Dave Ramsey hasn’t tried to buy a reliable used car in the last decade, at least. You aren’t going to find anything under about $10k that’s actually reliable where I am. A mid-90s Toyota with 300,000 miles maybe, but not anything under 150,000.
With the $554 average new car payment in the original post, you can afford that $10k new-to-you used car outright in cash every 18 months.
Average price of a used car in the US, right now, is $29,000. Which means that for a $554 payment, it’s going to be 5.4 years rather than 1.5. From there, you need to figure out how many miles you put on a car in a year, make some rough guesses about how many miles the average car has left before the cost to repair exceeds the cost of replacing, etc. Obvs. a high mileage used car is going to require significantly more maintenance than a new car will (…in most cases, as long as you aren’t buying a new Land Rover or Jaguar), so you’ll need to figure that in as well. You’ll probably want good insurance, even if you’re only required to carry minimal liability insurance, because any accident could be catastrophic for your finances if you can’t afford to repair your car.
It’s a bit of a death spiral; wages are still too low, car prices are too high.
Sure, but in 2023, someone could already be selling a 2022 as used. That $29k number is going to be skewed by those who sell younger cars. You can still find used cars much cheaper than this.
For that $554 payment, you would need $6648 in additional yearly maintenance costs on an older vehicle to compare. That’s like a new engine or transmission, every year!
Anecdotally, I drive a 32-year-old car that I purchased, coincidentally, for $3200 around 7 years ago. I haven’t spent even close to $6648 in maintenance that entire time (probably not even another $3200).
I walk or bike to about 90% of the places I need to go. That said, I also recently bought a vehicle for $1200. Works fine except the fuel gauge is broke so I have to just keep it topped off. My neighbor is trying to sell his Kia Rio for $1500. Works fine. It’ll last at least another 3 or 4 years. Likely more. I have a friend whose son totaled out his car. He wanted another. I recommended a car that was in the $1000 to $2000 price range. He didn’t want it. He took out a loan and got a very nice, very sporty car. Then he got in another wreck and totaled it out too. So then he goes and gets himself another expensive car. I just don’t understand.
If I took my bike to town, it would take me about an hour, give or take. To get home would be about four hours. It’s 15 miles, one way, with about 2200’ of elevation change.
