The Car Owns You!
by Dave Ramsey

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Dear Dave,

I’m 22-years old, in the military, and our yearly household income is about $20,000. We’re trying to get out of debt, but we owe $13,000 on a car that we financed at 14.5 percent. We both got $500 limit credit cards to help rebuild our credit rating, so we could refinance the car at a lower rate. Can you give us any other advice?

Josiah

Dear Josiah,

I can definitely help you with the interest rate problem. Sell the car! No, I’m not kidding. I’m not trying to beat you up, but you’ve got no business with a $13,000 car when you’re only making $20,000 a year. Even if you’d paid cash for it, that’s way too much money tied up in something that’s going down in value. You don’t own the car, dude, it owns you!

Right now your entire life revolves around finding a way to keep a car you can’t afford. That’s ridiculous! If I were you, I’d sell the car, go get a little beater to drive, and give my wife a big hug. This thing is putting unbelievable stress on your marriage, dictating your direction in life, and it’s just a stupid car! Forget the idea of building your credit, too! That’s one of the biggest myths around. Credit hasn’t been much of a blessing to you so far, has it?

Here’s the deal. If you can’t pay cash for something, you can’t afford it.

When you pay cash, you don’t have any payments. Then, you have control of your most powerful wealth-building tool – your income! Now that’s a formula for success!

– Dave

Photo by Yogesh Arora

Comments on this article	ADD COMMENT
You get what you pay for Posted by Brenda from Herriman I had a son born with juvenile Diabeties I bought cars I could afford and the ward members got tired of giving be rides at the last minute to the ER or Doc. appt. espeacially on Sun. and Mon. B.George
Way to go Dave. Posted by W. Susan from tennessee Your right, I hate to admit it because you have been a park of our lives, radio, books, tv, etc. I really began to resent you, that is, until I began to listen. Thanks, I,we are debt free and loving it. Our car is a 2002 and we paid cash for it, would I get rid of it, NO, and I can live this way because you cared enought to teach me. Susan
Amen Dave! Posted by Michelle from Blue Springs, MO I have a 1999 Nissan Maxima that has 164,000 miles and is my dream car! My dad has one that has 300,000 miles. I have not had a car payment for YEARS...it feels sooooo good. I recommend selling your car and get a good quality used Nissan Maxima.
Agreed, but... Posted by Marcus from All over ... military personnel have no health/dental insurance costs, cheaper food, and other discounts. Those living on-base likely also pay no rent.