Sunday, January 6, 2013

Ballin' on a Budget: How to buy Cars like a True Playa

I'm sure you've seen it many a time.

Out there on the streets we have what I like to call  "pretend ballers" who are always putting on display the flyest, hottest new set of wheels. I guarantee that at least a couple times in life there was one of them crusin' to a stop at a red light beside you. 20 inch rims are spinning and shining bright, the bass from the sound system enough to make your ears vibrate to the beat of "Pop Champagne", a custom made license plate, those extravagant unnecessary neon lights and the whole shebang. If you happen to share eye contact with him and he sees the shanty you're driving in, almost 150% of the time he reacts like this:

 That boy must be rakin' in the dough, right? Yeah, if he's a drug dealer or a rapper.

If he's not breaking the law or churning out top 40 hits, then I would love to take a peek at that dude's bank account. More often than not, jaws would surely drop even farther then when feasting your eyes on his slab (his car, mayne) when you realize the joker only makes minimum wage.

I'll never forget this one time when my stomach was grumblin' for some Taco Bell. I pulled into the joint right beside a sweeeeeet little Cadillac CTS. My dream car! Anyway, I walked on into Taco Bell to indulge in some calorific burrito concoctions and there was a sweet little ol' hispanic lady who bagged my food and handed it over to me. I grubbed on that deliciousness and was on my way out and just then the little ol' lady was walking out the place too. Being a gentleman as I am, I hold the door open for her and to my amazement, little ol' lady walks to the CTS and hops in and speeds off, diggin' the scene with a gangsta lean! Huh? She's pulling that kind of ride with a Taco Bell salary?

Only in America, man. This is the only country in the world where you can have a broke-like-a-joke family, living from paycheck to paycheck and barely scrapping by while having one or two BRAND NEW CARS in the driveway. We sure love our cars, to the point where we accept making car payments and being in debt forever like it's a perfectly normal thing. Tsk, tsk, tsk.

Truth is, normal is broke. These are the wise words of Master Sensei Dave Ramsey, who I have coined as the "realest white dude on the planet". I've gushed over him before on Ballin' on a Budget, so I gotta toot his horn again. He knows his stuff and one of the main purposes of the BOB Series is to spread his knowledge in a way you guys can digest , know what I'm sayin'?

According to Dave Ramsey, being weird is good. Being weird is smart. Doing things differently than the majority of common folk, especially when it comes to buying cars. Despite what most people say, car payments aren't a way of life that you just have to deal with. Society has just been manipulated into believing that garbage.

Staggering Statistics

  • one-third of car buyers sign up for a six-year loan at an average interest rate of 9.6% with the average price of the car being $26,000!
  • What the Car dealer will never tell you: your awesome new car loses about 25% of its value the instant you drive it off the lot. After four years, your car has lost about 70% of its value!
  • That means after six years, you’ve paid almost $33,000 for a $26,000 car, which is now worth maybe $6,000. 

Basically the stupidest thing you could ever do in your life is buy a car that is brand new. Dave Ramsey says that's the equivalent throwing $100 dollar bills out of the window of that new ride every time you drive it, judging by how much money you're going to be losing in the long run. It's much more reasonable and less of a wallet raping to buy a $2,000 used car. Sure it might be a junker, sure you'll have to take to the the auto mechanic and fix a bunch of it's problems but even then you're probably saving a cool 20 grand. (Screw you haram interest!)

If you're buying a new car, even one that's only a couple of years old, you're gonna be burning a good 300-400 a month out of your income for the next 3 or 4 years. Why not just pay yourself that money and save it up and buy a car straight up in cold, hard cash? All it takes is a little patience. Millionaires aren't usually the ones driving that Mercedes-Benz out on the road, they're driving that used Toyota Camry or pick-up truck. The folks who drive around in those tricked out Impalas, Mustangs and Chargers are usually the brokest of the broke.

And just as a sidenote, I want to give clarity to the perception of the word "millionaire". I'm sure when most people hear the word millionaire, they picture Donald Trump, or a movie star or musical artist pop into their head. That is a tiny microscopic sample of millionaires. Most millionaires are not people who won the lotto or have some record deal. They're average joes that have a regular nine to five somewhere. They just don't flaunt their wealth and burn through their bank account. They work hard, save their money, are smart with the financial decisions they make and over time that $1,000 dollars in the bank gradually adds more zeroes to it and that's how they become millionaires. Nuff' said on that.

If you really desire something newer and flashy, you can do so without straining yourself by dealing with a bank. This trade up idea is illustrated brilliantly in this video from Dave Ramsey's YouTube Channel.

Us BOB'ers mustn't forget that a car is just that, a car. Something that's supposed to get you from point A to Point B so you can travel and keep making that paper. If you're going to be spending upwards of 15-20 grand on a car, you might as well live in it too. Heck some people do live in their extravagant pieces of crap. And those hip hoppers don't even own those cars they brandish in their videos. They're rentals.

I can tell you right now that I bought my hoopty for $1,500 straight cash and despite a few hiccups here and there, it's still going strong for nearly three years. And I have every intention of following the Dave Ramsey method for my next car purchase, God willing.

A true baller is one who prides himself on being real. Don't put on a front like you have money with the clothes you wear and don't flaunt a car that you know full well you can't afford just to look like you're paid. Be reasonable, get a car you can afford, in cash! You don't have the cash right now? Ride the bus, a bike or whatever to get to school and your job and WAIT til you earned the money to get it. Done deal. The less money you spend on unnecessarily lavish things like a form of transportation, the more you can use your money for more important things: your family, your community and your future. 

Til next time, stay smart and stay ballin'.

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