For further updates, follow my newsletter: grahamstephan.substack.com/ Here is a link containing the source material for each piece of research cited. I do my best to make my videos as accurate as I can, and the additional resources should help anyone who wants to look into them further - enjoy! docs.google.com/spreadsheets/d/1LgsFZr6DwAgvLdEP_flHVapQV_0ZpIRapK-BnCsYNz0/edit?usp=sharing
hey man, just disable these comments. youtube isn't doing anything about them anytime soon and you have a very impressionable audience, hence why these comments are here in the hundreds of thousands.
I drove the same car from age 20 till around age 30. I did most of my own mechanical work so that helped. I kept that car but got another used daily driver which I drove for another 10 or so years. I replaced that with another used car which I drove for several years before replacing it with another used car. Finally, in my mid 50's I bought my first new car. Paid cash. Now, my wife had two new cars during all of this but she drove them for years and years. And you know what? No one cares. My friends never talk about the cars I used to drive but I often hear "You are so lucky you retired early".
@@MrMlbfan6 Thank you! I wasn't looking for congratulations I was trying to encourage people that they can do the same. I was greatly influenced by the book "Millionaire Next Door". Living way below our means put us on a track to early retirement and yet we really didn't sacrifice much to make it happen. Sure I would have liked to own a new car every couple of years. But in the end it is just stuff and I am happier we traded that stuff for reaching financial FREEDOM sooner. Take care!
This is good advice. As a car enthusiast, I can't help but secretly hate this video, though. The temptation to waste money on nice (but quickly depreciating) cars is real.
It’s not a waste if you’re the kind of car enthusiast that likes cars for the driving experience and not for “status”. Life has to be enjoyed. Sure I could save and invest everything for 30 years and retire a multi millionaire… but then what? Finally go and buy that sports car when you’re 60 and your back hurts? I think one can drive a fun car and still save and invest for retirement. For me, it motivated me to find ways to make more money
Considering the average American spends over an hour a day in their car, I don't see why it's so unreasonable for people to at least want something with a little more comfort and features to it.
I do, we never know how long our life will be. As long as I can afford it with no debts, I'll buy it. Better used & few miles, an S class coupe 63 amg was 200k usd brand new in 2020, now is like 70k
It’s all about the type of car you choose to buy, granted there’s still some luck involved. There’s so many used cars with less impending repairs than new ones rolling off the lot. I’d take a 100k mile reliable model Toyota over a new Kia for instance
@@Johnny-tu6cfexcept the used car market is heavily inflated rn as well. Used cars that have 100k+ mileage and 10+ years old, are going for $10k+! And that’s private sale, not dealership lots
Yeah, I kind of think a lot of these “guidelines” are designed to make people feel bad about themselves. Most people would just be walking because cars cost how much they cost, and a WHOLE LOT of people make less money than it would appear folks want to believe.
@@jacobshank9362yeah agree here. My uncles truck is 9 years old and is worth 3k under what he bought it for. I’m here in the uk and my cars lost 20k in two years 😂. Win some you lose some.
I appreciate you sharing those cars that keep their value. Everyone says spending extra money on a car is a bad move, but driving up a mountain road with the top down is one of my favorite things so it’s hard for me to think of a better use of money. Buying a big fat SUV on credit just to commute to work every day is something else.
I loved driving down twisting mountain roads (hardtop , though) in my Lexus sports sedan before I was rear-ended and it was totaled. But damn, it was the most fun I'd ever had in a car in my entire life. It handled great and pushing it to the limits on Michelin Pilot Sports was an adrenaline rush. Sometimes in life, a purchase doesn't have to make sense, it just has to make you smile.
I like to follow the guides they lay out, while also allowing extra cost for the car to consider it a "fun" purchase. If you take some money from your "wants" category (if you're following something like the 50/30/20 rule), I say it's still justified since it's made to fit into your budget. Everyone's definition of "wants" is different, and if you want a more expensive car, it's perfectly alright if you're willing to pay the extra expense for it.
@@Drew458 100%, although you’ll also want to factor in the extra gas from the trips you’ll be taking. Then again if you are replacing a truck with a little sports car, that will probably take care of itself.
What do you think about buying the cheaper car for day to day driving, and then renting the super car for a fun weekend to get the rush? A Lamborghini isn’t much fun to drive in traffic
@@HalfBlueCat1Yeah, I’m talking about a Miata or an S2000, not a Lamborghini. If that’s what you want, renting is most likely the only option. That is fun too, but tougher to hit the road on the spur of the moment. Also, it’s fun to take other people out in your car and this is easier to do casually if you own it. If you pull up to a date in a rented Lamborghini, it might feel awesome for a second until the inevitable question of “Wow, is this yours?” comes out and you feel like a poser. (Never actually rented a car for this purpose, so I’m just guessing.)
This kind of break down with realistic life examples is so useful and eye opening. Thank you, I really like your videos! It feels like an approachable, fun conversation with a friend who is passionate about finance - and I'm learning so much.
This is not realistic at all though. Good luck finding a good used car under 8k that will not cost you an arm and leg in repairs and maintenance down the road.
I was talking about this yesterday. It is crazy how many spend 50% of a years salary on a car. If people followed these rules, we would all see car prices plummet.
I don't even understand how a person can live, and how the bank approves someone making $60K to get a $50K car. How are they even surviving? Then there's two fairly new cars in the driveway. How?
@@jadduval7778 that's insane. I guess you're still at home with your parents or have roommates so it's not breaking the bank. I hope you're enjoying it.
Been driving my 24 year old $3k car for 10 years and still love it. In the mean time I’ve saved a ton and fixing the car keeps my skills sharp. It’s never left me stranded either.
@@laurad324you can buy a 6-8K car that is reliable if it was taken care of. I have a 2012 Honda Accord. It had 80K miles when I got it a year and a half ago, I've put over 30K miles on it and the only thing I've had to replace is the alternator. $300. Other than that, it's been perfect. Not only that, but it was a rebuilt title car which are typically known for having more problems but you can't even tell it's had major body damage. I spent $5K on it. No regrets.
I’ve been driving my 2007 Honda Accord since I bought it new. 270,000 miles and no payments for the past 13 years. It still runs great, I know all the history, and do all the maintenance myself, including the timing belt. It’s like an old friend now. I make 170k/year and I just don’t have and desire to get a brand new car.
I do all the maintenance on my 2000 toyota tacoma even though I bought it used in cash it still runs great at 120k miles. That mileage is nothing for toyota tho so I don’t see myself getting a new car anytime soon 😂
That proves one of my personal beliefs. You can buy a reasonable,new family car. The trick is to keep it at least 10 years to get good return on investment. No way I'm buying a rust bucket playing the...am I going to make it to work/get fired lottery.
I'm in a similar boat. 2004, been in the family since new(was my mom's). A lot less miles and I do need to pay for maintenance etc, as I'm not even remotely a car person. I've had money in the bank for a new car for almost 10 years now. I'm not going to buy one until this one actually does die, but it pays(sometimes literally) to be prepared. My former landlord have a truck that is 40+ years. Had to patch up some part of the chassis a couple years ago as rust was starting to eat into it. But aside that, it functions perfectly. Well, I think the AC doesn't work, only been in it twice though so not entirely sure.
Amen, brother. I’m right there with you. $1100 a month in transportation is ridiculous. I’d rather spend $125 a month on insurance for my paid off Honda Fit.
I haven't made a car payment since 2007. I'm going to have to agree with Dave R. on this one. Paying cash for used cars and driving them into the dirt for 10-20 years has given me the ability to invest in other opertunities. Even with the cost of repairs and maintenance its far less then I'd pay over time with a new car + insurance etc.
It's because statistically most people have short attention spans and can't watch more than a couple minutes. If he waits to ask for likes at the end then most people would have dropped off by then. Apparently peoples brains are so fried due to internet overstimulation that RUclips estimates half of all viewers drop of usually by the one minute mark. My guess is Graham being a successful RUclipsr is very aware of that fact. Thus the ask from the start.
May i say, your use of the Chapters feature is AMAZING!!! Its honesty so easy to follow along the video for someone who doesn't understand some of these terms and rules. Good job and thank you
i drove a 2004 camry after selling my truck, i remember all of the dirty looks i got and i would go on dates with men who made fun of me for being cheap. My car cost me $2200 cash and I only had to get a muffler ($300 for everything). I am a single woman and I had lost my job, i have no help and I wasn't about to be car poor in a pandemic. Now I own a condo with low interest and a car with low interest thanks to buying it in the pandemic.. It took me a year to save enough money with no car payments. I can go get an audi but why? I plan to pay off my student loans first and reward myself with a nice car afterwards.
I was lucky to get a 02 Toyota Celica for 3k during the pandemic! It has 34k miles and the engines usually last past 300k. I saved myself so much money, it’s also great on gas! A full tank cost around $34 (which my local gas being $3.43/ga) and I usually get 350-400 miles on a full tank :)
This car is rock solid. One of the best car that Toyota made. I had one for almost 17 years. Cheap on gas, cheap to maintains and fun to drive. The best car
Great advice. Just bought a car and glad to know I pass all the tests, especially the Ramsey test. Appreciate most people can’t buy outright but compared to my earnings I think I definitely made the right choice, outright and 20% of my gross wages. I detest monthly payments 🙏
Drive until the wheels fall off” is popular advice. But I’m wondering about the “cost” of no longer having a reliable vehicle and loans to pay . I’m still driving a 2008 Honda CRV with over 210k miles on it that was paid off over 10 years ago. This is why we all need a good IRA . Choosing a Roth IRA is advantageous as it uses after-tax funds and allows tax-free growth. When I retired, I had $3M million saved, and I won't be taxed on my withdrawals.
