- Today we're going to talk about how to keep
America's favorite status symbol from stealing your future.
(upbeat music)
All right, the reality is, cars are expensive.
And listen, the normal way of thinking
is that you just go get a car loan
because there's no way you could save up
and pay cash for a car.
In fact, 44% of American's carry a car loan around.
Now, the average car payment is $545 a month.
Ah!
But it's costing you even more than that.
So, in this episode, we're going to talk all about cars.
I'm going to tell you the truth about car loans,
share some inspiring stories of people just like you
paying off their car loans,
and I'm going to go visit a mechanic
who's going to give us all the secrets
to actually saving money on your car repairs.
But first, let's talk about one of the biggest ways
to put money back in your pocket.
Look, I get it.
Cars are a status symbol in our world today.
People look at your car and just assume
they know everything about you.
And you might see someone drive this really nice car
and you just assume that they have a lot of money.
But the truth is, most people do not own their cars.
No. They are paying the bank, not themselves.
And in my personal, humble, wise opinion,
a car loan is honestly, probably the dumbest type of debt
that you can get into.
Because look, just look at the math.
You're taking out a loan and paying interest on something
that is going down in value.
So, mathematically speaking, this is not smart.
So, let's just look at the reality of car payments today.
Okay, it's a lot of numbers, but stay with me.
The average car payment is $545 over 69 months.
So, almost six years of paying $545 every single month.
I just keep thinking about how many pairs of shoes
I could buy with that much money, you guys. It's insane!
And then, on top of that, your car loses 25% of its value
the instant you drive it off the lot
if you buy a brand-new car.
Now here's where the math really gets you.
The average total car loan is $31,722.
Now, by the time you finally pay off that car
six years later,
you've actually paid $37,605 in car payments,
now on something that's worth $10,000.
Yes, because your car goes
down in value over those six years.
So, when you look at it, it's just crazy.
Now, on the other hand,
what would it look like if you paid cash for a car
and you invested that car payment
instead of paying it to the bank?
So, if you invested $545 a month
with the average annual rate of return of 10–12%,
in about 30 years you would have $1.4 million.
Yeah, I hope you like the car.
I mean, I heard that and I was like,
"Oh my gosh, that is insane— over a million dollars."
That is what your car payments are costing you.
So do not cripple your future with a car payment.
You can pay for a car in cash.
People do it every single day.
And guess who's about to do it?
(piano music)
That's right—baby number three.
We're changing cars.
And I'm about to buy a car,
and I don't think I've ever been this excited, you guys.
Because I've had a change of heart.
For so long I said I would never drive this type of car.
I said, "No, no, no.
I'm going to be cool mom.
I'm not going to drive this certain type of car."
Now, pregnant, two kids later,
lifting that dang car seat up in an SUV for four years,
I thought to heck with that.
Bring on the minivan.
That's right, the Cruzes are getting a minivan.
I am so excited.
Can I just tell you, when we knew we wanted to upgrade cars,
I wanted bucket seats.
I had the things in my head that I wanted.
And Winston was like, "Babe, we should look at a minivan."
And I was like, "No, Winston. We're so much cooler
than a minivan. No."
So then I go online and I build out this
cool Suburban.
Okay, well that cost basically the price of a house
after I finished it all online.
And I was like, oh my gosh, that's so expensive.
I was like well, I'm just going to go on Toyota.com
and look up the Sienna and just build one online.
I started building this thing, you guys.
I had no idea that minivans were this amazing.
I mean, I knew like the automatic doors,
but even like the cup holders
you could turn on warm or cold depending on your drink.
I mean, all of sunroofs that you can have,
all of the DVD players.
I mean, there is a vacuum— a vacuum built into the van!
I mean, I was absolutely sold.
And then the price of this minivan that I built online
was a third of the dang Suburban.
I was like, I could buy three of these amazing minivans
for one Suburban.
I thought, "Babe, we are a minivan family."
So, we're about to go test drive,
and we're about to go buy my dream car.
And I'm so excited,
I really am—minivans are just amazing.
And here's the deal.
I said, this got me over the hump of the minivan purchase.
Because I was like, this is my five-year car.
When baby boy turns five and he goes to kindergarten,
mama's going back to an SUV.
But for five years—for five years—
I get to press a button and my doors open.
Uh huh, bring it on.
Bring it on minivan.
So excited.
And you better believe that, yes,
we are paying cash for the minivan.
Now, if you're out there and
you're going car shopping just like we are,
and you don't want to get a lemon,
make sure to click the link in the show notes
for our used car checklist
to make sure you get a great used car.
Because, listen, saving up for a car, it takes time.
I get it. I know. We're doing it.
But you can do this, I promise.
