'd never spend that much for a car. I see so many expensive cars driving around and think, if you had just bought it used instead, you could have gotten it for half that price. A brand new Camry costs about that, if not more, but get one with 50k miles on it and all of a sudden it's under $15k. Which is a pretty low monthly payment especially if you can make a significant down payment.

I'm not totally opposed to loans; sometimes you just need a car and don't have the cash saved up to buy one outright. But keep the loan manageably small and do some research on which car to get to minimize your loan and maximize the lifespan of the car. Look for the sweet spot where you can pay off the loan in just a couple years and get many years of service out of the car.

 

[DrPizza]

I can't remember who the financial guy was who said this, but if you *need* to take the loan out for more than 36 months, then you can't afford the car. There are reasons to extend the loan beyond 36 months (0&#37; interest, etc.), but if you can't afford the payments for a 3 year loan, then you're spending too much on the vehicle.

 

[OILFIELDTRASH]

I can't remember who the financial guy was who said this, but if you *need* to take the loan out for more than 36 months, then you can't afford the car. There are reasons to extend the loan beyond 36 months (0% interest, etc.), but if you can't afford the payments for a 3 year loan, then you're spending too much on the vehicle.

I don't agree. If you can get a super low interest rate spread over 5 Years then why not give yourself a little wiggle room.

 

[ponyo]

I can't remember who the financial guy was who said this, but if you *need* to take the loan out for more than 36 months, then you can't afford the car. There are reasons to extend the loan beyond 36 months (0% interest, etc.), but if you can't afford the payments for a 3 year loan, then you're spending too much on the vehicle.

Clark Howard. It's good advice.