Dave Ramsey Says Never Finance a Car — Here's Why He Won't Budge
Dave Ramsey is hardly known as a shrinking violet; he has strong opinions about most topics in personal finance — including how you should buy a car. One of Ramsey’s boldest positions is simple: never finance a car.
No, not when rates are low. Not when you’re desperate for reliable transportation. Not even when a monthly payment seems manageable. To Ramsey, a car loan isn’t just a necessity of modern life — it’s a financial trap that keeps you buried in debt while your vehicle loses value every day. Here’s why he refuses to back down.
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First, the Car Isn’t 'Yours'
You’re impressed with your new set of wheels. Your Instagram is full of photos of your latest ride, and you’re no stranger to the car wash. Heck, you might even have a nickname for it.
Unfortunately, Ramsey has some characteristically blunt news for you. If you financed your car, he says it isn’t really yours. Ramsey Solutions, his personal finance company, puts it this way:
“Just to be clear, you don’t actually own a car when you finance. The bank (or whoever else lent you the money) owns the car. They just let you drive it around — as long as you make your monthly payment, that is.”
In Ramsey’s view, until the loan is paid off, you’re driving an asset controlled by the lender — not building ownership or wealth. And, he argues, that’s only the beginning of the problem.
Cars Are Depreciating Assets
Taking to X (the social media platform formerly known as Twitter), Ramsey expanded on one of his core beliefs: Your car starts depreciating in value as soon as you roll off the lot.
“Things that have motors and wheels go down in value, and I can’t finance them,” Ramsey said. “Because they go down in value ... you get stuck in them.”
The way Ramsey sees it, financing a car is essentially putting yourself into a cycle of debt over something that is losing value every day. Your better bet is to save up, pay for your car in cash, and own it outright.
Unsurprisingly, Ramsey’s stance sparked intense debate in the Reddit forum dedicated to Ramsey skeptics, r/DirtyDave. One user quipped that it was easy for Ramsey to insist on paying cash for cars, since he came up in a time when “you could buy a used car that works like it’s brand new for $1,000. Now ... it’s more like $5,000 or more.”
Still, even Ramsey doubters could understand why he digs in his heels against the concept of taking on debt to cover a depreciating asset.
“Even as a Dave doubter, this one isn’t hard to understand,” said one user. “It’s a depreciating asset that you are getting with a loan that accumulates interest. A wealth killer.”
Why Ramsey Says Car Loans Kill Wealth
To illustrate his point about car payments as a wealth killer, Ramsey invites you to consider a $700 monthly car note. That’s $700 you’re not putting into your retirement fund or investments. Even if your car note isn’t quite that high, the point remains: You’re not putting your money where it serves you in the long term.
When speaking to someone who called into his show, Ramsey drove his point home quite dramatically:
“If you want to be middle class the rest of your whole life, keep a car payment,” Ramsey said. “Mathematically, it’ll just hold your butt right there. It’ll just keep you from succeeding.”
In Ramsey’s view, consistent investing and zero consumer debt are the foundation of wealth-building. Car payments directly interfere with both.
Critics Say the Advice Isn’t Always Realistic
As the Ramsey skeptic on Reddit pointed out, not everyone has the cash to pay for a car outright. Other Redditors mused that only getting a car you could pay for in cash might mean you leave the lot in a clunker that could actually cost more than the car itself in repair fees.
They were joined by commenters under Ramsey’s X post, who reminded him that some cars can be resold for more than the purchase price. Another commenter said they financed a truck they needed for work — otherwise, they’d have no way of making money at all.
Still, one Redditor in the r/DirtyDave forum described a middle path, where people who couldn’t afford a decent car in cash take out a loan — while also emphasizing the need to build financial skills to pay that loan off quickly.
“If you don’t even have cash savings, you pretty much have to get a car loan,” they said. “But then work on paying off that loan quickly and get a safety net. Learn better financial management skills.”
The Bottom Line
Dave Ramsey has a lot of hot takes. One of those hot takes is that financing a car can cool down your potential to build wealth. His advice: Buy the car outright. While some people question the plausibility of his advice, he’s not changing his tune anytime soon.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
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