More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire without any investment. Retirement becomes truly fulfilling when you possess two essential elements: financial resources and a meaningful purpose in life. Make prudent investment choices to secure good returns and ensure a comfortable retirement.
There is no reason for an older car to not be reliable. Maintain the thing properly, and maintenance is NOT just changing the oil once in a while. Address common issues BEFORE they become problems.
@@AnnBurrow-vb8tt I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second daughter. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks...
I usually look up your videos for updates! Our government has no idea how people are suffering these days. I feel for people with disabilities not getting the help they deserve. Thank you PAP(PAMELA ANN PUNKAR), imagine investing $12,000 and received $305,500.
@@MontgomerysMaddens This is where an AI and a licensed adviser comes into the picture. I barely have time to trade myself as my job swallows up most of my time.
I’m debt free including my home, and have plenty to afford new cars in cash. Still driving a 12 year old Honda Fit that I bought new, has about 151k miles on it and runs and looks great still!
When my dad passed away he was watching your videos to get financial education..least I can say thanks for teaching my dad how the world works with money..some old people don't understand till its too late
Great video Graham! Things i wish i knew @ 21, and great non car-nut advice for everyone. The enthusiast portion hits on the spot for me... my daily for the last 18 yrs has been a Datsun 510 which is now worth over triple what i paid for it. Finally went back to a "modern" car last year with a low mileage 2004 s2k on the exact value logic you shared. Cheers!
I took a slightly different approach to this. My daily is a 2004 350z with 235k miles on it, and the other fun car is a C6 corvette I'm into for about 20k
I think your depreciation schedule is a pre-covid relic. If I could find a 5 year old diesel one ton (for my farm) for ~45% of its new value I’d buy one this week.
you see 10 year old nissan sedans (awful transmissions and engines) going for near new prices. As someone who has money to buy a new car and is interested in a bronco, i have a perfectly fine working 10 year old mercedes i got from my grandpa after he passed, and a 40 yr old f150 that has some kinks here and there. That makes it hard to want to take on the debt even if I can afford it and pay it off relatively quickly
You’re a bit off on what Dave says on car ownership. He says that the total value of your vehicles should not exceed 50% of your annual income. So if you’re making $50,000 a year, and you already have a $10,000 car and a $10,000 boat, you can only afford another $5,000 car.
The rule of thumb I go by is as long as I have ~$2500 left for food/fun after tax, 401k, bills and investments I can afford it. The goal for me is usually $500+ week allowance after everything is said and done.
This video is another reminder of the stark economical reality we currently live in. With stagnant wages and increasing inflation and debts, there are little people in this country that can responsively finance a new or used car. We have a median income in the United States of 31k, meaning the average American could realistically buy a 8k car which right now is almost unheard of.
HA really bro 8k car is unheard of? My most expensive car I paid 8k for. Cheapest car I own I bought in February for $500 and it runs and drives fine. Yall ain't trying hard enough.
@@gopro2027 I bought a used Audi A3 for 9k almost five years ago with 100k miles on it and the car still serving its intended purpose. One disclaimer is that I do most of the cost repairs and scheduled maintenance when needed.
@@gopro2027 Last person I knew who bought a car under 1K it only worked for months. I think so markets don't have god cars under a certain amount. Your experience is not everyone elses experience.
Eh, it all depends on perspective. The most important thing is to decide how much you are willing/able to spend on the car every month and work from there. I think the most important thing he talked about in the video is factoring in maintenance and fuel costs, which people seem to forget. For example, in my country (where the average salary is much, much lower than in the USA) it is not uncommon to see young guys buy an old beat up BMW or something similar just because they depreciated enough to the point that you can afford them, and then end up selling them soon after because the maintenance is too expensive. The maintenance on a brand new german luxury car is going to be noticeably higher than a normal (i.e. cheap) car, but is in a lot of cases going to be much much worse when these cars get older, when things actually start going bad. I'm also all for buying the car which you can afford in cash so you don't have to pay a loan check every month, but in the end you are only saving the interest. It's just that people buy more expensive cars than they can realistically afford just because they can get a loan approved on these cars, if you have a stable job (meaning little or no risk that you won't be able to make payments) buying on a loan isn't that bad as long as you buy what you can afford.
Most underrated tip is to learn to diy. If you can do your own maintenance its a hell of a lot cheaper to keep an older car around. Also less bad stuff happens to you because you can judge how severe issues are and act accordingly.
Wow! Thank you so much! I just learned that I can afford a bicycle to get myself to and from work! Looks like I’m about to finally get fit for my New Year’s resolution!
“Drive until the wheels fall off” is popular advice. But I’m wondering about the “cost” of no longer having a reliable vehicle. I’m still driving a 2008 Honda CRV with over 210k miles on it that was paid off over 10 years ago. I keep up on all maintenance (preventative and otherwise) and it’s been my intention to keep it as long as possible given the tough market for used cars. But the maintenance costs every year aren’t far off from the cost of buying another vehicle and the stress of not having a reliable vehicle wears on your psyche. At least that’s been my experience. It’s hard to know when to take the jump 🤷♀️ I don’t hear many folks give this topic too much attention but the stress is real.
Yeah people talk about beaters being cheap but if your car keeps breaking down/is in the shop, and you end up missing work enough, then your job is at risk. People getting fired because they can't show up reliably enough due to their cheap transportation.
Get a Toyota, they’re known to average twice that mileage with proper maintenance and are relatively cheap to maintain compred to other brands. There are even some examples of Tundras used as work trucks and reaching over a million miles while still running strong.
One of the best things I did was go to auto school. I didn't end up being a mechanic but i've saved thousands in auto repairs by doing the repairs myself. I would highly advise everyone to at least learn how to do their own oil changes. You too girls!
Have almost the same experience based on high auto automotive class. It has not only paid off in thousands on auto repair but also in 10s of thousands on home repairs. Oil changes, brakes, shocks, every kind of fluid change, diesel emissions, ball joints, tune ups, the list goes on and on. It’s a foundation for so many other repairs. Several appliance repairs, confidence in remodeling a kitchen for 10k that would have cost 30-40, replacing windows and the list goes on. I try to do almost everything myself. The satisfaction of completing the project is an added benefit to money saved.
New cars are making it almost impossible to work on them yourself. They're even pushing out mechanics. They are trying to force everyone into the dealership ecosystem.
Wish I could change my own oil - I just bought a new car and don't want Jiffy Lube to mess it up! But I live in an apartment complex where they're extremely anal about not allowing ANY car maintenance (not even car washes!) in the parking lot or the carports.
Unfortunately the percentage breakdown is really darn tricky to stick to. Where I'm located, a person is very lucky to find a road-legal vehicle for less than 8k and the vast majority of my town makes less than 45k/year.
In my opinion, these rules don't work very well for the "lower" end of the spectrum in terms of income. I think they work on anything $65k+, but it's harder to use on less than that. It's especially hard since the pandemic nearly doubled the price of a decent used car. I think making it fit into an overall budget is an extremely important factor.
@@HalfBlueCat1 Buses in my area are only for seniors & people with disabilties and my family has a couple bikes which are used for shorter trips regularely between May-October.
if you live up north, seriously consider a trip south to buy a car. you can get something 10 years old and better condition than the rotten piles you have up there
I agree 100% with your process and approach. I am 45 and based on the math I'd be looking at a car in the $8k-$9k range. The problem is finding a car in that price range. There are not a lot of them and when you do find them, they are 10-15 years old and have 100k miles or more. I am thinking that reliability may be a concern.
Your best point, especially with today's economy in mind, is to finance as little as possible and buy what you can afford. It sounds like your potential return is greater when you can buy select, nicer cars like you do, but the philosophy applies equally either way.
Most of these rules don’t work in today’s financial markets in the uk as the second hand car prices are way above the norm and wages lagging behind inflation.
Same in US this is pie in the sky for most. A cheap reliable used car here is 17-20k low end for a reliable low mileage car that will last you 8+ years. I have a lot of experience recently with this.
I'm in Tokyo. Trains are wonderful! And no car needed. The amount of money I save by not owning a vehicle is absolutely astronomical. As you said, there is the cost of the car itself (not to mention interest rates). Then there's payment of ZERO on insurance, taxes, maintenance, gas, parking and speeding tickets, possibility of collision and the thing getting keyed, robbed, etc. Finally, and probably the worst of it: Depreciation. Without a car means you can actually save your cash.
Americans who tout the "freedom" of the "open road" don't realize how much good public transit would ultimately save them money, forgetful of all the associated costs of the privilege to be stuck in traffic like everyone else. I'd rather not own a car for a routine commute if I can help it, and I say this as someone who's been licensed from everything that's road-legal between motorcycles to combat trucks.
