Buy My Dream Car?

Summary

The Ramsey Show Highlights: Episode Summary - "Buy My Dream Car?"

Episode Details

• Title: Buy My Dream Car?
• Host/Author: Ramsey Network
• Release Date: May 23, 2025
• Duration: Under ten minutes

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Introduction to the Caller: Nathaniel's Dilemma

At 00:10, Nathaniel calls into "The Ramsey Show Highlights" to seek advice about a significant financial decision. He shares that he recently received a substantial raise at his job and has identified his dream car—a Volkswagen Golf GTI—as it is being discontinued this year. Nathaniel is torn between purchasing the car now or continuing to invest his money into savings.

Nathaniel (00:10): "I just got a pretty significant raise at my job, and I was made aware that the dream car I've always wanted to buy is getting discontinued this year. And I was just curious if it makes financial sense for me to buy the car or chuck it all into savings like I've been doing."

Initial Reactions and Clarifications

George expresses enthusiasm upon hearing about the car, assuming it might be a truck—his preference. Rachel questions the discontinuation specifics, leading Nathaniel to clarify that it's the manual transmission version of the Volkswagen Golf GTI that's being phased out.

Rachel (00:30): "What are they discontinuing these days?"

Nathaniel (00:33): "It's a. It's a Golf GTI. Volkswagen Golf, but they're stopping making it in a manual transmission and pull one up."

Financial Breakdown and Assessment

Nathaniel provides a financial snapshot: he earns approximately $125,000 annually, has no debt, rents his home, owns his current car outright valued between $13,000 and $15,000, and has $15,000 in savings. He estimates the new car, including taxes and fees, to cost around $35,000 to $36,000.

Nathaniel (00:55): "It'll be right in the neighborhood of probably after taxes and title and fees and everything, probably about 35 to $36,000."

Expert Analysis and Guidance

George commends Nathaniel's financial standing but raises concerns about taking on a loan, especially since Nathaniel plans to buy a house soon. He emphasizes that taking a loan for the car might not be the wisest decision given his financial goals.

George (01:02): "How much do you make a year, Nathaniel?"

Nathaniel (01:05): "I make about $125,000 a year."

Rachel reinforces the idea that incurring debt for the car undermines the notion of "easily affording" it.

Rachel (02:48): "Nathaniel, you have an incredible income and incredible future. I just want to change your language from I can afford meaning a payment to I can afford meaning in full, in cash."

Dave interjects humorously but underscores the practicality of Nathaniel's decision, highlighting the transient nature of such "dream" cars in the market.

Dave (03:25): "Nathaniel, I would get a different dream. I don't think this car is worthy of a dream."

Further Financial Considerations

George advises against purchasing a brand-new car unless one has a substantial net worth, suggesting instead that Nathaniel consider a used Volkswagen GTI. This approach would require Nathaniel to save an additional $10,000 to accommodate the purchase without compromising his emergency fund.

George (05:02): "We say not to buy a brand new car unless you have a million dollar net worth, which you do not have. So I would look at a used Golf GTI and figure out how to cash flow a used version, which would be probably what, maybe 25,000."

Nathaniel acknowledges the practicality of this advice, noting the rarity of the specific manual transmission model he desires.

Nathaniel (04:46): "Yeah, I mean, that would work."

Personal Insights and Broader Financial Habits

Nathaniel shares his frugal lifestyle, explaining that he prioritizes saving over typical leisure expenditures. He also touches upon past financial endeavors—flipping cars as a side hustle—which were hindered by familial disagreements affecting his net worth.

Nathaniel (08:12): "I like seeing the money I have in savings continue to go up. The reason that I don't have nearly as much in savings right now as I used to is because I used to flip cars as a side hustle when I was younger and I would put them in my parents' name. And recently my parents and I had a disagreement around my 18th birthday where they decided that they didn't enjoy interacting with me anymore and they refused to give me possession of the cars that I had."

Rachel commends Nathaniel for his financial discipline despite personal setbacks, encouraging him to reassess his spending habits to better align with his high income.

Rachel (08:11): "Well, here's the good news, Nathaniel. You have an incredible income and incredible future...with your income, you're going to be able to save up 50 grand a year if you keep on living less than you make."

Conclusion: Balanced Advice and Encouragement

The experts collectively advise Nathaniel against purchasing the new Golf GTI on loan, emphasizing the importance of maintaining his emergency fund and avoiding unnecessary debt. They encourage him to keep his dream alive by saving towards a used model, which aligns better with his financial goals and current situation.

George (06:06): "So keep the dream alive, Nathaniel. You need to buy a used one here in probably three years when someone's selling it and you need to pay cash for it. So those were our two no GOs. No brand new car for Nathaniel because you're not a multi-million."

Rachel (09:35): "Nathaniel, we're rooting for you, man."

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Key Takeaways

1. Assess Financial Readiness: Even with a high income, incurring debt for non-essential purchases can impede long-term financial goals.
2. Prioritize Savings and Emergency Funds: Maintaining liquidity and savings is crucial before committing to large expenditures.
3. Dreams vs. Practicality: It's important to balance personal aspirations with financial prudence to ensure sustainability.
4. Consider Used Alternatives: Purchasing a pre-owned version of a desired item can offer financial relief without compromising on the dream.

