The Ramsey Show - App - Buying a Car? Here’s What You Need To Know (Hour 2)

Episode Date: March 18, 2022

George Kamel & Dr. John Delony discuss: What it's like to buy a car in 2022, Supporting children that have different educational needs, Getting started in investing, Paying off a car when you're upside down on it. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

🎵 Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where America hangs out to have a conversation about your life, your money, your mental health, your relationships, everything that matters to you. We are here to talk about it. I'm George Campbell, joined today by the infamous, the legendary Dr. John Deloney, and we're taking your calls. So give us one, 888-825-5225. For you younger folks out there, there's an app on your phone that says phone,

and you tap that and then type in 888-825-5225. You will get connected to Kelly. She's very nice. She's not going to hurt you, and you will get patched through to me and John. We'll have a good time. Did you just tell the youngsters how to work a telephone? They need it. Did you know that it makes calls? Yeah, but I was born in the 18th century. That's true. All right. Let's get to it.

This is a significant upgrade. Haley is waiting for us, John. She's in Milwaukee, Wisconsin. And let's go to her right now. Haley, welcome to The Ramsey Show. Hi. Hey. My 7-year-old son with ADHD has been in traditional school for the past four years, but now this upcoming year we'll be homeschooling him

while sending my neurotypical 4-year-old son to traditional school. So I just want to know how I can nurture their relationship so that they aren't comparing themselves to each other in a damaging way. How I can support their emotions through this life change. I think you put everything on the table. And what I mean by that is everybody's got to parent their kids differently. And the last 20 years or so, we've got this weird thing about everything's got to be perfectly equal, which has turned into everything's got to be exactly the same.

And every one of your kids has different needs. I've got one kid who loves the outdoors and I've got one kid who would like to go outside never, ever again, ever. And so one kid, I can hold accountable and say, well, you got to stay inside the rest of the day. And it's like, no. And the other kid, I say, you got to spend the rest of the afternoon outside. And so it's just a matter of being comfortable parenting them both differently. What are you worried about? Truthfully, my child with ADHD actually loves, loves, loves, loves school. Why are you taking him out? His needs. Um, it truthfully is his needs. Tell me more about that. What's that mean?

Um, so we tried medication with him and sometimes it actually makes his, um, interruptions worse. Sometimes it makes it better. We're working on the dose still. So we're still kind of in this newly diagnosed transitional phase. But is he getting, take the diagnostics off, take the medication off, take everything off. Tell me what your little boy's going through at school.

Okay, the teachers say that he is too disruptive, just calling out a lot to the point where, and too distracted to the point that they just don't think he's getting anything academically out of it.

Yes, he's getting socialization and that's why he loves school. So we're going to try to find some place that he loves just as much. I guess we're just concerned that he's not going to equate whatever socialization we give him to the same as school, just because that's all he's known for the last four years. Yes. Is this a public school? This one's a private, but when we talked to public, they said that they, yeah,

he was too high functioning for any type of services whatsoever. So that's why we're like, we need to, and I also read the book you recommended, Scattered Minds. And we're like, you know what, let's just give him all the attention at home that we possibly can and see how much that helps so that's why we want to go that route with him but my younger kid he doesn't exactly like school but we know that that it's because of the socialization and we know that that's what he needs so it's just kind of trying to we think that this is what they do need, but they could be wrong. So let me give you a little bit of peace about a few things, okay? Okay.

Give it a shot. And if two months in you realize, man, we need to get this thing figured out. He needs to be at school with his peers, with some structure. We need to have a daily routine that is relatively firm so that he can begin to practice boundaries. I'm talking about your son who's struggling with impulse control. Yeah. That might be where you are.

And so you won't have failed anything. You will have been a mother who loves her kid and is trying. Okay? And then we'll say, well, we'll get you back in. And then you'll get back in. They're young. It's fine. And then we'll say, well, we'll get you back in. And then you'll get back in. They're young. It's fine. And vice versa.