@@doujinflipmost of us freedom loving Americans don't live in areas where public transit is realistic. The ones that live around those areas are the ones who dislike freedom.
depends on what your goals are. If you care what you are driving, but the car. If you saved the difference between the new car and the old car, over 30 years is a lot of money.
The keyword I noted was "reliable." Saving longer to put down more on a reliable car is worth it as a cheap car that breaks down all the time is extremely expensive. Been there, done that, never again. Last time I financed for two years longer than I would have liked to get a payment I could afford and it was worth it. It's paid off now and still running great.
I watched this.. I was going to buy a 2023 amg gt 63s coupe(200k+).. now I will be buying a 20k car. I do not need to impress I am young and will be investing for my future generations ahead. Thank you for opening my eyes
Hey Graham, the first car I bought cost 600 dollars. It was a1974 Malibu Classic with about 60,000 miles on it. I drove it for an additional 200,000 miles before it started messing up.
This is spot on. There is NO WAY you can buy new cars unless you make over $100k. Quit falling for it thinking you need a new car. Older cars are often cheaper and more reliable as well
As someone who briefly worked at a car dealership, I will never purchase a used car again. I’ll take the original warranty and put all the miles on it and damage myself. Some of the stuff they let out the door knowing it was messed up infuriated me.
@@evandavis2362if everyone stops buying new cars then the used maker falls off a cliff like the pandemic where used gets to be just as expensive as new
What if someone never owns a car? Could Graham do a video on the economics of public transportation, taxis, ubers, and asking people for a ride vs. the economics of car ownership? Which is the better deal?
I live in a small town and work from home but still have to have a car cause anything but the nearest store is 5-30 miles away. I have this image in my head that people that live in big cities are close to everything and just don’t need a car.
"what's up Graham, it's guys here" - not sure if that was intentional, but i liked the comedic relief if so. Love your videos, and they're super helpful. Keep it up for all of us!
Over the last 20ish years, I’ve spent less on all of my vehicles combined than most people pay for just one. I’ve only ever bought used cars with cash, paid in full at the moment that I drove away with it. Combine that with repairs done at home, in the driveway, except for a few large issues (like a blown transmission), and my vehicle costs are nonexistent. One car (jeep Cherokee) got to 470k miles and only cost about $4k. Buying only the car you can afford with cash is fantastic advice, especially if it’s combined with “learn to fix it yourself.”
My biggest problem with today's autos is the lack of reliability, not being inclined to peek under the hood out of object fear, the warranty gives me the peace of mind I want and can afford.
I've never heard 20/3/8. But I just personally liked never financing more than 48 months, and just making sure the payment I have is manageable. If the car is unmanageable more than 48 months, then I felt the car is out of my budget. Some of these rules saying only buying a $5k to $10k car seems unrealistic. My rule is buy for longevity. Our two Sedans I owned for almost 20 years. Our SUV is approaching 10.
Only time I went for a 72 month was when I was offered 2.9% financing on a USED car. My car payment for a two year old Acura with low mileage for about $300/mo. That was back in 2013. Best deal I ever made on a car. You can't get anything close to what I got now for less than $800/mo now.
@@mikeydude750 It completely depends on what your fixed living expenses are and how much you are willing to blow on a depreciating asset. If you live in California, $150k isn't much anymore. Probably can't afford more than a condo.
If your car is also your main hobby or 1st passion (or only interest) than of course it makes sense to splurge a little more on it. I have mostly driven relatively “plain Jane” older used cars, because fancy cars have not been a priority for me. That is one of the reasons I have been able to afford to own other “toy” like airplanes, ski boat etc, etc. I still have an old Z-3 in mint condition and a ragged, much older Jeep Wrangler. I drive, and enjoy, the beat, Wrangler 10 times more often than the Z-3. “Each to their own” but I think the point of a video like this is that with cars in particular, it is very easy to get into that who “keeping up with the jones” or impressing the neighbors which is or can be foolish for your finances.
People are not following those numbers. Less than 10% earn $125k a year, yet the average new car price is close to $50k. I have always paid in hard cash for every vehicle and held them for over ten years.
We have plenty of money. I drive a 21 year old VW with 255k on the odometer. Insurance is nothing, never breaks down, gets great mileage, doesn't have all the connected garbage that new cars have. It's a stick, too. Going to run it til it falls apart, and enjoy the ride. It's funny to think that I might never get to experience a car this old again in my life, but I have kind of enjoyed seeing the little things that change over time...the little customizations and repairs of things like aging plastic that make it uniquely mine. I have even gotten to design and 3D print custom parts for it two or three times now. There is zero reason for me to get a new car, there isn't anything on the market which could replace my car. They are literally worse in every way that actually matters for practicality except horsepower. Old cars rock. And heck yeah, we always pay cash. I am over 40 and have never had a car payment, never had a new car. Will never. There are far more important things in life to spend that much money on... like a motorcycle. 😂
@Fernando-yx5li This is actually not true, at least not of cars made when mine was. It used to be true, back when I was little, but there have been cars with air bags and good crash ratings for quite a long time now. I love Volvos. They have always done safety well, and they usually have good moderately-sized hatchbacks in their lineup.
@@Daekar3 true they've been around for a couple decades but a new car is still safer. Better airbags, rear view Camera, blind spot monitors, stops automatically if a crash is imminent, better rollover protection
As someone who's been close to being debt free and only invest I'm curious to see what you have to say because I've been struggling not to impulse buy my dream car. But knowing if I could statically afford it would be nice to see anyway.
Take the cost of your dream car and put that number into a retirement calculator. Figure a 10% return on stocks and see how much that car will really cost you after 20 years.
Here's another way to look at it: If you're a car guy, then it's OK that you also spend 'fun/leisure' budget on your car payments. If you just need a means of transportation, then stick to those rules.
"Afford" is such a subjective/vague term. Some people get more enjoyment and live more fulfilling lives by spending their money in their 20s/30s rather than saving it till their 50s/60s. Your going to get a hell of a lot more enjoyment spending 50k when your 20 vs spending 250k when your 50.
@@mihai5085well, yeah. Figured that was pretty obvious. If you have a lot of money you have a lot more say about what your future looks like. Not many options when you spend all your money as soon as you get it. No there’s no guarantee I’ll live past 30 but statistically it’s a lot smarter to assume I will than I won’t.
@@V1NTAGEBuRRit0 I agree with your point to some extent. I personally think it's the best choice to spread the leftover money in a way that you are saving for the future, but also living your present. Investing 30% or 40% for your retirement and 70% or 60% to be used right now (in my opinion). I assumed that you are putting every leftover money into your retirement from your comment, maybe i was wrong.
I also bought a Lotus Elise. Kept it for 10 years and sold it for $5K more than I paid. It's really absurd the way the world works. A poor person struggles with transportation, while I got to buy a really fun sports car and drive it around basically for free. I don't think it should be this way.
I had a Citroen C1 for 17 years (I was hit and it’s totaled) but mileage and depreciation were great 👍 (my phone has a higher depreciation than that car😂) Great rule!
Solid advice and very articulate! So many comments with excuses why logical advice doesn't work for them. You could lead horses to the best water on earth, but can't make them drink it. There are of coarse exceptions, but most people "get ahead" through self desipline and delayed gratification.
$65k a year in the Midwest, and I drive a $1500 Impreza wagon beater that I do 90% of the maintenance on myself. PLPD+comp insurance is about $75 a month. I have saved SO much money and this car has always started and gotten me where I need to go. I bought a house at 23 this year and that was a huge reason it was possible.
Thanks a lot for contributing to the ever growing appreciation of the s2000.. Now I'll never be able to afford another one 😭 Ramsey's method to purchase cars with cash is how you build wealth. Never give away your future income for a depreciating asset.
I had an Integra Type R with only 24,000 miles on it. I traded it in for a E46 M3. The Integra shot up in value. The M3 is starting to go up. I can still sell it for the amount that I paid for it over 16 years ago. I have close to 80,000 miles on the car. It mostly sits in the garage now.
I personally live by the 499 rule. That’s putting whatever it takes towards a down payment and getting the right term and rate on the loan to back into a 499/mo. For a new 50-60k suv even if that’s half down and a 5-6 yr loan (using pre rate hike rates) it’s been a good sweet spot to get lease-like payments and enjoy the vehicle without viewing it as a burden each month regardless of how often you drive it. Kind of a more stress free ownership experience and you’ll find yourself enjoying the vehicle more.
Yea but you gotta come up with 30k to put down. Idk how much you make a year but that's alot of money that most people don't have. If that works for you great but for most people that wouldn't work. Unless they are buying a 20k car or something
I’m 42 and I’ve financed one car in my life. It was my first one. I also do all my own maintenance and repairs (other than insurance covered collision repairs) After that I decided I was never paying interest on anything ever again. Now, I do have a mortgage, but I’m kicking around some ideas with that too. Currently I own two cars and four motorcycles. My wife also has a jeep. All owned outright. I work for a defense contractor and my income isn’t crazy high, but isn’t crazy low either. Our house is 3439 sqft. You can do this too. Just takes three things most aren’t into, time, effort, and discipline.
