I make much more than $40K a year, my numbers I posted were rounded off low, and don't take into account my wife's income either.
But, here's the rain in Ramsay's parade, he and others will tell you to pay cash for a vehicle, and don't buy more than you can afford. I have a nephew who does that, he's never owned a vehicle that's cost more than $8,000, Currently, he drives a 1999 Honda Accord with 275,000 miles, the A/C quit working 3 yrs ago, the heater sort of works, when it wants to, two years ago the clutch went out on it. 4 months after putting the clutch in, the trans seized. He took the bus to work for 2 months, which meant his normal 20 minute commute ea. way, took him 2 hrs each way. On average, he puts $250 a month into in repairs. His wife, until Jan. of this year, drove a 2002 Honda Passport, when it finally died, it had 240,000 miles on it. He replaced the trans twice, once in the middle of winter after it left his wife and infants stranded in a snowstorm 30 miles from home, when it stuck in 2 nd gear and refused to shift. One of the back doors was held shut with duct tape, the lock mechanism was broke and the parts were no longer available, every month it was something with it. The final straw, in Jan., his wife was on her way from work when the front suspension simply failed, the left lower ball joint sheared off when she hit a pot hole, she lost control of the vehicle and hit a parked car. The airbag failed to deploy, she spent 3 days in the hospital. Two weeks later, they bought a 2 yr old lease return Pathfinder. Yes, they have a large payment on it, but, it has a warranty good for another 3 yrs (which should give him time to put at least some money in the bank).
Dave Ramsey and others like him make assumptions about things. They assume that everyone gets paid the same amount every week/2 weeks/ twice a month, that people are on salary or make a flat wage with very little change every check. I've heard him tell people several times to sell the vehicle they are making payments on. Ok, then what do they do? I've never heard someone tell him, this is my only vehicle, if I don't have it, I don't go to work. The trucking company I work for, the nearest bus stop is 2 miles away, the bus that services that stop only runs once an hour. In my case, to start work at 3 am (which I normally do), I would have to walk 2 miles to catch the first bus at 10:38 pm, ride that bus 4 miles, wait until 11:13 pm to catch the next bus, take that bus 10 miles, catch the next bus at 12:01 am, then walk 1 miles through the worst part of town (where getting shot at 12:10 am is good possibility), catch the next bus at 12:14 am, and get to work at 12:45 am. So, what do I do for 2 hr and 15 minutes until my day can actually start? Oh, and the ride home at 3 pm, the reverse. I would basically get home in time to go back to work. How does Dave's system work now?
Anyhow, after this weekend, and some random looking, the wife and I had a long talk. I had my gall bladder out two weeks ago, so I can't ride my motorcycle for 4 weeks. As soon as I can ride, my pickup is going in the shop. I'll have them rebuild the front suspension, replace the front brakes and bleed the system, service the trans, and take a long hard look at my HVAC problem. From talking to them, they think they can fix it. Given the weather, I figure they can have it for up to two weeks. If they can get everything with the HVAC system working correctly, then I'll keep it for another year and get some extra money put in the bank. As well as get another bill paid off, so then maybe I'll be able to figure for a higher price tag and larger payment larger down payment.