Hold it loosely. The second thing is a public school is obligated to take care of the needs of its students. And private schools, some are great. Some are notoriously terrible because they can't afford the resources to take care of students with nontraditional learning exceptionalities. Okay? So if you have a diagnostic and you've sat down with a – got all the psychological testing and you sit down with the public school they have to meet those needs it's just a law so then what steps what so then what steps do i take then if they are saying that according to their assessment it's doesn't you know like he doesn't need as many

services as what we um the other assessments are saying you You know what I mean? Yeah, yeah, yeah. The particular school we're going to isn't matching the needs that we think the psychologist even thinks that he needs. Generally, a school can't override that. There's going to have to be some pretty firm conversations about that. And there's entire programs that go to war against schools

who say, nah, you're a doctor, you're a psychologist, or this professional is wrong. We're going to just do it like this. And in defense of the schools, which I've worked in, sometimes the change of environment, the change of structure, the change of a number of things. My son went from a private school to a public school that had infinitely less boundaries to infinitely more and has absolutely soared. This is a different environment. Okay? So sometimes the environmental change.

All of this is to say your kids will absorb your tension. Your kids will absorb your indecision. Your kids will absorb your fear. And so say we're doing the best we can with the information we got. We think this is best for you. We're the parents. And we're going to stay plugged in with you. We're doing the best we can with the information we got. We think this is best for you. We're the parents. And we're going to stay plugged in with you. We're going to stay plugged in with the teacher. And then we're going to make

the best decisions in real time as we move along. You know what I mean? And if you choose homeschool, great. Go all in. Do a great job at it. Do a great job. Your son may, I mean, you may get, may become a peaceful i mean you have no idea what's going to happen or you may know a month in i think that um we're going

to bury each other and in the backyard and this is not going to work for our family great then we'll go back to school go to public school and then we'll talk about the arts and the 504 stuff and we'll get through all that stuff with the doctors. Okay? But I want you to be at peace. The thing I want you to not do is don't hide this stuff from your kids. Don't keep secrets. You hear what I'm saying? Just be honest with them.

Tell them what we're doing in age-appropriate language, and then we're going to go from there. They are lucky to have you. They're lucky that you're their mom because you care about them and you're trying whatever's going to work for them. I want you to exhale and know, I'm doing a good job. I love these kids.

I'm working hard. And then we're going to hold it loosely and we're going to make changes where we need to. Good for you. A lot of wisdom there, John. This is The Ramsey Show. show. You've got a lot on your plate, a job, your home, your marriage, and your growing family. While you're enjoying the present, you can't help but, your marriage, and your growing family. While you're enjoying the present, you can't help but think about your future and your finances. As you explore your options, consider Christian Healthcare Ministries, or CHM, for your healthcare. Their generous maternity program and budget-friendly monthly programs have been a blessing to members welcoming children

into their families. Visit chministries.org slash budget to see if it's right for you. Christian Healthcare Ministries is a Ramsey Personality, George Campbell, joined today by Dr. John Deloney. This is The Ramsey Show. Open phones this hour, 888-825-5225. All right, John, occasionally we get a question from social media, and occasionally we take that question. And today we have one from Olivia in Texas, and she writes in on YouTube. I just finished funding my six-month

emergency fund, and I'm ready to start investing. What are the best retirement plans to invest in? I love this, Olivia. Way to go, first of all, for getting debt-free, building that emergency fund of six months, and now you're at baby step four. You're ready to begin investing that 15% of your household income into retirement. I have a feeling I know what you're going to say. What am I going to say? Open a Dogecoin account.

No crypto. We're not doing that today, John. I meant get on the internets and find a bunch of artwork, digital artwork. No NFTs either, John. Okay, let's stick to the basics here. Here are my two favorite retirement plans to invest in. Number one is the 401k.

That is going to be through your employer, and it's just a type of account. It's not an actual investment in and of itself. You want to actually put investments inside of that 401k, like good growth stock mutual funds that we talk about all the time. The other type of retirement plan that I recommend is an IRA. That stands for Individual Retirement Arrangement. Did you know that, John? I was going to say Individual Retirement Account. They're interchangeable, but the official terminology is arrangement.

And this is basically another retirement account that's outside of your employer. So anyone with earned income can go open an IRA and start investing. So I can't go open – if I had a great lawn business, I couldn't just go open a 401k on my own? I need to start opening an IRA? Yes. Okay. Now, there are employment options. If you're self-employed, there's other options.