Dave Ramsey is the most infuriating individual ever. He insults people for having one cent of debt while he himself has filed for bankruptcy multiple times.
That's why I tune in. Want to hear from someone who's made the mistakes. He's now worth multiple millions and is in no danger of bankruptcy anymore than I can see.
Yep. I make close to $250K and love my little Mazda. Would much rather invest into my beautiful land and home, take my wife on vacation, or travel to see friends. It’s crazy to see kids these days making $60K and buying $90K cars (or worse tbh). Especially considering their usually poor credit scores and the insane interest rates being charged on car loans. Too many are unable to resist the temptation to flex an artificial lifestyle. Literally most of my employees drive nicer cars than I do, and so many of them are just trapping themselves into a lifetime of debt.
I'm an aspiring trader who would rather learn from other traders' experience than investing in the market myself, in anticipation of the next bull run. What are your thoughts on copy trading as well? Do individuals actually earn a living? Just trying to get some reassurance. I want to have a healthy portfolio worth at least $850,000. Reliable inputs please.
I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $130k in passive diversified safe-haven assets, Up 358k so far and pretty sure I'm ready for whatever comes.
"Rebecca Nassar Dunne" is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thanks for sharing. I searched for her full name, found her website immediately, reviewed her credentials, and did my due diligence before reaching out to her.
Hey Graham I love your videos! I am a 20-year-old college student (without dept) and thinking about ordering a 2024 Ford Maverick hybrid paying in full. Right now the markups on them are insane, being 8k+. Would this benefit Maverick's depreciation if I order it at MSRP or should I instead focus my savings on a cheaper used vehicle to have more money to put down on retail later. I understand that usually for my age it would be wise to purchase a cheap used car, but with that comes the risk of repairs, fuel efficiency, and (not-so-great used car deals).🚙😃
i def wouldn't buy that as a good investment, personally i'd get something that's reliable and cheaper like a civic or corolla... if you just need reliable transportation, that is.
If you can afford to pay in cash buy any car you want, just remember to factor in the how much that car is going to cost you in fuel, maintenance etc into your finances
idk, where I live there are winters and salt on the road. you are lucky to see cars that are 15-20 year old without rust holes in them, older ones for sure have structural damage and should not be on the road. for my own personal safety and well being I bought a brand new car and plan to drive it 6-10 years and sell it before any serious rust repair needs to be performed and probably will buy new again after that. of course, I blew past any of these rules, but even given the gas price where I live and the amount of miles I do I'd blow past those percentages driving literlly anything with an ICE. but the peace of mind is worth it for me. I also do in the range of 15-20k miles a year and live in a rural area, so I need my car to work, I can't really afford it going for repairs too often and be without a car. and spending so much time in the car I want to be comfortable as well. these rules work well if you live somewhere with hot/mild climate where winter is not a thing and you don't know what snow is. and you live somewhere with decent public transport options for the inevitable breakdown you will get on a car that's aging.
The problem is that loans are based on gross income, not net. Being older now, you never want a loan based on your gross income, especially if you dont make much. You can get into trouble real quick.
Rule number 1: A car is something that helps you go from one place to another. Your first car should be reliable, easy to be fixed, easy to find parts, and easy to do maintenance. If you have money to buy a second car, then you can do whatever you want.
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Here is a link containing the source material for each piece of research cited. I do my best to make my videos as accurate as I can, and the additional resources should help anyone who wants to look into them further - enjoy! docs.google.com/spreadsheets/d/1LgsFZr6DwAgvLdEP_flHVapQV_0ZpIRapK-BnCsYNz0/edit?usp=sharing
Sure
"What's up graham its guys here" was this a mistake or was it on purpose?
This video isn’t popping up in my feed probably why the views are low.
hey man, just disable these comments. youtube isn't doing anything about them anytime soon and you have a very impressionable audience, hence why these comments are here in the hundreds of thousands.
These comments are awful graham 😞
I drove the same car from age 20 till around age 30. I did most of my own mechanical work so that helped. I kept that car but got another used daily driver which I drove for another 10 or so years. I replaced that with another used car which I drove for several years before replacing it with another used car. Finally, in my mid 50's I bought my first new car. Paid cash. Now, my wife had two new cars during all of this but she drove them for years and years. And you know what? No one cares. My friends never talk about the cars I used to drive but I often hear "You are so lucky you retired early".
Congrats man, that's the way to do it!
Pin his comment Graham
not being a wage slave, should be the goal in life... eveything else is just distractions.
@@MrMlbfan6 Thank you! I wasn't looking for congratulations I was trying to encourage people that they can do the same. I was greatly influenced by the book "Millionaire Next Door". Living way below our means put us on a track to early retirement and yet we really didn't sacrifice much to make it happen. Sure I would have liked to own a new car every couple of years. But in the end it is just stuff and I am happier we traded that stuff for reaching financial FREEDOM sooner. Take care!
Agree
This is good advice. As a car enthusiast, I can't help but secretly hate this video, though. The temptation to waste money on nice (but quickly depreciating) cars is real.
It’s not a waste if you’re the kind of car enthusiast that likes cars for the driving experience and not for “status”. Life has to be enjoyed. Sure I could save and invest everything for 30 years and retire a multi millionaire… but then what? Finally go and buy that sports car when you’re 60 and your back hurts?
I think one can drive a fun car and still save and invest for retirement. For me, it motivated me to find ways to make more money
Considering the average American spends over an hour a day in their car, I don't see why it's so unreasonable for people to at least want something with a little more comfort and features to it.
@@ROVA00nailed it
If you grow out of doing that, you will have a much more stable financial future. And less fun.
I do, we never know how long our life will be. As long as I can afford it with no debts, I'll buy it. Better used & few miles, an S class coupe 63 amg was 200k usd brand new in 2020, now is like 70k
well done Graham! thanks for the shout!
Absolutely!! :)
Are you guys gonna colab anytime soon?
He's Guys, we're Graham
I make $50,000 and drive a $7,000 Toyota 🤓
Great job Humper
Thank you! Just sold my used car and put half of it towards a different used car. It's broken now and costs more to fix than its worth.
It’s all about the type of car you choose to buy, granted there’s still some luck involved. There’s so many used cars with less impending repairs than new ones rolling off the lot. I’d take a 100k mile reliable model Toyota over a new Kia for instance
I'm sure fixing it is still cheaper than buying a new used one.
I'd take a 250k mile diesel Avensis over any of the shite cars,new. No contest
I spend my cars' worth each year keeping it running. Its not worth much, but a few hundred dollars a month is a LOT less than a new car.
why did you sell your car to begin with??
What your saying is 75% of people should never be buying a vehicle.
Well 75% shouldn't be buying new there's nothing wrong with a reliable second hand vehicle:)
@@Johnny-tu6cfexcept the used car market is heavily inflated rn as well. Used cars that have 100k+ mileage and 10+ years old, are going for $10k+! And that’s private sale, not dealership lots
Yeah, I kind of think a lot of these “guidelines” are designed to make people feel bad about themselves. Most people would just be walking because cars cost how much they cost, and a WHOLE LOT of people make less money than it would appear folks want to believe.
@@jacobshank9362they have come down alot in the last 12 months
@@jacobshank9362yeah agree here. My uncles truck is 9 years old and is worth 3k under what he bought it for. I’m here in the uk and my cars lost 20k in two years 😂. Win some you lose some.
I appreciate you sharing those cars that keep their value. Everyone says spending extra money on a car is a bad move, but driving up a mountain road with the top down is one of my favorite things so it’s hard for me to think of a better use of money.
Buying a big fat SUV on credit just to commute to work every day is something else.
I loved driving down twisting mountain roads (hardtop , though) in my Lexus sports sedan before I was rear-ended and it was totaled. But damn, it was the most fun I'd ever had in a car in my entire life. It handled great and pushing it to the limits on Michelin Pilot Sports was an adrenaline rush. Sometimes in life, a purchase doesn't have to make sense, it just has to make you smile.
I like to follow the guides they lay out, while also allowing extra cost for the car to consider it a "fun" purchase. If you take some money from your "wants" category (if you're following something like the 50/30/20 rule), I say it's still justified since it's made to fit into your budget. Everyone's definition of "wants" is different, and if you want a more expensive car, it's perfectly alright if you're willing to pay the extra expense for it.
@@Drew458 100%, although you’ll also want to factor in the extra gas from the trips you’ll be taking. Then again if you are replacing a truck with a little sports car, that will probably take care of itself.
What do you think about buying the cheaper car for day to day driving, and then renting the super car for a fun weekend to get the rush? A Lamborghini isn’t much fun to drive in traffic
@@HalfBlueCat1Yeah, I’m talking about a Miata or an S2000, not a Lamborghini. If that’s what you want, renting is most likely the only option. That is fun too, but tougher to hit the road on the spur of the moment. Also, it’s fun to take other people out in your car and this is easier to do casually if you own it. If you pull up to a date in a rented Lamborghini, it might feel awesome for a second until the inevitable question of “Wow, is this yours?” comes out and you feel like a poser. (Never actually rented a car for this purpose, so I’m just guessing.)
This kind of break down with realistic life examples is so useful and eye opening. Thank you, I really like your videos! It feels like an approachable, fun conversation with a friend who is passionate about finance - and I'm learning so much.
