I have a car/toy fund that I stick money into each month. It's invested in my company stock which I get a 15% discount on. When I decide to buy a different car I sell that stock. Sometimes I see that too much money has been going to the stock and I move it over to my emergency fund, which is invested very conservatively.
If I was to get into trouble I could sell the cars, reduce monthly amount taken out for my car fund, or dip into emergency fund.
If I was to get a 0% loan then I would have a monthly payment and that money would be earning 0% on a declining asset. Instead I'm investing in a stock that even if it breaks even I gain 15%. If it goes belly up I still have both cars paid off.
Thought the same thing myself before I got laid off 2 weeks before 9/11/2001. Try getting a job then. I had bought the 'expected' toys for a recent college grad, was shopping for a new car because mine was pretty close to being 'on it's last leg' and looking at engagement rings. Laid off for 9 months, then worked a year and a half getting paid 2 year degree wages and paying student loans on a 4 year degree.
Doing your taxes while unemployed was a huge eye opener...I made how much? Where'd it all go....oh...there, and there, and there...
Scrimped and saved well enough while working that 2 year degree job that I got mostly straightened out and got engaged. Got a job in my field before getting married and we've mostly lived on the lessons I learned ever since. Did fall into the pitfall of borrowing for a new car. Finally replaced that car 'on it's last legs' in 2001...3 years later with no issues in between. Figured we could splurge a little since my wife's car would be good for a few years. Then 3 months later she plugged a deer and totalled it (car wasn't worth much, but ran fine and was in good shape). Had no choice, another car loan. A couple years later, wanted to upgrade my car (thinking of kids), realized how much I owed vs. how much it was worth (not upside down, but wouldn't come out of it with much cash).
Spent a couple years grinding hard on the car loans and got them paid off. Fast forward...last winter I paid cash for a brand new vehicle (only bought brand new because used cars were so expensive at that time, unless you were buying a 5 year old car, wasn't hardly worth it to buy used), and we still have 6 months take home in the bank, more in investments.
'it won't happen to me' is the biggest mistake we all as humans make. We are horrible at quantifying probabilities.
Not going to tell you what to do, but I've been there. $h!+ happens that you thought never would.
Even with 0% interest when you factor in inflation you are coming out ahead because money will be worth less than in the future.
Depends on what it's being used for. As someone said, for a car (which is about the only place you're going to get a 0% loan), you kinda have to figure in the declining value of the asset as a pseudo-interest rate. If you buy a sports car and wreck it a week after buying it and don't have full coverage, you will owe more than it is valued at, depending on how much you put down.
I apprecieate most of Dave Ramsey's advice, but I realize he is very conservative in his money management advice. I've read his Total Money Makeover book and I catch his radio program periodicallly. Most American's would be wise to heed his advice as opposed to living their lives at risk of financial ruin if they lost their job or had some other unexpected life event.
Ramsey went bankrupt by borrowing too much so yes, he is overly sensetive to credit. I know if I called his radio program, he'd say I should sell (or pay-off the mortgage) on the sole rental property I own. He doesn't believe in not owning rental property 100% clear. I can appreciate that line of thinking, but sometime his advice can be too simplistic IMO as certain circumstances dictate a different POV when you look a person's entire financial situation. That said, it doesn't negate his overall message and always encourage anyone seeking financial advice to give him listen.
I had a friend who was cheap and had a fleet of three $500 cars to drive. He paid little insurance and little in plate fees. Whichever one started is the one he drove to work. All three rattle traps were rust buckets.
True. He's pretty militant about doing his whole system. His advice is also very tailored to those already in the ditch, financially, who have shown they maybe don't make the best decisions. As such, the extremely risk averse position maybe makes sense. If you can make wise choices, you can be okay a little more wiggle room. The overall facts behind his advice remain (you generally spend more with a credit card than with cash, costs of loans, etc.), but if you're in a good spot, you can afford to make those choices. Dave himself will say that. He admits to driving a 'very nice car', but has the ability to do that because of where he is financially. If he weren't, he wouldn't.