That's right. We'll get into it another time. Okay. But it sounds like she's got a normal employer here. So let's talk about this. Traditional. So a traditional 401k, traditional IRA, that doesn't mean it's old-timey. It just means that the money that you put in there is pre-tax. And that means that it's tax-deferred growth, meaning you will pay taxes on that when you pull the money out in retirement after 59 and a half. So let's say I put $100,000 in, it grows to be a million dollars. When I start

pulling it out, I'm going to pay tax on the $900,000 that it's grown, right? You'll pay taxes on all of the income. What I withdraw. Yes. And here's the beautiful part about traditional is that there are tax advantages. So you can deduct that amount from your taxable income when it comes to tax time. So that's a nice part about traditional. But let me tell you about another friend named Roth. So on the other side is Roth. And what I love about Roth is that it grows tax-free. Meaning if I have a million dollars in my Roth 401k, I have a million dollars I can go spend and Uncle Sam can't touch his hands on it. But I put it in there after taxes. Exactly. So you're already paying taxes on that money before it ever goes into

the account. So either way, you're paying taxes. Let's make that clear. This isn't like a tax hack. We're getting around the IRS. We're going to pay taxes on this money. It's just a question of, am I going to do it now or am I going to do it later in retirement? So I'm a big fan, especially for younger people out there, to open up a Roth 401k or Roth IRA if you have that option. Here at Ramsey, we have a Roth 401k. It's a fantastic option. And I do my entire 15% in our Roth 401k. And the beautiful part is here at Ramsey and many employers, they have a match. And so the match is free money. It's 100% return on that investment. So Ramsey puts 4% in when I put 4% in. That is already right there. So we say that match beats Roth beats traditional, meaning we want to take the match first, then we want to move into a Roth option. So if you don't

have a Roth option at work, let's go to the Roth IRA, let's fully fund that, then let's move back to the 401k, the traditional side, and finish out that 15%. Very cool. Now, if you have a Roth 401k and you've got good investment options in there, that's great. But the IRA will give you way more options. I mean, the sky's the limit with an IRA. The 401k is limited in the investment. So you want to make sure you've got good growth stock mutual funds in there that have a good proven track record. And many people do combinations depending on their situation. But reminder, a Roth 401k, a 401k, an IRA, these are not actual investments. They're just a bucket. It's a jar that you can then put investments in, and they are tax advantaged, which I love.

And remember, we want to diversify here, John. We don't want to put all of our eggs in one basket. I remember this. Yeah. Yeah, one time. It was one time I had all of our eggs in one basket. I remember this. Yeah. Yeah. One time, it was one time I had a basket of eggs and I said, hey, John, hold this one basket for me. And then I slapped it out of his hand and went, oh, it was wild. I know. I've talked to my therapist about it. Oh, you have a therapist? No, actually, I talked to James. It's just James. Yeah, that's right. Well, I mean, that sums it up for investment accounts. When it comes down to it,

it's so simple. But you didn't mention crypto once, dude. No, and that's the thing. People overcomplicate investments, and that's when things get out of hand. That's when they make bad financial decisions because they think, well, my buddy told me about this investment over here I should be doing. Man, the millionaires that we talk to, the stats are incredible. 79% became millionaires, they say, due to their employer-sponsored retirement plan.

A 401k. That's it. If you want to become a millionaire, you don't need to get rich quick. You don't need to hit it big at the slots. You just need to do something simple and boring consistently over a long period of time. That is how the majority of millionaires got there. And by the way, that same advice works for you want to become a better husband, a better wife,

better girlfriend, better boyfriend, do little things consistently over time. You want to get in shape, be consistent with the workout, do it on a regular schedule. There's no hack for me

to get a six-pack by tomorrow, John? There's a few. Oh, boy. And you'll pay for them later, right? Yes. Same with like changing your nutrition. I mean, everything is be consistent, do it over and over over a period of time and the results take

care of themselves that's right well thank you so much for the question olivia call us back when you're a millionaire all right let's go to the phones adam joins us in new york city adam welcome to the ramsey show are Are you with us, Adam? We lost Adam. It was so close. We were so close to helping Adam, and then we lost him. Well, we can move on. Right, Kelly?