This is not realistic at all though. Good luck finding a good used car under 8k that will not cost you an arm and leg in repairs and maintenance down the road.
@@corail53 Couldn't someone just pay a third party to inspect the used car before making the purchase?
@@corail53bro you can’t even find a completely gutted shell with no engine for 4k these days lmao
I was talking about this yesterday. It is crazy how many spend 50% of a years salary on a car. If people followed these rules, we would all see car prices plummet.
That's exactly what I'm always saying about that!
I don't even understand how a person can live, and how the bank approves someone making $60K to get a $50K car. How are they even surviving? Then there's two fairly new cars in the driveway. How?
@@LordPrometheous The key to get wealthy is to not follow the mass!
@@LordPrometheous that’s exactly what I did I bought a e43 AMG for 43k and I make 60k and I’m 18…. Getting a loan is so easy nowadays
@@jadduval7778 that's insane. I guess you're still at home with your parents or have roommates so it's not breaking the bank. I hope you're enjoying it.
Been driving my 24 year old $3k car for 10 years and still love it. In the mean time I’ve saved a ton and fixing the car keeps my skills sharp. It’s never left me stranded either.
Is it the Forester in the pfp? Those cars are amazing. Just wish I can find a stick shift one at a reasonable price.
the tax for manuals these days is crazy @@LetUsDrownIn
Most people can’t fix car
Ok so I buy a 6-8k car that breaks all the time.
@@laurad324you can buy a 6-8K car that is reliable if it was taken care of. I have a 2012 Honda Accord. It had 80K miles when I got it a year and a half ago, I've put over 30K miles on it and the only thing I've had to replace is the alternator. $300. Other than that, it's been perfect. Not only that, but it was a rebuilt title car which are typically known for having more problems but you can't even tell it's had major body damage. I spent $5K on it. No regrets.
I’ve been driving my 2007 Honda Accord since I bought it new. 270,000 miles and no payments for the past 13 years. It still runs great, I know all the history, and do all the maintenance myself, including the timing belt. It’s like an old friend now. I make 170k/year and I just don’t have and desire to get a brand new car.
I do all the maintenance on my 2000 toyota tacoma even though I bought it used in cash it still runs great at 120k miles. That mileage is nothing for toyota tho so I don’t see myself getting a new car anytime soon 😂
That proves one of my personal beliefs. You can buy a reasonable,new family car. The trick is to keep it at least 10 years to get good return on investment. No way I'm buying a rust bucket playing the...am I going to make it to work/get fired lottery.
I'm in a similar boat. 2004, been in the family since new(was my mom's). A lot less miles and I do need to pay for maintenance etc, as I'm not even remotely a car person.
I've had money in the bank for a new car for almost 10 years now. I'm not going to buy one until this one actually does die, but it pays(sometimes literally) to be prepared.
My former landlord have a truck that is 40+ years. Had to patch up some part of the chassis a couple years ago as rust was starting to eat into it. But aside that, it functions perfectly. Well, I think the AC doesn't work, only been in it twice though so not entirely sure.
but you must have more than one vehicle am I right?
Amen, brother. I’m right there with you. $1100 a month in transportation is ridiculous. I’d rather spend $125 a month on insurance for my paid off Honda Fit.
I haven't made a car payment since 2007. I'm going to have to agree with Dave R. on this one. Paying cash for used cars and driving them into the dirt for 10-20 years has given me the ability to invest in other opertunities. Even with the cost of repairs and maintenance its far less then I'd pay over time with a new car + insurance etc.
my family hold Mr. Steve Banks in high esteem because of the $ 21,000 weekly profit we're receiving trading with his strategies
wow!! I thought I was the only beneficiary of Mr. Stephen Banks trading services. His techniques and strategies are the best
Lmao @ these bots in the comments
Well some people have higher standards in life and don’t want to drive a round a beater 😂
@@Kinja_then save up and buy in cash
Telling me to like a video before I've seen it, is like a server asking for a tip before they take my order...
“And now let’s begin”😂
And at counter-server places they do exactly that!
It's because statistically most people have short attention spans and can't watch more than a couple minutes. If he waits to ask for likes at the end then most people would have dropped off by then. Apparently peoples brains are so fried due to internet overstimulation that RUclips estimates half of all viewers drop of usually by the one minute mark. My guess is Graham being a successful RUclipsr is very aware of that fact. Thus the ask from the start.
That's the American way. It's assumed you WILL give a tip. In a restaurant or diner you'll get chased down and abused if you don't.
@@rodrigosanroman5858 if people do not finish watching the video then there's no damn point of clicking the like button in the first place.
Super helpful man! Going into my 20's kinda scared about financial advise, but your videos are very insightful!
May i say, your use of the Chapters feature is AMAZING!!!
Its honesty so easy to follow along the video for someone who doesn't understand some of these terms and rules.
Good job and thank you
i drove a 2004 camry after selling my truck, i remember all of the dirty looks i got and i would go on dates with men who made fun of me for being cheap. My car cost me $2200 cash and I only had to get a muffler ($300 for everything). I am a single woman and I had lost my job, i have no help and I wasn't about to be car poor in a pandemic. Now I own a condo with low interest and a car with low interest thanks to buying it in the pandemic.. It took me a year to save enough money with no car payments. I can go get an audi but why? I plan to pay off my student loans first and reward myself with a nice car afterwards.
Keep it up
Someone has been listening to Dave Ramsay.
Don't buy an Audi. They have fooled people with marketing, the cars are junk and expensive to repair.
Hope you’ve reached your goal by now!
I own an Audi. Pass on them and buy a bmw or Porsche.
I was lucky to get a 02 Toyota Celica for 3k during the pandemic! It has 34k miles and the engines usually last past 300k. I saved myself so much money, it’s also great on gas! A full tank cost around $34 (which my local gas being $3.43/ga) and I usually get 350-400 miles on a full tank :)
Wow a Celica that old with that low of mileage is crazy! Solid buy
Wow that's rare
Change oil
My first car was a 1995 Toyota Celica and that thing died in 2016 with well over 300k miles on it.
Best car on the planet.
This car is rock solid. One of the best car that Toyota made. I had one for almost 17 years. Cheap on gas, cheap to maintains and fun to drive. The best car
Good find.
Great advice. Just bought a car and glad to know I pass all the tests, especially the Ramsey test. Appreciate most people can’t buy outright but compared to my earnings I think I definitely made the right choice, outright and 20% of my gross wages. I detest monthly payments 🙏
@Bradleyschaeffer376 How do you get to work?
honestly with how expensive car ownership is, going car-free is a really good idea for a lot of people
"You will own nothing and be happy" is hitting faster and harder than I thought...
If you're privileged enough to live somewhere where car-freedom is a viable option, absolutely.
True
@@DanielM.-mq4rmits been going on since before the meme ask 40% of millenials who are still living like genzs
@@DanielM.-mq4rmif you don’t own a car that’s a lot more money to own other things goofball
Drive until the wheels fall off” is popular advice. But I’m wondering about the “cost” of no longer having a reliable vehicle and loans to pay . I’m still driving a 2008 Honda CRV with over 210k miles on it that was paid off over 10 years ago. This is why we all need a good IRA . Choosing a Roth IRA is advantageous as it uses after-tax funds and allows tax-free growth. When I retired, I had $3M million saved, and I won't be taxed on my withdrawals.
More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire without any investment. Retirement becomes truly fulfilling when you possess two essential elements: financial resources and a meaningful purpose in life. Make prudent investment choices to secure good returns and ensure a comfortable retirement.
There is no reason for an older car to not be reliable. Maintain the thing properly, and maintenance is NOT just changing the oil once in a while. Address common issues BEFORE they become problems.
@@AnnBurrow-vb8tt I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second daughter. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks...
I usually look up your videos for updates! Our government has no idea how people are suffering these days. I feel for people with disabilities not getting the help they deserve. Thank you PAP(PAMELA ANN PUNKAR), imagine investing $12,000 and received $305,500.
@@MontgomerysMaddens This is where an AI and a licensed adviser comes into the picture. I barely have time to trade myself as my job swallows up most of my time.
I’m debt free including my home, and have plenty to afford new cars in cash. Still driving a 12 year old Honda Fit that I bought new, has about 151k miles on it and runs and looks great still!
lmaoo im 18 in 15k ""debt"" and i drive a E43 AMG
@@jadduval7778😂
@@jadduval7778sell it pay off debt and buy a older e63 that will hold its value
Why you buy a e43 fake amg? Get a 63...
@@user-xw4vg1vy5e I can’t afford that lmao
When my dad passed away he was watching your videos to get financial education..least I can say thanks for teaching my dad how the world works with money..some old people don't understand till its too late
Great video Graham! Things i wish i knew @ 21, and great non car-nut advice for everyone.
The enthusiast portion hits on the spot for me... my daily for the last 18 yrs has been a Datsun 510 which is now worth over triple what i paid for it. Finally went back to a "modern" car last year with a low mileage 2004 s2k on the exact value logic you shared. Cheers!
