Personal finance expert Dave Ramsey is once again sounding the alarm on one of his biggest financial pet peeves: car payments. In a recent post on X, he urged followers to stop financing anything with wheels or a motor.
Loans Are A Trap, Not A Tool
“Cars, trucks, RVs, boats, and everything that has motors and wheels go down in value,” Ramsey wrote recently. “NEVER finance them, because they go down in value and you get stuck in them. Don't let debt trap you in something that's losing value every day. Save up, pay cash, and own it outright.”
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Ramsey’s position is straightforward: buying vehicles with borrowed money is one of the biggest reasons Americans struggle to build wealth. On an episode of “The Ramsey Show,” he told a caller, “If you want to be middle class the rest of your whole life, keep a car payment. Mathematically, it'll just hold your butt right there, it'll just keep you from succeeding.”
His tone might be harsh, but his message resonates with many who want to stop living paycheck to paycheck. Ramsey often says the goal is to get to a point where “they don't own us; we own them,” referring to vehicles.
Still, his advice doesn't go unchallenged.
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Not Everyone Has The Cash
After Ramsey posted his car advice, some users on X pushed back, saying it’s unrealistic. One reply read, “Most people don’t have $15k in cash.” Another commenter wrote, “Such a boomer take. For some people it is literally the only option. I had to finance a work truck, without it wouldn't be able to make money, and slowly paid it off just fine.”
Others argued that not all vehicles lose value, citing used Jeeps and boats that were sold for more than the purchase price. One user quipped, “Cash also goes down in value. That’s why we have never-ending inflation.”
Ramsey stands by his view, insisting that car payments are a middle-class mindset and a major obstacle to financial freedom. His long-standing advice is to never buy a new car unless you have a net worth of at least $1 million.
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Used Cars, Paid In Cash
Ramsey encourages buyers to plan ahead and save. A recent blog post on the Ramsey Solutions website recommends skipping the car loan entirely: “The car you can afford is the car you can pay cash for up-front. Not only is it possible, it's also the best way to buy a car, hands down!”
The message might feel outdated in an era of rising costs and limited options, but Ramsey argues it's the only way to stop letting debt eat away at your future.
And while Ramsey urges people to avoid loans at all costs, federal data suggests most Americans aren’t listening. According to consumer advocate organization PIRG, 85% of new cars and more than 53% of used cars were purchased with financing in 2019.
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