Dave Ramsey explains how you can buy the car you want right now

For people currently looking to purchase a car, it’s easy to get overwhelmed by all of the available options.

Bestselling personal finance author and radio host Dave Ramsey has some advice to help potential car buyers navigate the complexities.

Related: Dave Ramsey says it’s time to buy a house; mortgage rates decline

The first thing Ramsey counsels is the importance of not getting caught up in the unnecessary attributes that come with brand new cars.

“After all, some of the latest models come with all these cool new features like heated steering wheels and massaging seats. That’s right, the seats give you a massage. What a time to be alive,” he wrote on Ramsey Solutions. “It’s almost enough to make you forget about the 1- to 2-year-old used cars that are also sitting in the dealership lot.”

Ramsey always encourages people to buy reliable, slightly used cars, and to pay with cash if possible. The biggest reason is the depreciation involved with buying a new vehicle.

A new car will lose about 20% in value in one year and 60% in five years, Ramsey explained.

Ramsey believes there are plenty of reliable used cars on the market. But the first thing to consider is what kind of car a person really needs.

A number of cars are seen lined up on a car lot. 

Image source: Getty Images

Focus on your three highest-priority requirements

The personal finance personality urged potential car purchasers to pause and focus on the type of car that fits their most important requirements.

“Before you declare your loyalty to your favorite car brand, step back and take a look at the kinds of vehicles out there and what each was designed to do,” he wrote

“Trucks, for instance, were designed to carry goods and heavy materials,” Ramsey continued. “So unless you’re Bob the Builder hauling heavy cargo on a regular basis (you know — gravel, timber, bricks), you probably don’t need a truck. For a good commuter vehicle, stick with options that are compact and energy efficient, like sedans, hatchbacks or hybrids.”

Ramsey offered a checklist, from which you should choose your three most important needs.

I want a vehicle with plenty of cargo space.

I want a vehicle that can fit more people.

I want a vehicle with better fuel economy.

I want a vehicle that’s easy to get in and out of.

I want a vehicle that’s safe.

I want a vehicle that’s better for the environment.

I want a vehicle that can carry heavy cargo.

I want a vehicle that can go off-road or on rough terrain.

I want a vehicle that’s compact and light for city parking.

I want a vehicle that has towing capacities.

Ramsey emphasized the importance of choosing the three most important of these characteristics.

“Remember, you won’t find a vehicle that checks every box,” he wrote. “Be honest with yourself about your wants versus your needs, and think long term about how you’ll use your car.”

Determining the actual worth of the car

Once you find a car you are interested in, Ramsey suggested a few things you can do to figure out how much the car is worth.

A good place to start, Ramsey said, is Kelley Blue Book, which uses data from sales to arrive at a realistic price expectation.

You can also buy a vehicle history report and read used car forums. It is also advisable to check the car’s recall history and to inspect the car yourself. Then, of course, take it for a test drive, Ramsey wrote.

“Also, you can save some money by getting rid of features you don’t need your car to have. Not just technology like GPS, Bluetooth connectivity and backup cameras — but the basics too,” he advised.

“Can you survive with a two-cylinder engine over a four cylinder?” Ramsey asked. “Do you really need all-wheel drive? Stick-shift transmissions are also cheaper (if you don’t mind the learning curve).”

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