My Car Lease Is $1,250 A Month

Summary

The Ramsey Show Highlights

Episode: My Car Lease Is $1,250 A Month
Date: July 2, 2026
Hosts: Dave Ramsey & Jade Warshaw
Theme: Escaping a Crushing Car Lease & Reclaiming Financial Control

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Main Theme Overview

In this episode, Dave Ramsey and Jade Warshaw guide a 25-year-old caller facing the burden of a high car lease payment ($1,250/month, including insurance), no savings, and consumer debt. The focus is on practical steps to exit a problematic lease, avoid financial traps, and embrace a mindset shift around car ownership and personal pride.

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Key Discussion Points & Insights

1. The Caller’s Financial Situation

• The caller (“Rudy”) is 25, has $6,500 in debt, no savings, and a $1,250 monthly car payment (lease plus insurance).
• He signed a 3-year lease for a 2025 Toyota GR Corolla about 10 months ago and feels trapped due to high exit fees.

Quote:
"I feel like in a dead end situation and I don't really know what to do to get out of it." — Rudy (00:07)

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2. Lease Confusion & Early Exit Options

• Rudy is unsure about the true early buyout cost and has been discouraged by the dealer’s quoted fee of “seven grand something.”
• Dave points out the confusion between total lease termination fees, buyout options, and regular mileage rules.

Key Advice:

• Contact Toyota Credit (not the dealer) directly for an early buyout number:
  "You need to call Toyota Credit and ask them what the early buyout on the lease is. What can I pay you off today for? That's like the early payoff on a debt." — Dave (01:45)

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3. Determining Car Value & Next Steps

• The car's current value: ~$38,000.
• The possible scenarios:
  • If the buyout is less than or equal to the car’s value, Rudy could finance the buyout, then sell the car to break even or owe little.
  • If it’s more, he may need a small loan to cover the gap.
  • Mileage over-use isn’t relevant at this stage; only the financial payoff matters.

Step-by-Step Explained:

• "Find out what it's worth, then get the early buyout price. Let's pretend that's $34,000. You could simply go to the credit union, get a car loan for $34,000 and pay off the lease. Then you would owe $34,000." — Dave (03:47 and 04:38)

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4. Breaking the Cycle: Mindset & Habits

• This mistake is common among young adults, but it isn’t a life sentence.
• Don’t expect help from organizations profiting off your mistakes:
  "Don't go ask them how to fix it, because they're not. That's like the wolf in the hen house." — Dave (05:56)

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5. Embracing Humble Transportation (The “Beater” Story)

• After escaping the lease, Rudy should buy the cheapest reliable used car possible:
  "Drive something that's three or four thousand dollars. Really the ugliest car and the oldest car you can find that still runs is what you're gonna be driving for a while." — Jade (06:53)

• Giving “beater” cars affectionate names (Bertha, Old Blue, Bessie) normalizes the sacrifice as a badge of financial courage.

Memorable Segment:

• "You need a car that's so nasty that you have to name it...you kick it in the door and say, all right, Bessie, we're going." — Dave (07:07)

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6. Short-Term Sacrifice, Long-Term Gain

• By driving a very cheap car and eliminating the big lease, Rudy can save $1,250/month and change his financial future quickly:
  • "If you will drive like no one else, you can bank 1250 bucks a month. In 10 months, that's $12,500." — Dave (07:39)
  • Lower insurance also adds to the savings.

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7. The Emotional Challenge & Social Pressure

• It feels tough to downgrade to an old car after having something new and flashy—but you adapt, and it builds pride.
• Letting go of caring what others think is essential for financial growth.

Notable Quotes:

• "It’s a hit to the pride. Later on, it’s a badge of honor." — Dave (09:43)
• "High correlation between people who don't give a crap what other people think and those that build wealth." — Dave (09:55)

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Notable Quotes & Memorable Moments

• On the car lease trap:
  "Toyota Financial set this up. That's who screwed you." — Dave (01:20)
• On the real solution:
  "I would expend an amazing amount of energy to get out of this car." — Dave (06:40)
• On the pride and payoff:
  "I'm a grownup, and I did what it takes to be a grownup." — Dave (09:49)

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Timestamps for Important Segments

• 00:07 — Caller describes financial struggles and car lease burden.
• 01:23 — Dave identifies misunderstanding around dealership fees vs. lease buyout.
• 03:47 — Clarifying the true car payment vs. insurance.
• 04:38 — Concrete steps for resolving the lease and selling the car.
• 06:27 — Analogies about banks and self-reliance.
• 07:07 — Humorous segment on “naming” your beater car.
• 07:39 — Calculating savings from ditching the expensive lease.
• 09:43 — Discussion on pride vs. financial discipline.