Do you feel good about this? Oh, he's back. What's up, Adam? He was on mute. All right. Hey. What's up, dude? How can we help, man? That was a close one.

I almost lost you guys. No, we almost lost you. You would have been our first. What's up, man? So was a close one. I almost lost you guys. No, we almost lost you. You would have been our first. What's up, man? So I am $26,000 in debt. 23 of that is in a car, and three is in a credit card. And the car is just way too much. The payments are just a big hassle every week, every month.

I was just trying to see if I can relinquish the car or maybe find someone to transfer the payments to so I don't have to pay for it anymore. Is it a lease or is it a traditional loan? It's a loan. Okay. What's the car worth? It's worth $1,700, I believe. $1,700.

Okay. Well, one option is you keep the car and you keep making payments, but it sounds like that is not an option you can afford. Yeah, it's killing me. So in that case, you're going to be in the hole by about $6,000, right? Yeah. How much money do you have saved right now? I about have like $1,000 altogether. Okay, so you have that baby step $1,000.

When you say this thing's worth $17,000, is that, did you go call somebody and have them appraise it, or is that you looking on Kelley Blue Book? Yeah, I went on a couple websites, and they all said about the same. Okay, that's private sale $6,000. Is $6,000 underwater? Yeah.

Okay, alright. Well, that's going to be your best bet. I mean, you could get a personal loan from your credit union. It's the only time we would ever tell you to go get a loan is when you're underwater on a car. But I still don't love that option for you. What's your household income? It's about $30,000 a year. Okay.

Well, we have got to get this income up. What are you doing for work? I deliver for Amazon. I am getting a second job. I'm a bartender during the peak season, basically throughout the summer. So I'll be making, I usually make like $800 to $900 a week there.

All right. And that's going to bump up my money. Well, in New York City, people drink year-round, I found. So I'm going to be doing that every weekend. Yeah. Is that possible? Any weekday, if found. So I'm going to be doing that every weekend. Yeah. Is that possible? Weekday, if possible. Yeah, definitely. I just had an interview yesterday for another place,

so I start next week. Okay. Are you doing a monthly budget? Yes. Okay. We need to tighten that thing down. I'm going to go ahead and gift you one year of Ramsey Plus. If you'll watch all the videos in Financial Peace University, you can get every dollar plus. Hang on the line. Kelly will get that for you. But man, we've got to create margin here and we have to get rid of this car. So if you can save up that six grand and be done with this car and the difference, that's what I'd be doing. Or you go get a quick loan, get $1,000 on top of it, buy a $1,000 beater, get rid of this thing, and now you owe $8,000 instead of seven. And get the worst car you have ever seen in your life.

The more you hate it, the more I know it's the right car for you right now. You are broke, dude. You're living in New York City making $30,000, and you're 26 in debt. This is a problem. But we're rooting for you. Call us back when you're debt-free. Call us back if we can help in any way. This is The Ramsey Show.

I'm George Camel, joined today by Dr. John Deloney. Our question of the day comes from Blinds.com. Blinds.com's 100% satisfaction guarantee means even if you mismeasure or pick the wrong color, they'll remake your blinds for free. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. You can use the promo code RAMSEY to get the best deal. All right, today's question comes from Jan in Indiana. Jan writes, my husband and I are in our early 50s and earn about $14,000 a month.

We owe $120,000 in consumer debt and $180,000 on our home. With our income, I think we can pay off our debt by sticking to a budget. My husband thinks we need to sell our property, which is worth close to a million bucks, because the feeling of being instantly out of debt will bring us peace. He's worried because we don't have any retirement savings. I can't seem to help him that with budgeting and sacrifice, we can be debt-free and still remain in our home. If we sell, I'm afraid he will be filled with regret over losing a home that we both love.

