DAVE RAMSEY

Dave Ramsey says: $15,000 buys a quality pre-owned car

Apr 23, 2023, 6:30 AM

(AP Photo/Terry Chea)...

(AP Photo/Terry Chea)

(AP Photo/Terry Chea)

Dear Dave,

I was recently in a car accident that totaled my car. My old car was paid for, and the insurance company is writing it off and giving me $15,000. I’m a physical therapist who does home care treatment, so I need a reliable car for work.

I’m debt-free, and I’m in the process of finishing up my emergency fund, but I can’t seem to find a car like my old 2014 Toyota Camry with all the accessories. My rental car is paid for by insurance until the end of the month, and I’ve looked at used cars at a few dealerships, but the dealers and salespeople are telling me used cars still cost the same as new ones, and that I should just finance a brand-new car.

I’m not sure what to do.

— Valerie

Dear Valerie,

Asking a new car dealer if you need a new car is like asking a dog if it’s hungry. The answer’s always going to be yes.

The smart answer, though, is this: If you’ve got a $15,000 insurance check in your hand, go buy a great, used $15,000 car. You may not be able to find the exact car you had before, right down to all the bells and whistles, but Toyota Camrys aren’t exactly rare, either. That money will get you virtually the same car—one that is very comparable in equipment, reliability, miles and overall quality to the one that was totaled.

I realize this whole thing is a big inconvenience. And you’re probably feeling a little pressure to make a decision. But the line you’re getting about used cars still costing the same as new cars is a load of crap. Used cars do not cost as much as new ones anymore. That was true for about five minutes on the back end of the pandemic, when the Mississippi River ran backwards and used cars went up in value. It was an absolute miracle!

There seems to be something in the human brain that tries to tell us we have to get an upgrade if we total a car. I want you to fight that idea, because you don’t need to wreck your emergency fund over something that’s not an emergency. Go online, and look around there without the pressure that always goes with being on a car lot.

And I’m just going to say this out loud: A $15,000 car today is a much better vehicle than anything I drove for the first 30 years of my life. The quality of used vehicles and the life left in them are so much greater than even a new car back in the day. You know that old saying, “They don’t make ’em like they used to”? Well, thank God for that!

But a $15,000 pre-owned car in today’s world? That’s a nice car!

— Dave

Dave Ramsey is an eight-time national bestselling author, personal finance expert and host of The Ramsey Show. He has appeared on Good Morning America, CBS This Morning, Today, Fox News, CNN, Fox Business and many more. Since 1992, Dave has helped people take control of their money, build wealth and enhance their lives. He also serves as CEO for the company Ramsey Solutions.

ENDORSEMENTS

Dave Ramsey

Stock image of a woman with credit cards using a computer....

Dave Ramsey

Dave Ramsey says: Mother-in-law needs help for credit card addiction

A well-planned intervention is needed for a free-spending mother-in-law with a serious credit card problem, Dave Ramsey says.

5 days ago

scissors cutting credit card...

Dave Ramsey

Dave Ramsey says: Be gentle, he’s moving in the right direction

This week, Dave Ramsey discusses what best to do when one spouse is ready to get rid of the credit cards, but the other isn't.

7 days ago

woman with her head resting on what appears to be textbooks at a table...

Dave Ramsey

Dave Ramsey says: To pay off the student loan debt as soon as possible or hold off?

For some, the decision to pay off the remaining balance of student loan debt by dipping into savings could benefit them.

12 days ago

rings on a pillow...

Dave Ramsey

Dave Ramsey says: Go into debt for a wedding? Nope!

If you have to go into debt to make a wedding happen, you’re spending way too much, so Dave Ramsey offers some advice.

21 days ago

bag under tree with gifts...

Rachel Cruze

Dave Ramsey says: Here are tips on practicing contentment this holiday season

Here are five tips for keeping your expectations realistic and your spending in check throughout the holidays this year.

26 days ago

woman moving boxes...

Dave Ramsey

Dave Ramsey says: Risk is real when asking for outside help on a mortgage

Asking for outside help to pay off a mortgage may seem like a good idea at first, but Dave Ramsey explains why the risk is too big.

1 month ago

Sponsored Articles

Follow @iamdamonallred...

Avoid a potential emergency and get your home’s heating and furnace safety checked

With the weather getting colder throughout the Valley, the best time to make sure your heating is all up to date is now. 

Follow @KTAR923...

Valley residents should be mindful of plumbing ahead of holidays

With Halloween in the rear-view and more holidays coming up, Day & Night recommends that Valley residents prepare accordingly.

Follow @KTAR923...

West Hunsaker at Morris Hall supports Make-A-Wish Foundation in Arizona

KTAR's Community Spotlight this month focuses on Morris Hall and its commitment to supporting the Make-A-Wish Foundation in Arizona.

Dave Ramsey says: $15,000 buys a quality pre-owned car