I took a slightly different approach to this. My daily is a 2004 350z with 235k miles on it, and the other fun car is a C6 corvette I'm into for about 20k
a low mileage 2004 s2k 😩😩😩 you must have paid a fortune for that
I think your depreciation schedule is a pre-covid relic. If I could find a 5 year old diesel one ton (for my farm) for ~45% of its new value I’d buy one this week.
Preach!
you see 10 year old nissan sedans (awful transmissions and engines) going for near new prices. As someone who has money to buy a new car and is interested in a bronco, i have a perfectly fine working 10 year old mercedes i got from my grandpa after he passed, and a 40 yr old f150 that has some kinks here and there. That makes it hard to want to take on the debt even if I can afford it and pay it off relatively quickly
You’re a bit off on what Dave says on car ownership. He says that the total value of your vehicles should not exceed 50% of your annual income. So if you’re making $50,000 a year, and you already have a $10,000 car and a $10,000 boat, you can only afford another $5,000 car.
Also, don’t buy a new car unless you’re a millionaire.
The rule of thumb I go by is as long as I have ~$2500 left for food/fun after tax, 401k, bills and investments I can afford it. The goal for me is usually $500+ week allowance after everything is said and done.
This video is another reminder of the stark economical reality we currently live in. With stagnant wages and increasing inflation and debts, there are little people in this country that can responsively finance a new or used car. We have a median income in the United States of 31k, meaning the average American could realistically buy a 8k car which right now is almost unheard of.
Yeah it sounds like it takes months to find good cars for cheap...
agreed. I believe these car buying rules are outdated.
HA really bro 8k car is unheard of? My most expensive car I paid 8k for. Cheapest car I own I bought in February for $500 and it runs and drives fine. Yall ain't trying hard enough.
@@gopro2027 I bought a used Audi A3 for 9k almost five years ago with 100k miles on it and the car still serving its intended purpose. One disclaimer is that I do most of the cost repairs and scheduled maintenance when needed.
@@gopro2027 Last person I knew who bought a car under 1K it only worked for months. I think so markets don't have god cars under a certain amount. Your experience is not everyone elses experience.
Really glad you included the Ramsey approach. Been on that for over a decade and love that I actually have money!
Eh, it all depends on perspective. The most important thing is to decide how much you are willing/able to spend on the car every month and work from there. I think the most important thing he talked about in the video is factoring in maintenance and fuel costs, which people seem to forget. For example, in my country (where the average salary is much, much lower than in the USA) it is not uncommon to see young guys buy an old beat up BMW or something similar just because they depreciated enough to the point that you can afford them, and then end up selling them soon after because the maintenance is too expensive. The maintenance on a brand new german luxury car is going to be noticeably higher than a normal (i.e. cheap) car, but is in a lot of cases going to be much much worse when these cars get older, when things actually start going bad. I'm also all for buying the car which you can afford in cash so you don't have to pay a loan check every month, but in the end you are only saving the interest. It's just that people buy more expensive cars than they can realistically afford just because they can get a loan approved on these cars, if you have a stable job (meaning little or no risk that you won't be able to make payments) buying on a loan isn't that bad as long as you buy what you can afford.
Most underrated tip is to learn to diy. If you can do your own maintenance its a hell of a lot cheaper to keep an older car around. Also less bad stuff happens to you because you can judge how severe issues are and act accordingly.
And there’s the peace of mind knowing you did the work and guaranteed that the repair was done.
THIS. It feels amazing knowing you saved hundreds or even thousands of dollars doing the work yourself and you know it was done right
Wow! Thank you so much! I just learned that I can afford a bicycle to get myself to and from work! Looks like I’m about to finally get fit for my New Year’s resolution!
I use 100/0/1 rule. NEVER borrow money for a car, and NEVER buy a new car... ~3yrs old used, only with LOW miles.
“Drive until the wheels fall off” is popular advice. But I’m wondering about the “cost” of no longer having a reliable vehicle. I’m still driving a 2008 Honda CRV with over 210k miles on it that was paid off over 10 years ago. I keep up on all maintenance (preventative and otherwise) and it’s been my intention to keep it as long as possible given the tough market for used cars. But the maintenance costs every year aren’t far off from the cost of buying another vehicle and the stress of not having a reliable vehicle wears on your psyche. At least that’s been my experience. It’s hard to know when to take the jump 🤷♀️ I don’t hear many folks give this topic too much attention but the stress is real.
Take in fuel efficiency aswell. Gas aint getting cheaper
I had my mechanic just tell me it was better to get rid of my old car because problems just kept popping up.
its time to say goodbye.
Yeah people talk about beaters being cheap but if your car keeps breaking down/is in the shop, and you end up missing work enough, then your job is at risk. People getting fired because they can't show up reliably enough due to their cheap transportation.
Get a Toyota, they’re known to average twice that mileage with proper maintenance and are relatively cheap to maintain compred to other brands. There are even some examples of Tundras used as work trucks and reaching over a million miles while still running strong.
One of the best things I did was go to auto school. I didn't end up being a mechanic but i've saved thousands in auto repairs by doing the repairs myself. I would highly advise everyone to at least learn how to do their own oil changes. You too girls!
Have almost the same experience based on high auto automotive class. It has not only paid off in thousands on auto repair but also in 10s of thousands on home repairs. Oil changes, brakes, shocks, every kind of fluid change, diesel emissions, ball joints, tune ups, the list goes on and on. It’s a foundation for so many other repairs. Several appliance repairs, confidence in remodeling a kitchen for 10k that would have cost 30-40, replacing windows and the list goes on. I try to do almost everything myself. The satisfaction of completing the project is an added benefit to money saved.
New cars are making it almost impossible to work on them yourself. They're even pushing out mechanics. They are trying to force everyone into the dealership ecosystem.
Wish I could change my own oil - I just bought a new car and don't want Jiffy Lube to mess it up! But I live in an apartment complex where they're extremely anal about not allowing ANY car maintenance (not even car washes!) in the parking lot or the carports.
Unfortunately the percentage breakdown is really darn tricky to stick to. Where I'm located, a person is very lucky to find a road-legal vehicle for less than 8k and the vast majority of my town makes less than 45k/year.
Yeah, it's pretty much impossible to stick to especially when you consider most people are living paycheck to paycheck nowadays
In my opinion, these rules don't work very well for the "lower" end of the spectrum in terms of income. I think they work on anything $65k+, but it's harder to use on less than that. It's especially hard since the pandemic nearly doubled the price of a decent used car. I think making it fit into an overall budget is an extremely important factor.
Get a bike or a bus pass
@@HalfBlueCat1 Buses in my area are only for seniors & people with disabilties and my family has a couple bikes which are used for shorter trips regularely between May-October.
if you live up north, seriously consider a trip south to buy a car. you can get something 10 years old and better condition than the rotten piles you have up there
I agree 100% with your process and approach. I am 45 and based on the math I'd be looking at a car in the $8k-$9k range. The problem is finding a car in that price range. There are not a lot of them and when you do find them, they are 10-15 years old and have 100k miles or more. I am thinking that reliability may be a concern.
protip: buy a cheap car outright and keep it for 10 years. it's worked for me.
Your best point, especially with today's economy in mind, is to finance as little as possible and buy what you can afford. It sounds like your potential return is greater when you can buy select, nicer cars like you do, but the philosophy applies equally either way.
Most of these rules don’t work in today’s financial markets in the uk as the second hand car prices are way above the norm and wages lagging behind inflation.
They also don't work in America either
Yea, in America you’ll be hard pressed to find a car that even runs for $10,000 or less. Let alone a good car that’s gunna run for 10 more years
Same in US this is pie in the sky for most. A cheap reliable used car here is 17-20k low end for a reliable low mileage car that will last you 8+ years. I have a lot of experience recently with this.
@@Jeremyhull-mx3lrAt least in America insurance isn't 2x the price of the card
In the UK you can buy a Aygo/C1/108(107) that is cheaper to run and reliable…
I'm in Tokyo. Trains are wonderful! And no car needed. The amount of money I save by not owning a vehicle is absolutely astronomical. As you said, there is the cost of the car itself (not to mention interest rates). Then there's payment of ZERO on insurance, taxes, maintenance, gas, parking and speeding tickets, possibility of collision and the thing getting keyed, robbed, etc. Finally, and probably the worst of it: Depreciation. Without a car means you can actually save your cash.
Americans who tout the "freedom" of the "open road" don't realize how much good public transit would ultimately save them money, forgetful of all the associated costs of the privilege to be stuck in traffic like everyone else. I'd rather not own a car for a routine commute if I can help it, and I say this as someone who's been licensed from everything that's road-legal between motorcycles to combat trucks.
@@doujinflipmost of us freedom loving Americans don't live in areas where public transit is realistic. The ones that live around those areas are the ones who dislike freedom.
Im to ADHD to be waiting for trains all the time
I love that this is the first time that addressing financial responsibility has acknowledged being a car enthusiast as well, very well done
"making $125,000/year you can't afford a new honda civic, and making $200,000/year you can afford to splurge on a brand new Camry"
Thats ridiculous
Your yearly income is irrelevant if you spend more than you make.
If you can buy it cash it doesn't matter what your salary is
depends on what your goals are. If you care what you are driving, but the car. If you saved the difference between the new car and the old car, over 30 years is a lot of money.