How do we navigate this conversation of whether to dig in and pay off the debt or sell and be completely debt-free and also have money left over for retirement as well? So George, this is really a two-part question. One is math, right? One is should we sell this thing or not? Like, let's look at the numbers here. I think underneath that question is a terrified wife. I'm about to lose the home that I love. Yeah. A terrified husband who said,

thinking to himself, I haven't taken care of my family. Um, and I feel like I've got a lottery ticket right now because house prices are inflated. Right. And I could get it all back with one move. I could put it all on red 37. I could get it all back. Right. Um, so to answer, let's, let's, let's do this in reverse order, George. Like how do we navigate this conversation of whether to dig in and pay off the debt? What I see George, most couples get this conversation wrong is they approach this conversation about should we sell

the house or not should we is it a good financial move the question here is i'm terrified i need you to hear me say i don't want to sell this house and i'm afraid if we do i'm going to regret it you're going to regret it and we've worked a long time to get this home thing the way where it is so this conversation starts not with i'm worried about what you're time to get this home where it is. So this conversation starts not with, I'm worried about what you're going to do. This is you saying, I'm absolutely terrified. Put the fears on the table. What are you scared about?

And he's going to say, we got nothing. We're in our 50s now. We got no retirement. And I'm staring down the barrel of 10 or 20 more years of working years, and then what do I do now? You know what I mean? Both of them are scared. They both need to say that

because that's a humanizing thing and it puts them both on the same page. Now we're both scared. We've got all our fears on the table. No secrets. Now we can go ahead and say, okay, how do we solve this problem? Now we can look at the math.

Right. And so what I would tell him is this. I get it. I get it. But here's what's going to happen. You haven't stuck by a budget. You don't have the budget. You don't have the behaviors. You don't have the actions as a part of who you are as part of your identity.

So you can go get, um, you can go get lap band surgery. If you don't commit to doing life differently after that, to also having counseling, also getting some people around you, some nutritional support, you're, you're going to end up where you were. So you're going to sell this house. You're going to pay off all your debt. You're going to be debt-free. You're going to try to find some really tiny house, and then you go with you. And now we're right back to the guy who doesn't follow the budget, who doesn't get on board with his wife, who doesn't do things together, right? See what I'm saying? So you end up with the same thing. You haven't addressed the core symptoms here. Exactly. Leapfrogging and getting the get-out-of-jail-free card by selling the house, I'm not mad at that option.

Occasionally, or, I mean, yeah, yeah. It's a viable option, but they don't – if they made $4K a month, I'd say, yeah, you guys are broke. They make $14K a month. They're making $168 a year, and they have $120 in consumer debt. So math gives me hope in a situation like this because I look at it and go, all right, if we can put $10K of the $14 towards debt, we're debt-free in consumer debt. So math gives me hope in a situation like this, because I look at it and go, all right, if we can put 10K of the 14 towards debt, we're debt-free in 12 months. In one year, we're completely consumer debt-free. And doing the same thing 18 months after that, we don't have a mortgage anymore. So in two and a half years total, you went from $300,000 in debt to not owing anyone anything. And now we can invest like crazy. And let's be clear. You're asking them to suck it up.

This is a major life change. But I want you to hear what she's saying. She's not saying, I'm worried about him. She's saying, because my husband won't be responsible, I'm about to lose my house. That's what she's saying. And when he hears that, he's going to go, whoa, whoa, whoa, whoa, whoa. I don't want that to be the message here. Let's make some major changes for 28 to 32 months. Yeah. And let's change

everything. What I like about plan one with Jan's plan is going, hey, let's say we have a paid for house in two and a half years and no debt. We can still sell the house. If our retirement is not looking good and things go haywire, we can downsize and we'll be okay. We can survive in retirement. And then let's start putting $8,000 to $9,000 a month into retirement and really start hitting the gas. Crank it up. So I like plan one because I think the behavior change is going to affect the marriage. It's going to affect their life in the best way possible versus leapfrogging. So thanks for the question, Jan.

It's a great question. And by the way, I'm right here with her husband. If I look at that same picture, I'd be thinking, I could just get us out of this right now. I get that. I get that. I get that. I'd rather see you change your identity. All right.

Let's go to the phones this hour. It's a free call, 888-825-5225. Mike joins us in Buffalo, New York. Mike, welcome to The Ramsey Show. Hey, guys. Thanks for having me. Sure. How can we help?