And if you still don't believe me,
that car payments are just, you know,
it's just a way of life.
Listen, if you do not believe
that you can pay cash for a car,
here are a couple of stories of people just like you
from my Facebook community
that paid off all of their car loans. And it's amazing.
Lydia said, "Yes, we paid off these two car loans
18 months early and no longer have car payments.
Now we can use that money to tackle
our last two chunks of debt, and then we will be debt free.
I can't imagine how awesome that will feel
because just having our cars paid off is super rewarding."
Megan said, "The Dave Ramsey plan has given us
the cup of reality that we needed to hear
after we got married and I love it.
Maybe I can't splurge and go shopping or eat out,
but it's worth it once we see the debt fly out the window."
I love it.
See guys, they're doing it. You can do it.
And just think about how much money
that they're going to have back in their pockets
now that they do not have a car payment.
I mean, how amazing would that be if that was you.
Now, another way to put money back in your pocket
is to use one our Endorsed Local Providers.
Okay, these are independent agents
who shop current rates on all types of insurance for you,
and ones that you might be overspending in,
like car insurance.
Finding an ELP can save you $700 in 12 minutes.
So make sure to click the link in the show notes
to start saving today.
All right, coming up next, I'm trading in my heels
for a pair of flats and heading to the mechanic.
That's right.
Yes, he's going to give us all the secrets
on how to save money on car repairs.
All right, so there are some surprising ways
that you can save money when you are
doing repairs on your cars.
So I brought an expert mechanic, Cody, here.
And we are here at your shop, Cody.
- Yeah.
- Thanks for letting us barge in.
- Absolutely.
- I know, this is so fun.
Okay, there's really five main places you can fix your car:
dealership, mechanic, tire store, auto repair shop,
- Yep.
- and your house.
- Yeah.
- So, I want to walk through each of these,
going from the most expensive,
which we know is the dealership.
I don't know much about cars, Cody,
so you're going to teach me a lot.
- Yeah, let's do it.
- But I do know the dealership is the most expensive.
So, why would you need to take your car to the dealership?
- I would say any time you've got something
that's within the manufacturer's recommended warranty period.
- [Rachel] Okay.
- You know, sometimes that's 36,000 miles to 60,000 miles.
Or if there's some type of a safety recall,
often times, those repairs are free.
No charge to customer.
- Yeah, yeah, yeah.
Because dealerships really are—they're expensive, right,
when you've got to take it there?
- Yeah, absolutely.
- So you want to avoid that if you can.
- Yeah.
- Next would be a mechanic. - Right, right.
- Where you actually go—like yourself—
to a professional to help fix your car.
So when would you for sure want to go to a mechanic?
- Everybody's range of what they feel comfortable with
is different.
- [Rachel] Yeah.
- Oil changes—
a lot of people think that oil changes can be . . .
you know, they can do them at home and save money.
- [Rachel] Yeah.
- By the time you buy the oil, you dispose of the oil,
you're really not any further ahead.
- Because the average oil change is like—
- $35, you know sometimes you'll find a special $29.99
or $19.99.
- Totally, so you may save five bucks here or there.
But the hassle—just having someone do it,
without all the tools is great.
- Right, right, absolutely.
- Okay, and like electrical issues and stuff with cars.
- Electrical stuff, check engine light issues.
- [Rachel] Yeah.
- When it takes some specific diagnostic equipment
and knowledge is when you might need a mechanic.
- Okay, perfect.
Next, kind of a step down from that I guess,
is a tire store.
You can go to a tire store, obviously get new tires there.
- Right.
- But they'll actually do other services for you
for free sometimes, right?
- Right, a lot of tire stores take care of slow leaks,
a nail in a tire, something like that.
- [Rachel] Yeah.
- Most of your big chain tire stores
do free rotation, balance, you know
for the lifetime of your tires.
- Oh, yes.
Okay, how often do I need to get my tires rotated?
- Recommended is every other oil change.
- Okay.
- Like 6,000 miles to 8,000 or 10,000 miles.
- Okay, get tires rotated.
- Take advantage of it.
- Yeah that's so good, so good.
Okay and auto part stores,
which are kind of separate.
Like Advance Auto Parts, all that—I see those around.
So why would you go to somewhere like that?
- Again, they do a lot of free services too,
like testing batteries, alternators, starters.
And they will actually install batteries for free.
- Oh, seriously?
- A lot of light bulbs they'll install for free.
Stuff like that.
- So would you recommend, like a light bulb,
that's a great example,
like go buy it at the auto parts store?
- They'll sell it to you and
a lot of times they'll install it and everything.
- Yes, so nice.
All the tiers, you guys, of ways to save money.
You don't just have to take it to the dealership.
Think through it all.
