I-Like-To-Bike

But NOBODY is arguing for any sort of "entitlement" to a new car. The crux of the issue is the use of provocative wording in a thread title dreamed up in order to stimulate the usual suspects to respond.

No real world cars, bicycles or LCF issues was raised to debate or discuss. Maybe the next rhetorical question/issue? How many angels can dance on the head of a pin?

RPK79

None. Angels have horrible rhythm.

I-Like-To-Bike

So what? Lack of rhythm shouldn't be a disqualifer. Aren't all angels entitled to dance?

cooker

Au contraire, mon frère, the title was not dreamed up by the OP, it comes straight from the eponymous Dave Ramsay video, and in the very first minute he raises the notion that some people may feel they are somehow “promised” a car or a lifestyle they can’t afford.

So the rest of us are on topic, discussing the subject at hand, and as usual, you have deviated from it and instead are discussing us.

RPK79

Only on special occasions, like weddings.

I-Like-To-Bike

The provocative title was posted on LCF by the OP, not Dave Ramsey.

The Dave Ramsey video and its content and the issue of new car vs used car value is about Living Car Free only in the imagination of those who insist on raising Car Talk issues.

cooker

There are barriers to living car-free in a culture where so much energy and money is directed at promoting and supporting car culture. People who live car-free, or aspire to, are bucking those cultural norms and pressures, and this forum functions in part as an educational resource to help people see beyond the cultivated mind-set that entraps so many people into being slaves to their car loans.

Roody

Titles are supposed to be provocative, so get over that. Two issues that interest me:

1. As as you say, nobody really feels that they're entitled to be given a new car. But many people feel that they're entitled to a decent standard of living, provided they work full time. For most Americans, a decent salary would include the ability to buy a car, if they want to have one.
2. In some cases, it really is impossible to work full time without a car. Job sites are often located in commercial or industrial zones, with no nearby housing and no bus service. This is the way that we (society, government, collective consciousness) have set up our world--to be accessible only by car. In such a world, a car does seem to be a necessity more than a luxury. Since employment "requires" use of a car, workers understandably feel entitled to make enough money to pay for a car.

Dave Cutter

I was unaware of luxury having a gradation.

Once again.... how do you assign a gradation to entitle? Ether a person is entitled to pursue their ideas... or they aren't. Affordability is always an issue for the individual. It isn't up to you or anyone else to determine who can afford what... and when.

tandempower

Except credit rating bureaus and lenders?

cooker

You're entitled to pursue whatever you want, but you aren't always going to get it.

Dave Cutter

That's right. Entitlement does not imply a requirement for someone else to provide for you.

zonatandem

In these days of buying a TV, mattress, car or even anew bicycle 'on time' is not economically sound.
Have NEVER had a car loan . . . bought used cars for cash. Have done a couple years without a car, and yes it is not convenient, but traveled by bike to work or by bus if necessary.
You will never get ahead financially as a working person by borrowing money at exhorbitant interest rates to buy something you 'want'.
We are being raised without figuring out how interest payments affect our spending habits/budget.
A credit card can be useful and less hassle than a checking account IF you pay off your bill fully each month; you can even generate 'cash back' for using the card.
At age 81 now, I have never paid interest except for purchasing a home.
'Want' and 'need' are two different things . . . and don't just mean the spelling!

Dave Cutter

"Credit rating bureaus and lenders" don't made decisions for others. "Credit rating bureaus" merely collect and redistribute credit data for a fee. And "lenders" only manage their product [loans] in ways to help assure a profit for their investors. Most [almost all] high-end cars are purchased without the use of ether. And plenty of other cars are also bought with cash... or with less conventional loans.

Dave Cutter

When purchasing with a credit card... the vendor pays a fee for the privilege of accepting the purchase price. Often that fee can be as much as 7% of the purchase. When making a purchase of a high dollar item (say a new CF bicycle at the LBS) it might be worth while to discuss this with the LBS owner. Even just a 4% discount for paying cash could be beneficial for both the LBS and the cyclist.

I-Like-To-Bike

Discount for cash arrangements may be in violation of legal agreements/contracts that merchants make with the credit card companies that permit the merchants to accept credit cards and get prompt payment from the credit card companies.

Dave Cutter

Yep.... and those bank police are EVERYWHERE too.

Dahon.Steve

+1

You said it better than me. Good one.

gerv 

Yes... this is a good one but IMHO this forum is less an educational resource than a lonely outpost in a far galaxy of internal combustion...

tandempower

You said the following: "It isn't up to you or anyone else to determine who can afford what... and when." and my response was that credit rating bureaus and lenders do in fact decide 'who can afford what . . . and when.' If they don't think you can afford it, they don't (or at least shouldn't) recommend the loan.

The thing about trading paper is that it becomes less important whether the borrower can actually afford to pay back the loan in the long run than it is to be able to convince a secondary investor/underwriter to buy the debt in order to take a chance on the borrower repaying or not. If the borrower eventually defaults, it doesn't matter because the lender already got money for the loan by selling it to a third party.

