- Cars can be the best,
they can also be the worst,
and as you're in the process of getting out of debt,
some people are like, okay, should I sell my car?
Now, there's a few rule of thumbs
if you have debt on your car.
If you cannot pay your car off in 18 months,
you got too much car.
Get outta here. Sell it. Get rid of it.
And if you have debt on multiple vehicles
and that combined debt total is worth more
than half of your annual income,
get it out of here.
You have too much car.
And it's so interesting,
I talk to people and they're like,
yeah, you know, I make $60,000,
and I have a car loan, you know, that's $35,000.
And I'm like, no, too much car, you have too much.
But another problem when it comes to selling my car,
it's not just the debt portion,
but it's the idea of, okay, maybe I have a beater.
Maybe you've been driving an old, old used car
and it keeps breaking down, and you're like,
okay, I need to sell it to get rid of it.
How do I know if I should sell it or keep fixing it?
And this is a tough one,
but when you think about it, simple math,
let's say that you look up your car on Kelley Blue Book,
and it's worth $5,000.
And if it needs repairs
and you go to a mechanic and they said,
yeah, it's gonna cost you $1,000.
If you go back on Kelley Blue Book
and put in your car as if it's been repaired,
and your car's worth $6,500,
well then it's worth it.
It's worth putting in $1,000
because you're gonna recoup that plus a little bit more.
So, go ahead, fix it, and then sell it.
But if you look to say, okay, my car is worth $5,000.
It's going to cost $2,000 to repair,
and it's only going to bump it up to $5,500,
then yeah, it's not worth fixing.
So just go ahead and sell it in the condition it's in,
get the money, and buy something else.
Now, something else you have to factor in is
if this is like the car that you use
to get to and from work and it breaks down constantly,
and it's just a major headache over time,
then that's one time you just say,
you know what, it's probably worth it just to, again,
go through that process,
which is selling it no matter what
to replace it with a better car.
Because if it keeps breaking down, that's no fun.
Because the deal is, you can buy a great, reliable used car.
They are out there.
Thank you.
Nissan, thank you.
Honda, thank you.
Toyota, I mean, the list goes on and on.
So there are cars out there that you can get
at a really inexpensive price point to say,
okay, I'm gonna pay cash and do it.
Because again, cars, we need them.
I mean, most of us, unless you live like in New York City,
probably don't have one,
but those of us that have to drive places,
car, it's one of the four walls.
Transportation is something that you have to depend on
to get to work, to make money,
to take your kids places, to buy food,
I mean, all of it.
So, the car conversation is a big one,
but I want you to do it wisely.
Again, we talk all the time about getting out of debt,
especially the car loan,
because you're paying interest
in something that's going down in value,
but to be smart about it.
Now, listen, sometimes those beaters, they break down.
It's not good.
Yep, one of my friends, she was like,
I'm gonna run my car into the ground.
I'm gonna drive it all the way.
But then it kept breaking down,
it kept breaking down, it kept breaking down,
and she kept putting money into it, money into it.
It was constantly in the shop, and it was just a headache.
And then finally she was driving on the road,
and it started shaking,
and she just realized, she went, nope.
Instead of putting money back into this car,
I'm just gonna take that money instead,
and go buy something else.
So, she sold it, put the money together,
and went and bought something that was way more reliable.
So you have to get to a point where you decide, okay,
is it worth putting money into the car
and fixing it and fixing it,
or is it worth just selling the old car
and getting a new one?
Just to have that peace of mind in life,
I'm totally good with that.
And there are some great reliable use cars out there.
I just did a video last month, 8 Cars Under $8,000.
So they're out there.
They are out there.
Even before this video, I looked on Craigslist
and just put in a small dollar amount,
it was like $5,000 or something,
and they just come up everywhere.
I'm like, yes.
There are great reliable used cars.
But again, if you're in a car that keeps breaking down,
you need to make the decision,
is it worth putting the money back in, back in,
or are you to the point that you just need to sell it?
So, it happens, but you're being smart about it.
Making a smart financial decision when it comes to your car.
Now, if you want to go and look at the Ramsey car guide
at daveramsey.com/guides/car-guide,
say that five times,
I'll drop a link in the show notes to help you,
whether you need to know whether you sell your car,
if you have debt on your car, what to do,
the Ramsey Car Guide will help you answer
so many of these questions when it comes to your car.