And last but not least, the cheapest way is your home.
Things you can do at home . . . I'm fascinated by this, Cody.
So you've got to teach me.
So, what are things that you can do at home?
- I mean, again, it's whatever you feel comfortable with.
- [Rachel] Yes, yeah.
- You know, watch some videos online,
and if you feel like tackling it,
and as long as you've got the tools,
and just make sure you use a jack and jack stand.
You know and you're working safely around your car,
if you're getting underneath it and stuff like that.
- Yeah for sure.
Some of the things my husband is huge on—
he changed our oil for awhile—
but then the convenience aspect . . .
- [Cody] Yeah.
- He was like, I'm just going to take it in.
Because he's literally like, I think I'm saving five bucks.
- [Cody] Right, right.
- But changing our air filter and our windshield wipers.
- Yes.
- Cruzes, we do this at home.
I cannot attest that I do this, Cody. He does.
- Yeah.
- But those are two great things to do at home,
would you say?
- Yeah, yeah. Oh yeah.
For sure.
And again, you might want to teach a child.
A child that's never been exposed to working on something.
- [Rachel] Yeah.
- They may enjoy changing the oil and stuff like that.
- So an air filter.
So changing an air filter, pretty easy.
- [Cody] Pretty straightforward.
This one is really easy to get to.
Every one's going to be different.
You know, look at your owner's manual—it usually tells
in there exactly where it's at.
They just all come apart differently.
Some have screws, some little clips.
- Okay, I'm going to ask a really . . .
Cars—I don't know cars.
So, when you see a box like this, is this for sure—
this is the air filter?
- [Cody] Not necessarily.
- [Rachel] Oh.
You've got several different—
- Compartments. - Resonators.
- But when you lift it up . . .
- Yeah, inside is the air filter.
- Oh, that's it, okay.
- You've got the clean side that goes towards the engine, and
the dirty side. What I usually do—
the easiest way—is to put it up to the sun.
If you can see light through it, it's okay—
it's still fine.
If you can't see light through it,
then it should be replaced.
- How often should you replace it?
- Every 15,000 to 20,000 miles maybe,
or as it gets dirty.
- Okay, and this is something you can just order off Amazon
or get at an auto parts store?
- You can get it on Amazon.
Just make sure you order the right one.
- [Rachel] Yeah, okay.
- Local parts store . . . Amazon's a little cheaper.
- And it just slides right in.
- Slides in.
- Beautiful.
- Make sure it's clipped back in properly.
- So nice. Easy enough.
Okay, and then windshield wipers—easy one to fix.
- Yep.
- So, I say easy to fix, but you're
going to prove to me it's easy.
- Yeah, they're easy.
So this one, every one is different.
Again, read the directions, watch a video online.
But this one just pops up. This pops up.
Obviously be careful lifting that up.
This thing is spring loaded.
If you let it go, you've got to replace your windshield.
It'll shatter that really easy.
- [Rachel] Okay.
- It just pops out.
- [Rachel] Click it in, just like a little lever.
- Slides back in just like that.
- [Rachel] Easy enough and that costs what,
if you did that at home?
- I mean if you did that at home, the wipers—
you can get them online probably
for $5 or $6 a piece.
- Yeah, versus a dealership.
- Yeah, a dealership would probably charge
$20 or $30 a piece for each wiper.
- Oh my gosh, so good.
Cody, you're awesome.
- Thank you, you guys are awesome.
- Thanks for showing us how to save money with our cars.
We can all do it, so thanks.
- Absolutely, anytime.
(upbeat music)
- All right, wasn't Cody so helpful?
Seriously, I love his tips and tricks.
They were so great.
All right, you need your money working for you
and not against you.
And one of the best ways for your money to work for you
is by making sure you have term life insurance.
Term life insurance is very inexpensive.
You can secure your family's future
for a fraction of what it costs to get whole life insurance.
Actually, over half the population thinks
term life insurance costs
three times more than it really does.
And it's something that will actually
take care of your family,
unlike that $500 a month car payment.
Winston and I use and trust Zander Insurance.
Zander makes things super easy.
They walk with you through every step of the process,
shop all the top carriers to find you the best rates,
and make sure you're getting exactly
what you need for your family.
They'll give you a huge piece of mind
for such a small amount of money.
To find out for yourself, go to zander.com
and get a quote today.
All right, hope you all feel empowered because I do.
I really hope that you see it is possible
to live life without a car payment,
and how this one decision could literally change your life.
Thank you again for my guest for coming on today.
And thank you guys for watching this episode.
And if you haven't yet,
make sure to subscribe to my podcast
and you'll get even more teaching on this
and all kinds of money topics.
And as always, be sure to take control of your money
and create a life you love.