From a manufacturer's point of view, such arrangements are like printing your own money in that you can effectively produce whatever product you make, such as a car, and then give away the product in exchange for a promissory note, which can then be resold. Even if the buyer doesn't have the money to pay off the loan, the promissory note gives the third-party leverage to harass the borrower to repay whatever they can.

E.g. I give you a car and in exchange you promise to pay $25,000 over the next so many years. Then I take the contract you signed and sell it to a debt-collector for, say, $15,000. Now the debt collector might be willing to invest $15,000 for the opportunity to squeeze up to $25,000 out of you (or more if penalty fees, late fees, etc. can be added to what you owe). So all I really have to do is raise the price of the car high enough to get the money I want plus entice a third-party to buy the debt-contract from me. Then I get $15,000 free and clear and it's up to the debt-collector to squeeze at least that $15,000 out of you.

What happens if you never pay back even the full $15,000 that I got from the financier? I still keep the money and the financier has to argue with you about who gets the car and what happens to you for not repaying the debt.

Instead of setting up situations where debtors and creditors squeeze each other for money, why not just eliminate such debt-spending altogether and require businesses to sell their products for cash or not at all. Let financiers help people to save up money instead of lending them money they may eventually default on. This way the economy wouldn't fill up with products that no one can actually afford and send out the false message that these products and lifestyles have something to do with freedom and prosperity rather than indenturement and debt, as is really the case.

Dave Cutter

I've done a little collecting (I have some history in banking). Bad loans NEVER EVER... EVEN ONCE sold at such an exchange as 60%. Selling a bad loan at 8 cents on the dollar is more likely the case. And even buying debt at pennies on the dollar doesn't automatically mean the collector will show a profit. Interestingly... underwriters and actuaries do amazingly accurate work. Before changes in [government imposed] regulations... defaults were a fractional expense.

So... your solution to government over-regulation that already cost the general public billions and billions of dollars.... would be even MORE crippling government regulation. Most of which... you'd impose on an already dying manufacturing industry?

In the 1940's through the 50's banks paid an interest rate to depositors of 1.5%. And the lent the money to borrowers at 3%. And this was AFTER the massive regulations imposed because of the bank crashes during the depression. Simple solutions work the best. But we can never go home. Expect everything to continue to become more complex.

Smallwheels

Stop it! All anybody wants is logic, fairness, and sanity from government. Unfortunately we don't get that. Bad regulations are easy to spot and need to be removed. Better regulations need to be put into place. Since most government is corrupt this will likely never happen.

Dave Ramsey has some good ideas but he has very little compassion and even less understanding about how the world works for people who are poor. Many explanations for why someone might need a car have been listed here and they are true. It is these things that Dave Ramsey doesn't know about or care about. He is correct about people living within their means.

The problem with living within our means is that our expectations and our reality sometimes don't match. The USA has been devastated by criminality in the governmental and financial world. Corporate self interest through bribes and favors of congress allowed manufacturing to leave the USA. It's the tragedy of the commons on a large scale.

Americans have an expectation of how our lives should be. It is not at all unreasonable. We are brought up believing we are in the greatest nation on Earth. We are shown exactly how a good life should be and are told that all of us can have it, if we get an education and work hard. This is now a lie!

I don't blame people for reaching out for something they really want because it makes them have a better life. If that guy spoken of in the video (Jose) really loves having that car at that price then let him have it. He made his decision and is living with it.

What I didn't hear on the video was the background of Jose. Did he have a college degree? Was he following the path to prosperity we've all been told would work? Dave said that "If you want something you get on the business end of a shovel." This car owner Dave is criticizing is working at a desk in a clinic. Does Dave even know what that job entails? I doubt it.

Dave also said the guy was below average earning half of the average income for someone in the USA and said: "...so what you believe about anything, nobody cares." Later he implied that anybody working at a low paying job at an older age was a loser. I found that particularly insulting. Where are the jobs for all of those people who are older and should be earning the average $50,000 per year? How long would the USA function if everybody earning less than $50,000 per year didn't show up to work for a couple of weeks? The nation would crash.

We don't consider the USA the third world. We aren't there yet but we certainly are not living in prosperous times. I doubt anybody feels entitled to a car. What they expect is to live a good enough life where they can get a good car and still enjoy their lives without feeling like they are a slave just barely surviving. That is the American dream. The dream continues but the ability to have it is much harder for most people because the corporations have moved our dream to other countries.

Dave Cutter

I live in the rust belt.... an area of the Midwest that used to manufacture. But the EPA... has closed most manufacturing. Far too many items just can no longer legally be manufactured in America. Do you really believe "the corporations" came up with the idea to have the EPA shut down their plants?!?!?!?

Over regulation has killed American industry... and banking.

cooker

What are some examples of products killed by the EPA?

Dave Cutter

What... you've never been to America? Or never realized this is the case? Haven't heard that some people would like to build a pipeline (Keystone) in America? Or [do you] just want to kill the thread with link after link of conflicting sources of Internet misinformation?