Notable Quotes:

• Rachel (02:48): "You can't easily afford the car if you have to go into debt for it."
• George (05:02): "We say not to buy a brand new car unless you have a million dollar net worth, which you do not have."
• Rachel (08:11): "With your income, you're going to be able to save up 50 grand a year if you keep on living less than you make."
• Dave (03:25): "Nathaniel, I would get a different dream. I don't think this car is worthy of a dream."

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This episode underscores the importance of thoughtful financial planning and making informed decisions that align with one's long-term objectives. Listeners are encouraged to evaluate their financial positions critically before pursuing expensive aspirations.

Transcript

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[Nathaniel]

Hi there. So I just got a pretty significant raise at my job, and I was made aware that dream car I've always wanted to buy is getting discontinued this year. And I was just curious if it makes financial sense for me to buy the car or chuck it all into savings like I've been doing.

[George]

Wow. I hope it's a truck. George is going to be a big fan of that.

[Rachel]

What are they discontinuing these days?

[Nathaniel]

It's a. It's a Golf gti. Volkswagen Golf, but they're stopping making it in a manual transmission and pull one up.

[George]

George, is that.

[Nathaniel]

Yeah.

[George]

You've seen me an image.

[Rachel]

Is it like the hatchback?

[Dave]

I thought I was the only one that actually knew what it was.

[Rachel]

I know there's 40 hatchbacks.

[George]

Look at that. Very European.

[Rachel]

Is it like souped up? What's this thing going to cost you?

[Nathaniel]

It'll be right in the neighborhood of probably after taxes and title and fees and everything, probably about 35 to $36,000.

[George]

All right. How much do you make a year, Nathaniel?

[Nathaniel]

I make about $125,000 a year.

[George]

What kind of debt do you have?

[Nathaniel]

I have no debt. I. I rent and I own my car outright and I have about 15,000 in savings.

[George]

Amazing.

[Dave]

What is your car worth that you own outright?

[Nathaniel]

Probably 13 to $15,000.

[George]

Okay. So half of it.

[Dave]

Basically have almost all this ready to go.

[Nathaniel]

Yeah. I would be getting a loan. I want to buy a house here pretty soon, and so I'd be getting a loan on the car to build my credit. I'm 18, so my credit score.

[Rachel]

We were doing so well.

[Dave]

Nathaniel, George is breaking out in a red man.

[George]

George, breathe. Just have another deep breath.

[Dave]

Just explain to him why he doesn't.

[George]

Need meditate on the present.

[Rachel]

Are you new to the show, Nathaniel? That helps me understand where you're coming from.

[Nathaniel]

I've been listening to the show for a couple years. That's why I'm actually calling in is just because I can completely easily afford this car. I'd be looking to probably pay it off in about four months.

[Rachel]

You can't easily afford the car if you have to go into debt for it.

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[Rachel]

You can't easily afford the car if you have to go into debt for it.

[Nathaniel]

That is, that is true.

[Rachel]

Oops.

[Nathaniel]

I would just. It's. It's something that I'm looking at as I've had a lifelong dream of this dude.

[Rachel]

You've been alive for four days. What do you mean lifelong?

[Dave]

George, how old are you?

[Nathaniel]

I am. I am 18.

[Rachel]

And I'm just saying give him the.

[George]

Credit of who he is.

[Dave]

Well, his life is a lot shorter than ours.

[Rachel]

But yes, you know, if you were 68 and you're like, I just. Has been my lifelong dream, I'd be like, okay, 18, you haven't been able to drive.

[Dave]

Well, while we're piling on, if I might.

[Rachel]

All right.

[Dave]

Can I be the dad in this?

[Rachel]

Because, Nathaniel, I was just so proud of you.

[Dave]

Nathaniel, I would get a different dream. I don't think this car is worthy of a dream. And at this stage, I thought I was bad. No, no. There's a guy. The guy in the audience is with me. Old guy's bald. He's gray. He gets it. He gets it. Thank you, old dudes. Yeah.

[Rachel]

I mean, listen, Rachel's good car.

[Dave]

It's too much money at this stage.

[George]

It is. Well, the thing you don't have the cash for $15,000. We consider that your fully funded emergency fund. So I would not take money out of that to buy a brand new car. We say not to buy a brand new car unless you have a million dollar net worth, which you do not have. So I would look at a used Golf GT and GTI GTI and. And figure out how to cash flow a used version, which would be probably what, maybe 25,000. So you'd only need to save up 10,000 more for that, would you. Would you agree, Nathaniel?

[Nathaniel]

Yeah, I mean, that would work.

[George]

Yeah.

[Nathaniel]

So the, the, this, the newer generation of it, the, the eighth generation here is pretty rare in the manual, so it's relatively hard to find examples of the one that I would want used, which is the only reason I was looking at new. But. Yeah. Let's see. The. This, what you're saying is what I. Is what I feel myself. Yes.

[George]

Yeah. You can't, you can't afford it. You can't do it.