Agreed.
Your spelling is 'ridiculous'
The keyword I noted was "reliable." Saving longer to put down more on a reliable car is worth it as a cheap car that breaks down all the time is extremely expensive. Been there, done that, never again. Last time I financed for two years longer than I would have liked to get a payment I could afford and it was worth it. It's paid off now and still running great.
"What's Up Graham, its GUYS here" strikes AGAIN! 🤣
Great videos man!
These are some of the most useful types of videos on RUclips. This is paid course level material.
Lol no it is not. It is the bare minimun any parents MUST learn their kids when they are going into their teens.. It is mandatory knowledge!
I watched this.. I was going to buy a 2023 amg gt 63s coupe(200k+).. now I will be buying a 20k car. I do not need to impress I am young and will be investing for my future generations ahead. Thank you for opening my eyes
The older Boxsters are great picks. I bought one with high miles, added 13k miles in a year, and then sold it a year later for a $500 overall loss.
Hey Graham, the first car I bought cost 600 dollars. It was a1974 Malibu Classic with about 60,000 miles on it. I drove it for an additional 200,000 miles before it started messing up.
and you could sell it for more than that today, inflation and price hiking is out the ass
I bet you bought it in 1980 lol
This is spot on. There is NO WAY you can buy new cars unless you make over $100k. Quit falling for it thinking you need a new car. Older cars are often cheaper and more reliable as well
It’s not about income. Don’t buy a new car unless you’re a millionaire (net worth)
i just bought a new car for 18k after my trade in, MSRP was 25K
2023 Mazda CX-30
What if your getting a tesla 2023 15k off standard range. 8K DOWN MMMMmmmmm
As someone who briefly worked at a car dealership, I will never purchase a used car again. I’ll take the original warranty and put all the miles on it and damage myself. Some of the stuff they let out the door knowing it was messed up infuriated me.
@@evandavis2362if everyone stops buying new cars then the used maker falls off a cliff like the pandemic where used gets to be just as expensive as new
What if someone never owns a car? Could Graham do a video on the economics of public transportation, taxis, ubers, and asking people for a ride vs. the economics of car ownership? Which is the better deal?
It’s cheaper to buy a reliable daily car then use Uber by far
It’s Just more upfront, think about it u spend 30$ a day on Uber you end up spending 10,950$ on Uber by the end of the year…
Depends where you work or need to goto most often. Also the cost of deliveries like groceries, medical etc
I live in a small town and work from home but still have to have a car cause anything but the nearest store is 5-30 miles away.
I have this image in my head that people that live in big cities are close to everything and just don’t need a car.
I agree. Consider New York city, Chicago or LA. Very few ppl own cars
Absolutely beautiful seeing the GT behind you as you talk
"what's up Graham, it's guys here" - not sure if that was intentional, but i liked the comedic relief if so. Love your videos, and they're super helpful. Keep it up for all of us!
Over the last 20ish years, I’ve spent less on all of my vehicles combined than most people pay for just one. I’ve only ever bought used cars with cash, paid in full at the moment that I drove away with it. Combine that with repairs done at home, in the driveway, except for a few large issues (like a blown transmission), and my vehicle costs are nonexistent. One car (jeep Cherokee) got to 470k miles and only cost about $4k. Buying only the car you can afford with cash is fantastic advice, especially if it’s combined with “learn to fix it yourself.”
Great video Graham. You are so helpful to so many of us learning how to manage our money
I live in Canada. I pay $4,000 / year in insurance for a $30,000, and gas is the equivalent to $8.00/ gallon ($2.xx / litre). Love that lol
My biggest problem with today's autos is the lack of reliability, not being inclined to peek under the hood out of object fear, the warranty gives me the peace of mind I want and can afford.
Don't pay dealer markups ever... Find a dealer that doesn't charge them. It's not difficult.
I've never heard 20/3/8. But I just personally liked never financing more than 48 months, and just making sure the payment I have is manageable. If the car is unmanageable more than 48 months, then I felt the car is out of my budget.
Some of these rules saying only buying a $5k to $10k car seems unrealistic. My rule is buy for longevity. Our two Sedans I owned for almost 20 years. Our SUV is approaching 10.
Only time I went for a 72 month was when I was offered 2.9% financing on a USED car. My car payment for a two year old Acura with low mileage for about $300/mo. That was back in 2013. Best deal I ever made on a car. You can't get anything close to what I got now for less than $800/mo now.
Laughing at the implication that someone making 150k a year can only afford a 45k car, that's insane.
@@mikeydude750 It completely depends on what your fixed living expenses are and how much you are willing to blow on a depreciating asset. If you live in California, $150k isn't much anymore. Probably can't afford more than a condo.
@@mikeydude750 to me I think it all about the monthly payment no the total price of the car
@@mikeydude750 Exactly. Pretty much everyone I know driving Audis makes less then 100k a year. They make it work just fine.
A car will not make you a millionaire, but a car will probably be the thing that keeps you from becoming a millionaire.
There are also people who actually enjoy cars 😂😂😂
...there are also idiots who laugh at that...
If your car is also your main hobby or 1st passion (or only interest) than of course it makes sense to splurge a little more on it. I have mostly driven relatively “plain Jane” older used cars, because fancy cars have not been a priority for me. That is one of the reasons I have been able to afford to own other “toy” like airplanes, ski boat etc, etc. I still have an old Z-3 in mint condition and a ragged, much older Jeep Wrangler. I drive, and enjoy, the beat, Wrangler 10 times more often than the Z-3. “Each to their own” but I think the point of a video like this is that with cars in particular, it is very easy to get into that who “keeping up with the jones” or impressing the neighbors which is or can be foolish for your finances.
If you enjoy a car more than being financially healthy then go for it. But dont whine when you're broke in your 50s still
And people who drive 30k miles a year in them, it's good to have a "nicer", reliable car when you spend that much time in them.
@@kmonsoon13 thats fine. Then still, buy something you can afford. 30k miles a year isnt an excuse to buy a 60k car on a 50k a year salary
People are not following those numbers. Less than 10% earn $125k a year, yet the average new car price is close to $50k. I have always paid in hard cash for every vehicle and held them for over ten years.
Buy used, do your own maintenance, pay it off as soon as possible.
You had me at Ford GT!!!
Woohoo!
You had me at big titties!
We have plenty of money. I drive a 21 year old VW with 255k on the odometer. Insurance is nothing, never breaks down, gets great mileage, doesn't have all the connected garbage that new cars have. It's a stick, too. Going to run it til it falls apart, and enjoy the ride. It's funny to think that I might never get to experience a car this old again in my life, but I have kind of enjoyed seeing the little things that change over time...the little customizations and repairs of things like aging plastic that make it uniquely mine. I have even gotten to design and 3D print custom parts for it two or three times now.
There is zero reason for me to get a new car, there isn't anything on the market which could replace my car. They are literally worse in every way that actually matters for practicality except horsepower.
Old cars rock. And heck yeah, we always pay cash. I am over 40 and have never had a car payment, never had a new car. Will never. There are far more important things in life to spend that much money on... like a motorcycle. 😂
Thing is , driving a way older car is a lot more dangerous if you're in a collision. I finance a newer volvo and it works for me
@Fernando-yx5li This is actually not true, at least not of cars made when mine was. It used to be true, back when I was little, but there have been cars with air bags and good crash ratings for quite a long time now.
I love Volvos. They have always done safety well, and they usually have good moderately-sized hatchbacks in their lineup.
@Daekar3 you're more likely to die in a steel car, though, because of the lack of crumple zones and it doesn't absorb the collision as well
@Fernando-yx5li Right... that was a concern decades ago, but not now. Crumble zones have been around for ages.
@@Daekar3 true they've been around for a couple decades but a new car is still safer. Better airbags, rear view Camera, blind spot monitors, stops automatically if a crash is imminent, better rollover protection
As someone who's been close to being debt free and only invest I'm curious to see what you have to say because I've been struggling not to impulse buy my dream car. But knowing if I could statically afford it would be nice to see anyway.
Take the cost of your dream car and put that number into a retirement calculator. Figure a 10% return on stocks and see how much that car will really cost you after 20 years.
what’s the car?
@@DEMONISHING BMW i8
Do it!
@@mocheen4837 did you?
Here's another way to look at it:
If you're a car guy, then it's OK that you also spend 'fun/leisure' budget on your car payments.
If you just need a means of transportation, then stick to those rules.
"Afford" is such a subjective/vague term. Some people get more enjoyment and live more fulfilling lives by spending their money in their 20s/30s rather than saving it till their 50s/60s. Your going to get a hell of a lot more enjoyment spending 50k when your 20 vs spending 250k when your 50.
That’s also subjective. I’d much rather retire comfortably than spend frivolously in my 20s and not have certainty about my future
@@V1NTAGEBuRRit0 What gives you the guarantee you are going to live over 30? Having certainty about the future means having a big fat bank account?
@@mihai5085well, yeah. Figured that was pretty obvious. If you have a lot of money you have a lot more say about what your future looks like. Not many options when you spend all your money as soon as you get it. No there’s no guarantee I’ll live past 30 but statistically it’s a lot smarter to assume I will than I won’t.
