Commentary: Sorry Dave Ramsey - You Blew This One

Commentary: Sorry Dave Ramsey - You Blew This One
CarProUSA Unplugged
Illustration Credit: By HIRO-Lab/

I recently saw this question posed to money-guru and radio host Dave Ramsey, who I listen to occasionally and we, in fact, are on some of the same radio stations across America:

Dear Dave,

Could you explain why buying a new car at 0% interest isn�t a good idea?

Dear Raina,

The only way you have a chance of getting 0% interest on a new car is if you have perfect credit and pay full MSRP (manufacturer�s suggested retail price).

But, if you walk onto a car lot with cash, and haggle with the salesperson a little bit, they�ll knock a bunch off the sticker price. If you can buy the car for less than the 0% interest gimmick, how is that 0%? See what I�m saying? The cash buyer pays less.

Besides, you shouldn�t even consider buying a brand new car, unless you�re debt-free and have $1 million or more in the bank. You lose a ton in value the second you drive a new car off the lot. How is that 0%?

A new car also loses about 60% of its value in the first four years after you buy it. How is that 0%?

The whole 0% interest gimmick tricks a lot of unsuspecting folks into buying something they don�t need and can�t afford!

- Source: KTSA

OH Dave. Please come on my show OR let me come on yours, either way!

You do not need perfect credit to get 0%. Interest rates are at historic lows, which means it costs automakers much less to offer this perk.

REALLY? You think you have to pay full sticker price to get 0%? Do you get out in the world at all? Anybody can negotiate a deal and then decide if they want 0% or a rebate, whichever works better for them.

How is 0% a gimmick? No interest means (call me simple) NO INTEREST.

Are you really suggesting you shouldn�t buy a new car unless you have $1 million dollars in the bank? Have you checked the prices on used cars recently? Do you take in account the cost of repairs versus being under the factory warranty?

Lastly, in today�s world, throwing around cash at a dealership doesn�t mean squat, and may likely cost you more money. I address that here:

Dude, stop the car advice. Leave that to me, and I�ll stay out of the areas you may be good at. This is not one of them.