Yesterday while I was blowing off steam in the My Total Money Makeover chat room I realized I have an odd reputation in there: apparently I have become the “sell the car” chat regular. We had a newbie to both chat rooms and the Dave Ramsey program in asking about how long it should take to work through “baby step two” aka the debt snowball, which included TWO car notes. One note (auto loan for non-Southerners) was $290 a month, and the other was $390 a month, and the person had already decided to sell the car with the smaller note. He (?) was surprised when I recommended selling both.
Car and truck notes eat up a huge portion of just about everyone’s monthly budget who has them. A hidden cost of carrying a vehicle note is the requirement to carry full coverage auto insurance, with the noteholder being the loss payee. Dave Ramsey likes to joke that most times he does the car theme hour on his radio show it becomes the “Sell the car” hour as he tells caller after caller they need to sell the car or truck that they still owe on. And in at least 99.99% of the calls I listen to, I agree with that advice.
All that being said, we do still have the stupid truck note in our monthly budget, and most of y’all know just how much I hate that. We’re not being hypocrites here, though - we can’t sell the truck until hubby gets home from his tour in South Korea next month. I do have the “For Sale” signs already in preparation for the Big Event. Selling the Chevy truck and paying off the stupid truck note will make us “debt free but the house” so that makes it a Big Event! I’m already happy about it LOL
I think the most depressing phrase I hear is the “You’ll always have a car note” mantra. I’ve carried a note on only two vehicles that I have ever bought. All the rest of them I have paid cash for. So the concept that a person is destined to pay a auto note for their entire adult life is truly foreign to me! Why do people become convinced that they must have a vehicle note?
For the record, the Dave Ramsey criteria for selling a vehicle is if it cannot be paid off within 18 months and the total value of all things that have a motor and wheels is more than half your annual income. If your car or truck note meets either of these, then it is time to sell the car or truck and be free of the chains of that payment.