Why Is No One Talking About America’s Wealth Killer?

The car you drive can absolutely destroy your chance at building true wealth. But it doesn’t have to be this way — I’ll show you what to do instead.

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Ramit Sethi is the host of Netflix’s “How To Get Rich” and New York Times bestselling author of “I Will Teach You To Be Rich”

[EmpressoftheLibrary]

I haven't had a car loan in nearly 20 years. When I finished paying off my last car loan, I started taking what had been my monthly payment and putting it in the bank. I drove that car until the wheels fell off, so to say. By the time that car was no longer functional, I had enough money saved up to pay for a new car in cash. I haven't had a car loan since.

[sw]

The most important skill you will ever have is walking out of a dealership. I’ve had dealers refuse to negotiate. I walked. Salesmen who won’t give the total cost of the car. I walked. I once had a dealership add on an extra year to the proposed terms of a loan just because they thought I was that stupid. I walked. You do not have to go through with the purchase unless it’s what you agree to. Don’t be pushed, pulled, bullied, enticed. You can walk. Just walk. WALK.

[matthewshannon]

I make $200k and drive a $15k used nice car. I don't have to worry about finances at all. I work at a prestigious law firm. I still drive a Cadillac and everyone is blown away I don't even pay more than a couple hundred for 2 cars! My mortgage is $2000. People who make 5x my salary are so stressed about finances...

You can get a nice car that is reliable for less than $20k. My Cadillac has very high reliability ratings according to all the reputable car sites.

The freedom I have to eat out whenever I want and not even think about a $200 date night with my wife is marvelous.

[HappyGrenades]

I sell cars, and you are so accurate. As another insider tip for those who catch this comment, don't burn bridges. Don't tell any other dealer you're going with a specific offer until it's over. This gives you the power to walk. 9/10 times if I pick up the phone and a person says "I'm at your competitor, they gave me this offer over but changed the terms on me when I got in, " I'll beat their original offer. Any negotiation you go into you are so so so much more powerful if you can genuinely walk from the table.

[peterjurgens]

I did the same thing up until 40 years old. I had $2, 000 cash to my name and a mortgage payment. Now at 60 I have a million liquid, a duplex paid for and generating $50, 000 annual. No credit card debt or car payment. I drive a 18 year old Silverado. My house is almost paid for that is worth $600, 000 and to mention the duplex worth $700, 000. I listened to Dave Ramsey and was were very focused the past 20 years. Stop trying to impress people you don't know or like.

[iceyaj]

Dad once told me "son, never buy a vehicle that cost 50 percent or more than your yearly salary"

[Wallymakesstuff]

As a former car rental GM, we closely monitored the TCO of every vehicle. BY FAR, the most affordable cars to own were Toyotas. This factors in long term depreciation (purchase price minus sale price divided by length of ownership )fuel mileage, maintenance and repair. Camry and Corolla were about half the cost of similar sized gm/ford/dodge, about 20-30% less than other Japanese makes of the same class, and about 3x cheaper than European cars of the same class.

[jonm.]

The reason I like Ramit is because I live his philosophy. I mercilessly cut costs elsewhere (meal prep, no drinking/smoking, cheap hobbies etc) so that I can spend extravagantly on my car. I spent about $30k for a BMW 340i and I’ve had it for two years now- I love it. Yes it is fully paid off. It can work, you just have to be mindful of your budget!

[getinthespace]

I saved 84% when I bought my truck by doing 2 things...
1. Buy used, 2-4 years old after the vehicle has deprecated 40%. Still under warranty, 30k miles or less. Find a good deal on a lease return.
2. Save up your money upfront and pay cash. It takes 5 years to save $36k at $500/month. A 5 year loan at 7.5% interest for the same amount costs $721 a month. Paying cash saves 44%.

Drive a vehicle for at least 10 years to get your value out of it. Avoid luxury brands with high repair costs and poor reliability.
Some luxury brands are great deals used... Acura, Lexus. They are essentially upscale Honda and Toyota with great quality that can be purchased used for similar prices to used.
The luxury brands just deprecate faster because they are bought/leased as status symbols and offloaded after a few years for another new vehicle.

[elliottnixon-wqsp]

Dear Ramit’s video editor: please compile all clips of Ramit’s epic meme faces and put into a clips compilation. It will generate the subscriber equivalent of compound interest.

[danwelterweight]

This is exactly the reason why dealers almost have a heart attack and their faces go sour when they hear you want to pay the full price upfront and don't want to auto finance your car. 😂

Don't tell them upfront, leave that to the very end after they tell you the price of the vehicle and be willing to walk away if they try to change the price of the car after you tell them you are paying the full price upfront.

[michaelmedina]

In the end, someone spends so much money on a car for it to be parked for 40 hours a week while you are inside working.

[DiFinni]

A friend of mine was leasing a car for $750 a month a few years back. He was happy that every 3 years he'd trade in and get a newer car with all the fancy stuff the car had. I'm old school, I buy and hold a car for over 10 years. Anyhow I was shocked and told him if he'd save/invest that 9, 000 a year for like 10 years that would be over $90k with interest. Life changer. He finally bought one of the cars he was leasing. Now he lives in a hotel at 60 years old, didn't invest much all those years. He will most likely have to work until he can't anymore, sad.

[sherryr]

I had to replace my old car (totalled). Found a used one I liked, an upgrade year and model of my old one. Hubby thought it was a great price and wanted me to hurry and buy before someone else does. I waited until the price dropped and I offered 10% less. Dealership said no. Waited a few days and emailed the other shift manager…said I noticed it was still unsold, would you accept $$, plus waive all fees. He said yes….I drove away for thousands less. Negotiate and remember, there will be other cars, don’t get vested in one specific car. Get yourself an awesome deal instead.

[ehderguyyashootadeerorno]

A few years ago I took my son and friend's kid fishing. I was driving my 4 year old truck and saw a brand new Trail Boss. I said that's a nice truck I would love to have one. The 8 year old said why don't you buy one, can you afford it? I said I can keep my current truck and pay cash for that Trail Boss. He said then go buy it. I said you can't save money if you buy everything that is shiny.

[bennie]

Hey Ramit! I want you to know that your videos are making impact. I binge watched your videos the first day i came across you on YouTube and my life changed. I was almost $30k in debt. In less than 5 months, I've cut it to less than 20k. On tract to completely be debt free by 2025, God willing. Thank you for sharing your knowledge.

[xsaviour]

My first 3 cars $500, $1000, $3000 . That last car I was earning $50k in year 2005. Ended up buying my first house before buying a brand new car.

[tessa]

I proudly own a 2012 Chevy Malibu. 122k miles. Get’s me from A to B. Yes I do have repairs on it each year but I also enjoy having $672 dollars put into my Roth 403b each month even more!!

[IrisP]

We decided not pay for our only car in full. We put 50% down, got a 2.49% interest rate for 72 months ($520 a month), invested the money that we didn't use, took that money plus other money a year later and used that as a down payment for a second house. Our car payment didn't hold us back. It also didn't stop us from reaching a 7 figure net worth last year. We don't care about depreciation since we are not planning on selling the car.

[aliali-ceyf]

Every Youtuber has been talking about this lately. Answer is simple, just buy a used Toyota - corolla, camry, tundra/tacoma, or sienna - depending on your needs.

Low cost of maintenance. They all can last up to 300k and sometimes beyond. They're comfortable and just work.