Okay. So I'm 28. I'm living at home. I actually moved out of an apartment that I was living at. It was just too much rent, so I decided to move back. I got a little beater car now, and I depleted my $1 thousand dollar emergency fund to get it. But now I want to move back out. And I just don't know if I should be saving up a thousand before I move out or if I should kind of treat this like sort of an emergency, I guess. Why do you want to move out? I'm in a relationship right now. And it's not the best situation. We don't see each other too much and it's just, I feel like it's kind of putting a strain on things to be honest.

Yeah. Are you safe at home? Yeah, no, it's great. I mean, as far as, you know, I have a great relationship with my parents. It's just, you know, everything outside of that. It sounds to me like you're going to trade one strain for another, that you're going to trade financial strain to get your feet under you. I mean, what are we talking? We're talking like three more months, 90 more days, 120 days of hammering it. Like, man, if your relationship can't – if you're with somebody and you say,

hey, man, for the next three or four months, I'm going to make a move that's going to change our future forever, my future forever, and they're not all in your corner 100%, then that bodes – that's a shadow over your relationship. If you run out for this new relationship, you're going to not be able to go out. You're going to find yourself in debt. You're going to end up back in these same places. And then at some point, I'm my brother, I'm telling you, you're going to get back in your parents' house. I'd much rather see you just suck it up and get this thing knocked out. Okay. Mike, what's your income right now? I got a new job about two months ago.

I'm making about $40,000 a year. Okay. You need to save this baby step one in a few weeks, and it may mean taking some extra side jobs right now. Baby step one is very fast. So, no, there's no pausing baby step one. It's a number of days. So, there's no pausing here, dude. You have a number of days. So there's no pausing here, dude. You have $0 to your name and you don't even pay rent. You should be able to save this

thing up so fast. How old are you? I'm 28. How much debt do you have? About just under 30,000. Yeah, man. There's something I'm missing because you've got crisis in your voice and the numbers aren't telling me crisis. What's the panic? So, I mean, the past couple of years, I mean, I've been listening to you guys for about three years, you know, Dave and everybody else. I wanted to do, you know, follow the plan. I actually just joined FPU just yesterday doing an online class.

And, you know, I want to take this more serious because, you know, it just seems like with, you know, relationships and even work life has just been so volatile the past couple of years, even before the pandemic started. That's right. So here's – let today be the day. Let today be the day. I don't want you calling back in three more years saying, well, it's just been a crazy time.

That's right. Dude, life's crazy. You need some stability in your life, and that means getting that baby step one, paying off your debt, and then we can focus on moving out and focusing on this relationship. You're too broke to be in a relationship right now. You can't breathe. And you need some little wins, brother. You signed up. That's a win. You need to get that thousand dollar emergency fund this month. That's a win. We're going to keep inching towards this thing. Okay. I'm George Camel. Welcome back, America. This is The Ramsey Show.

I'm George Camel, joined today by Dr. John Deloney. All right, John, we've got to talk about something because it's on everyone's hearts and minds, and that is cars. Everyone's losing their minds. The car market has lost its mind. Up in here, up in here. Up in here, and we are both on the market for a car, and it's a very stressful time when you're trying to do it, especially with cash. Okay.

So you are currently purchasing one. I did recently, a few months ago. It was the strangest interaction I've ever had when it comes to transaction. It got to where I wrote a check, and I was looking at the salesman and I, because it was like, Hey, well we need to like talk to you about this. And you know, if you finance it here. And I said, look, dude, I got a check and it got, I felt like I was talking to my son. I said, I want to give you this and I want you to give me that. You have a thingy right there. You have the key. I can see it. Just give me that. And I'll give you this you have the key i can see it just give me that and

i'll give you this like well you know we gotta we gotta go through these meetings and i said i'm not gonna buy any of your special clear coats i don't want any extended warrant i just want that could you just take this can i just give you this can i just give you this man it was such an event that i ended up leaving and then we called back and i said hey how about this just bring it by we literally like a mile and a half down the road. Just drop it off here. I'll give you this giant check for it. Dude, it was easier to buy my house than it was to buy a car with cash.

Wow. And you, you're in the middle of it now. Has it gotten worse? Yeah. I just tried yesterday. And here's the thing. Okay. So don't fill me in on this.