@@V1NTAGEBuRRit0 I agree with your point to some extent. I personally think it's the best choice to spread the leftover money in a way that you are saving for the future, but also living your present. Investing 30% or 40% for your retirement and 70% or 60% to be used right now (in my opinion). I assumed that you are putting every leftover money into your retirement from your comment, maybe i was wrong.
@@V1NTAGEBuRRit0 and what happens if you died tonight ? You saved all that for what?
You finally found a real comment. RUclips needs to stop these bots my god.
I also bought a Lotus Elise. Kept it for 10 years and sold it for $5K more than I paid. It's really absurd the way the world works. A poor person struggles with transportation, while I got to buy a really fun sports car and drive it around basically for free. I don't think it should be this way.
Its the devil's world it's ment to be this way till we change for each other glad you have that perspective though allot of people with money don't.
Graham I now respect you even more as an automotive editor/enthusiast. Very smart and tasteful vehicle choices (except the Tesla).
I go by the rule of, "if you are worried about depreciation or mileage you can't afford the car."
I had a Citroen C1 for 17 years (I was hit and it’s totaled) but mileage and depreciation were great 👍
(my phone has a higher depreciation than that car😂)
Great rule!
Most people buying more car than they can afford don’t give a crap about either of those things and they’re broke af! 🤣🤣
This is EXTREMELY helpful! Can we talk interest rates next? 😊
love your videos! Been working on my credit since I saw your “credit card for beginners” video couple years ago and I’ve gotten up to 750 recently!
Great work!
Solid advice and very articulate! So many comments with excuses why logical advice doesn't work for them. You could lead horses to the best water on earth, but can't make them drink it. There are of coarse exceptions, but most people "get ahead" through self desipline and delayed gratification.
$65k a year in the Midwest, and I drive a $1500 Impreza wagon beater that I do 90% of the maintenance on myself. PLPD+comp insurance is about $75 a month. I have saved SO much money and this car has always started and gotten me where I need to go. I bought a house at 23 this year and that was a huge reason it was possible.
Dang here in the South I get full coverage for $105 a month. I never realized it varied so much.
@@fredgilbert2032 part of it is that I'm 24 :)
@@jasonbinney2979 yeah that'll do it for sure 🤣
Thanks a lot for contributing to the ever growing appreciation of the s2000.. Now I'll never be able to afford another one 😭
Ramsey's method to purchase cars with cash is how you build wealth. Never give away your future income for a depreciating asset.
I had an Integra Type R with only 24,000 miles on it. I traded it in for a E46 M3. The Integra shot up in value. The M3 is starting to go up. I can still sell it for the amount that I paid for it over 16 years ago. I have close to 80,000 miles on the car. It mostly sits in the garage now.
“What’s up Graham, it’s guys here!”
How’d I not notice that 😂
Go work -> Go save money -> buy a used car that you can afford with his formular. Thats it! Credit financing is a trap
This is just the motivation I needed to bring myself to buy a cheap and reliable Camry
Excellent advise to those who never learned the value of money or basic economics
I’ve seen 84 month auto loans starting to surface. Everyone should watch this before making their next car purchase!
Crazy how long people are taking loans for!
Looks like all I can get is a E scooter
:(
I personally live by the 499 rule. That’s putting whatever it takes towards a down payment and getting the right term and rate on the loan to back into a 499/mo. For a new 50-60k suv even if that’s half down and a 5-6 yr loan (using pre rate hike rates) it’s been a good sweet spot to get lease-like payments and enjoy the vehicle without viewing it as a burden each month regardless of how often you drive it. Kind of a more stress free ownership experience and you’ll find yourself enjoying the vehicle more.
Yea but you gotta come up with 30k to put down. Idk how much you make a year but that's alot of money that most people don't have. If that works for you great but for most people that wouldn't work. Unless they are buying a 20k car or something
I like how you mentioned the car guy perspective on the old "cars always depreciate" trope.
I’m 42 and I’ve financed one car in my life. It was my first one. I also do all my own maintenance and repairs (other than insurance covered collision repairs) After that I decided I was never paying interest on anything ever again. Now, I do have a mortgage, but I’m kicking around some ideas with that too. Currently I own two cars and four motorcycles. My wife also has a jeep. All owned outright. I work for a defense contractor and my income isn’t crazy high, but isn’t crazy low either. Our house is 3439 sqft. You can do this too. Just takes three things most aren’t into, time, effort, and discipline.
Here I am. 30,000 a year
According to this video you can buy a used bicycle….as long as you do your own maintenance 😂
2000 $ car for you buddy
Dave Ramsey is the most infuriating individual ever. He insults people for having one cent of debt while he himself has filed for bankruptcy multiple times.
That's why I tune in. Want to hear from someone who's made the mistakes. He's now worth multiple millions and is in no danger of bankruptcy anymore than I can see.
I don’t even like or follow Dave Ramsey but there’s a few ways to get it right, there’s many more to get it wrong.
My favorite part about this video is that you just told me I can barely afford an $8k car while sitting in front of a Ford GT
My brother in law just bought a new Silverado. He's on the 0/7/30 plan.
I've been pulling down $150K for a decade, I just bought a $14,500 used Chevy Bolt
Yep. I make close to $250K and love my little Mazda. Would much rather invest into my beautiful land and home, take my wife on vacation, or travel to see friends.
It’s crazy to see kids these days making $60K and buying $90K cars (or worse tbh). Especially considering their usually poor credit scores and the insane interest rates being charged on car loans.
Too many are unable to resist the temptation to flex an artificial lifestyle. Literally most of my employees drive nicer cars than I do, and so many of them are just trapping themselves into a lifetime of debt.
I'm an aspiring trader who would rather learn from other traders' experience than investing in the market myself, in anticipation of the next bull run. What are your thoughts on copy trading as well? Do individuals actually earn a living? Just trying to get some reassurance. I want to have a healthy portfolio worth at least $850,000. Reliable inputs please.
I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $130k in passive diversified safe-haven assets, Up 358k so far and pretty sure I'm ready for whatever comes.
please can you give me more info. i really need it
"Rebecca Nassar Dunne" is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thanks for sharing. I searched for her full name, found her website immediately, reviewed her credentials, and did my due diligence before reaching out to her.
Why does everyone who talks about finance like this sound like an npc?
Hey Graham I love your videos! I am a 20-year-old college student (without dept) and thinking about ordering a 2024 Ford Maverick hybrid paying in full. Right now the markups on them are insane, being 8k+. Would this benefit Maverick's depreciation if I order it at MSRP or should I instead focus my savings on a cheaper used vehicle to have more money to put down on retail later. I understand that usually for my age it would be wise to purchase a cheap used car, but with that comes the risk of repairs, fuel efficiency, and (not-so-great used car deals).🚙😃
Don't buy it bro
Get something used, do your research, and know what to look for when purchasing a new car.
i def wouldn't buy that as a good investment, personally i'd get something that's reliable and cheaper like a civic or corolla... if you just need reliable transportation, that is.
How about paying cash?
If you can afford to pay in cash buy any car you want, just remember to factor in the how much that car is going to cost you in fuel, maintenance etc into your finances
Your first line you said “ whats up graham its guys here…” threw me off for a second. I had to rewind a few times 😂
damn, i didn't know the bagger at the grocery store with the late model BMW was making $200k.
a car's purpose to get you from point A to point B
nothing more nothing less
Right.... and clothes are only to keep our privates private
Not true 😆
@@kurtl6126 hey if you want to overspend just to show off to mostly strangers that don't care about you, go right ahead
@@thespanishwhiteboard tell me what else it is for
Have you ever taken a car to the track? They can be a lot of fun too! That said, I would not take my 'point A to B' car to the track :)
Nobody on earth talks with their hands this much to a point where it’s distracting from the video
You’ve never met an Italian
Yeahhhhh 4:27 , my insurance alone is $500 🙃
idk, where I live there are winters and salt on the road. you are lucky to see cars that are 15-20 year old without rust holes in them, older ones for sure have structural damage and should not be on the road. for my own personal safety and well being I bought a brand new car and plan to drive it 6-10 years and sell it before any serious rust repair needs to be performed and probably will buy new again after that. of course, I blew past any of these rules, but even given the gas price where I live and the amount of miles I do I'd blow past those percentages driving literlly anything with an ICE. but the peace of mind is worth it for me. I also do in the range of 15-20k miles a year and live in a rural area, so I need my car to work, I can't really afford it going for repairs too often and be without a car. and spending so much time in the car I want to be comfortable as well. these rules work well if you live somewhere with hot/mild climate where winter is not a thing and you don't know what snow is. and you live somewhere with decent public transport options for the inevitable breakdown you will get on a car that's aging.
I also live in an area like that, I recommend applying a rust proofing undercoat like woolwax or fluidfilm, it will allow the car to last much longer.
The problem is that loans are based on gross income, not net. Being older now, you never want a loan based on your gross income, especially if you dont make much. You can get into trouble real quick.
Rule number 1: A car is something that helps you go from one place to another. Your first car should be reliable, easy to be fixed, easy to find parts, and easy to do maintenance. If you have money to buy a second car, then you can do whatever you want.
What about people who live in apartments who only have space for one car then?