[Nathaniel]

I do Make. I do make quite a bit. But I also just, I hate ever spending money on anything.

[Dave]

So this car is going to be around in two or three years. Someone's going to get rid of it. It's not a dream for somebody else.

[Rachel]

And it's not going to be more. It's not like a vintage vehicle that's going to be, oh, these are 50 grand now to get one.

[George]

Yeah. So I think to just listening to kind of what you've been saying, Nathaniel and if you can take this advice from a bunch of old people who to George's point have been married.

[Rachel]

Sorry.

[George]

Double. The life of you is that whenever you pin yourself in a corner and you're like, this is the only option. That's true with a job. That's true with the house. It's true with the car where it's like, this is the, this is it, this is it. If I don't get this, it's done. If I don't get this, it's done. And that's just not true. And you make really bad decisions. We have people call the, call the show Nathaniel for houses. Like we found the dream house and this is it and we have to do it, but it's half of our annual income, you know, for, for the mortgage every month. And we're like, okay, that's it's not it. That's not. You pin yourself in a corner with that. So I love the dream.

[Dave]

I do too. And can I also say I love that he wants to buy a manual transmission car at 18.

[George]

Yeah.

[Rachel]

Keep the dream alive.

[George]

That's great. So keep the dream alive, Nathaniel. You need to buy a used one here in probably three years when someone's selling it and you need to pay cash for it. So Those were our two no GOs. No brand new car for Nathaniel because you're not a multi million.

[Rachel]

Do they have like a 2021 model? Nobody, Daniel.

[Nathaniel]

They do. It's the. I'm a little particular. It's. It's just the one specific model that I'm looking at. They don't make too many of what year they did the last one. It's just 2024 is the one that has the.

[Rachel]

Okay.

[George]

Yeah.

[Nathaniel]

So I mean it's basically what it is is I've had a lot of Volkswagens in my life. I used to have my own business rep and I, and this is. Yeah, I have, I still, I currently have. I don't consider it an asset because I'm never ever going to sell it. But I have a 1976 Volkswagen Scirocco that I completely restored and it's perfect and immaculate.

[Dave]

Nathan. I have a 1972 convertible Carmen Ghia that I'm restoring right now.

[Nathaniel]

So that is wonderful. I had a couple Carmen gears and they're beautiful. Wonderful cars.

[Dave]

Gorgeous cars. If I do say so much love it.

[Rachel]

Can I ask what you do, Nathan? Because 18 years old, making 125 grand is not normal.

[George]

That's true.

[Nathaniel]

No. So I. I do technical support and cybersecurity for the banking industry. So I work on ATMs and servers and networking for banks.

[Rachel]

Did you go to any kind of school for this? How'd you learn?

[Nathaniel]

I have a general associate's degree. That's just. I can't remember what the specific degree is. It's just was whatever they had at the community college I went to. But no, I have certifications and.

[Dave]

How long you been doing?

[Nathaniel]

About a year. I'm about to turn 19 here and I got the job shortly after I turned 18.

[Dave]

This is the American dream right here.

[Rachel]

I think he's part of the Doge. I think he's one of the guys out there.

[Dave]

I was going to say you were a little sassy with him. He might be hacking your accounts as he speaks. The way you talk to him out of the gates.

[Rachel]

Never going to financially recover from this.

[Dave]

Be a little nervous. I feel like a couple clicks and a move of a mouse and you're in trouble.

[George]

Is actually in your bank account as we speak.

[Dave]

George is wiped out.

[Rachel]

I'm actually nervous now.

[Dave]

Yeah.

[Rachel]

Well, here's the good news, Nathaniel. You have an incredible income and incredible future. I just want to change your language from I can afford meaning a payment to I can afford meaning in full, in cash. And with your income, you're going to be able to save up 50 grand a year if you keep on living less than you make.

[Nathaniel]

Yeah, I don't. I. I shop at Goodwill for food or for clothes. I.

[George]

You don't need to do that. Don't do that.

[Dave]

I'd like to see you step your game up and that.

[George]

Enjoy your life a little bit, for sure. So, yes, the thing is, I don't really.

[Nathaniel]

I don't enjoy. A lot of my friends enjoy going out and getting new clothes and getting other things, and that's not really what I enjoy. I. I like seeing the money I have in savings continue to go up. The reason that I don't have nearly as much in savings right now as I used to is because I used to flip cars as a side hustle when I was younger and I would put them in my parents name. And recently my parents and I had a disagreement around my 18th birthday where they decided that they, they didn't enjoy interacting with me anymore and they refused to give me possession of the cars that I had. No.

[Rachel]

So you kind of lost a lot.

[Nathaniel]

Of your net worth right there. And yeah, that was not, that's heartbreaking.

[Rachel]

That's a tough, tough lesson in a broken relationship. Well, I'm proud of you. You're doing great.

[George]

I pray for that to mend over everything for the rest.

[Rachel]

Yes.

[George]

You have a long life to live and I, I hope that that changes course. So I'm sorry about that.

[Rachel]

Thanks for the call. Nathaniel, we're rooting for you, man.

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