I'm going to pitch this article to you to prove what I'm experiencing. Okay. Wall Street Journal. Here's the headline. Car dealerships don't want your cash. Oh, there you go. They want to give you to prove what I'm experiencing. Wall Street Journal, here's the headline. Car dealerships don't want your cash. There you go. They want to give you a loan. There you go.

Buyers say dealerships are pushing them to borrow because they make more money that way. The hot car market is giving them the opportunity. So every time in history, if you'll pay with cash, it's actually cheaper. Yeah. We'll get the deal done faster. And now they're upcharging you, right? Yes. And the numbers show this, John. If you finance a car, the dealership makes, you know, $3,000, $4,000.

If you just pay cash, they're going to make hundreds of dollars, maybe $1,000. So they're making way less if you pay cash. They're making money off the financing deals. If they can get you to finance, they get kickbacks from the lenders. They have their own financing. They're making money from that. And so it's actually increasingly difficult to buy a car with cash. Now, this is not your excuse, America, to go, well, I'm going to go get a car loan because it's too hard to pay with cash. I'm not going to get a discount. You still have to pay

with cash. You will not go into debt for a car. But here's my experience, John. I said, hey, yeah, I'm not going to finance. I was just straight up with them, which, you know, problem number one, honesty. Shouldn't have done that. And they go, okay, well, it's going to cost you $1,000 more if you're going to pay in full. And I went, okay, well, I guess you're not getting my business then. And so I just said, hey, listen. Let's be clear. The check you're about to write is a decent size check. Yeah. It's a good check. Yeah. And so I said, here's what I'm willing to pay. You call me back if you can do that. Otherwise, it's the end of the conversation.

And that's what happened. And I just got a text while we're doing the show that was like, hey, let's talk ASAP. I've got some updates for you. And so this is the digital version of the walkaway. I don't even know what that is, but it's cool. So here's what this comes down to. You just walk out of the dealership. Oh, yeah, yeah, yeah. And they chase you out and go, no, no,

John, John, John, come back in. And so here's what I want you to know. The person with the most patience, the most information, and the most options always wins in any spending decision. When you're not desperate, you can make a better decision. When you have options, you can make a better decision. When you're willing to walk out the door. Yes. So here's what I want to tell you guys. Do your research. There are so many avenues online to research the exact car you want.

You will know more than the dealership does about that car by the time you walk in there. Number two, I want you to make sure that you know the exact value of your trade-in. And here's the thing. If you've got a trade-in, appraise it before you get the out-the-door price because otherwise they start finagling it on the back end to charge you more. When you say, no, no, no, you said my car is worth $4,000. That's what we're going to do here. And the out-the-door price includes all of the taxes and fees, the dock fees, all that stuff. That is the number we need to aim at.

You don't have to say, hey, I'm not going to finance today. You can save that to the end if you really want to stick the knife in and go slap the check on the table. See, I'm like you. I'm like, hey, it's a cash deal. I'm going to walk out today with this car. I've already driven it. Skip the games. Can we just not play a game?

Yeah, they do the four square and they go, we can get your payments down to whatever you want. Yeah, not really that kind of guy. No. That's cool. So here's what I want you to do. Go in with a cashier's check, maybe a little bit below the asking price. Like, here's what I would love to pay for this car. And when they see that check in hand, they're still going to go, well, we could make $26,000 right now,

or we can hope that someone finances it in the next month, or we get a car off our lot and get a trade in. Now, if they go above that cashier's check and you still feel like it's a good deal, that's okay. You can supplement that with your own check, with cash, whatever that looks like. So you don't need the exact number on the table there. And I do think it's important to call out here. So there's a whole bunch of car dealerships trying to do right by people. Some good guys out there. There's a great guy, Larry in Paducah. A lot of our people here at Ramsey do business with great human beings trying to help people out, trying to put them in cars. And so this isn't all car dealerships are bad. And I hadn't bought a car in a long time.

And it used to be they put something in the paper. I don't know if you remember what those days were like. Or they put something online, and then you go haggle. I do understand now, like after talking with the guys and getting some more information, that buying a car is different now. The idea you're going to go in and get $8,000 off, those days are not here. Yes. Right?

So as a buyer, don't be a jerk. Don't be a moron. Don't squeeze the... Be kind. Don't be a good human being. Yeah. Say, this is what I can afford to pay. I want that car.

Let's shake hands. And then if you can't, walk out the door. Yes. But agreeing on that out-the-door price is the key. Yeah. Because if you agree on that, then it doesn't matter what they say about financing. No, we agreed this is the price of the car. And please, please look at the contract.

And if there's anything beyond a small dock fee in your sales tax for the state, county you live in, run. If they're trying to tack on all these extra things and warranties they force, walk out of there. Go, I'm not paying anything but a small dock fee. And if you can get rid of that, that's even better. And then the taxes, which, yes, we have to pay our sales tax on these cars. So do that. Walk in with a cashier's check. Don't walk in with a barrel full of cash, of actual physical dollars. That is a terrible move. It's dangerous. They've got to report it to the IRS. They don't want to deal with that hassle. So yes, we say pay cash. We don't actually mean take a briefcase like it's an old school movie. It's kind of baller though.

It is. I've known people who've done it and they get laughed out of there. They go, go get a cashier's check. We're not playing that game. So be patient, do your research, know your options. Don't go on a Saturday when it's packed out. Go at the end of the month on a weeknight when it's not raining so that you can actually do the inspection and not be in a rush. And that's going to help you make the best financial decision and be willing to sacrifice. I know you wanted this exact specification. It's okay. If you've got another option and you're desperate, then you got to deal with that. But here's the other thing. Don't buy a car right now unless you absolutely have to. Yeah, don't buy a car. Ta-da, get a fix. Clean it. That's right. James gets it.

Now, Ken and I took a call about a snozzberry Jeep, and the wife really wanted this exact Jeep color. It was the only one to get, and we had to talk her off the ledge. And I was like, snozzberry's not even a color. Let's not pretend that you need this exact Jeep at this exact time. That's like a

Willy Wonka candy bar, isn't it? Yeah. Exactly. It's from Willy Wonka. That's a snozzberry Jeep. Very stressful stuff. I'm in. James, did we hit everything in this article?

I was going to say, what about private sale? Private sale. Let's talk about private sale, John. This is very important as well. Okay. That is when you can actually negotiate is with a private sale. You can get more money if you're selling that way, and you can actually negotiate. Because if I'm just going to John, he's got no incentives from the financing lenders to make money.

He needs money. He just wants the money. He wants to sell his car. So I would be on Facebook Marketplace looking for these. There's some third-party sites like AutoTrader where people are just listing their cars for sale. So that's where I would start my research and see if I can work it out. And always, always get an inspection on the car from a mechanic. This will cost you about a hundred bucks, but no matter who's selling it, go get an inspection from a reputable mechanic before

you go slap 10 grand down because it's a deal. And then you find out there are some major issues that you didn't know about until you're going over 60 on the interstate and it starts rattling. Right? Transmission falls out. Yes. So you've got to do the inspection, negotiate with cash in hand, be a kind person, commit, say, hey, I've got cash today. If you can do this deal, I'll show up. And so that's how to navigate this market, John. It's not fun. I totally feel empathy for people that really need a car.

And you can find a car, by the way, that's under $15,000, under $10,000. We get a lot of flack for that. People go, you can't find a car. You can't beat our cars. They don't exist. Go to AutoTrader or wherever and sort by lowest price. They exist. There's some great cars for $4,000, $5,000, $3,000.

Suck it up. No one's going to stop you in a parking lot and be like, whew, I want some of this. No, it's not that kind of car. I've never been stopped. But it'll get you where you need to go. That's right. Well, that puts this hour of the Ramsey Show in the books. My thanks to John Deloney, my co-host, and all the folks in the booth who are doing a great job keeping the lights on.

And you, America, we appreciate you listening. We'll be back with you before you know it. Hey, it's John Deloney, co-host of The Ramsey Show. Did you know over 18 million people listen to The Ramsey Show every week? A lot of those people listen on one of our 600-plus radio stations across the country. To find a station near you, go to RamseySolutions.com slash show.