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Conclusion

This episode delivers practical, step-by-step advice for escaping a car lease trap—demystifying dealership discouragement tactics and empowering listeners to take control. With humor, empathy, and down-to-earth analogies, Dave and Jade emphasize humility, resilience, and the courage to live below your means as the true path to financial freedom.

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Transcript

[A]

Brought to you by the EveryDollar app. Start budgeting for free today.

[B]

So currently I'm just in a little bit. I feel like in a dead end situation and I don't really know what to do to get out of it. I'm currently about 6,500 in debt with personal and credit cards. I have no savings at all and I have twelve hundred fifty dollars a month car note. Oh. That I'm kind of stuck with at the moment.

[C]

Why are you stuck with it?

[B]

It's a lease that I signed about 10 months ago for three years and I wanted to get out of it. I went to the dealership, but just the fees to get out of it are just insane. So I decided to keep the car for the moment.

[A]

Who gave you the fees? The dealer?

[B]

Yeah. Yeah.

[A]

Who'd you sign the lease with? What company? It's who.

[B]

It's a Toyota, but they did it with Visions Credit Union.

[A]

Okay, and so you signed a lease, you got a lease through your credit union?

[B]

Well, it was through Toyota Financial. They hooked me up with Visions.

[A]

Oh, Toyota Financial set this up. That's who screwed you.

[C]

Okay, what's the early termination fee? Do you know what it is?

[B]

It was like seven something, like seven grand something. Because I, I also drove a lot with the car too. So I went, I didn't go over the limit of miles, but for how much? How long I've had the car. I drove it more than I was supposed to.

[A]

Okay, that's not how it works. So someone, they're trying, they're continuing to screw you. So you need to call, you need to call Toyota Credit and ask them what the early buyout on the lease is. What can I pay you off today for? That's like the early payoff on a debt. It does not include the interest through the entire 36 months. Okay.

[B]

Okay.

[A]

And there should be no fees on that other than just what does it take? What. What is the check I need to write today? Okay, what car is this of Toyota?

[B]

It's a 2025 GR Corolla.

[A]

Okay, so look that car up and figure out what it's worth and then get the early buyout price. Have you looked up what it's worth, by the way?

[B]

It's worth about 38,000.

[A]

Okay, so you can, you could get about 38,000 if you sold it. Let's pretend that when you get the early buyout on the lease, 1250amonth for 36 months.

[C]

Hey, what's up, guys? It's Jade. Listen, my husband and I drive used Vehicles. And, and we really do plan on keeping those running for a long time. So we trust Christian Brothers Automotive to take care of them. Their team is honest, their shops are super clean. And what I love is they don't try to upsell us on things that we don't need. I personally feel really confident walking into Christian Brothers because I know that no one's going to try to take advantage of me or scare me into unneeded repairs. Christian Brothers gets it. So schedule a service [e-mail] Ramsey Get 10% off your visit. That's up to a $250 value. See stores for details.

[A]

1250amonth for 36 months.

[B]

It's, it's 700amonth, but my insurance makes it 1250. So it's insane. Okay?

[A]

That's different information, hun. Your insurance is a different thing. Okay? It's not your car payment. Your insurance is not in your car payment. You said you had a $12 car payment. You do not. You have a $750 car payment. Okay, now that makes the numbers better. Makes them worse. It makes me understand the numbers. I didn't understand them at 1250. I couldn't figure out what Toyota had done to you. All right, so anyway, you find out what the early cars were.38,000. You find out what the early buyout is if I write you a check in full today. Okay, then let's pretend that's $34,000. You could simply go to the credit union and get a car loan for $34,000 and pay off the lease. Then you would owe $34,000. You follow me?

[B]

Yeah.

[A]

Or it's $42,000. So it's more than the early buyout on the lease, but it has nothing to do with the mileage. This is simply the financial part of the transaction of what can I pay my loan off for early? That's what this is. Okay. And you compare that to the car. Now if it takes more than 38,000 to buy it out, let's call it 40,000, then you've got to arrange with your credit Union to borrow $2,000 and sell the car to someone for 38,000. And you sell it and you bought, you buy out the lease early, which is paying off your loan early. And that's how you get out of a lease early. And it sounds like you desperately need to do that. Okay. How old are you?

[B]

I'm 25.

[A]

Okay. Yeah. Okay, so. So the number one mistake that 25 year olds make is an expensive car with a Big car payment and a big insurance payment. So you're like a normal 25 year old, but you have discovered that sucks and you don't want to be that anymore.

[B]

Yeah, that's right.

[A]

Okay, so you didn't do anything that almost every 25 year old in America hadn't done. But the trick is you've really got to concentrate and not just listen. If somebody screws you like you went on that Toyota lot and Toyota Financial screwed you, then don't go ask them how to fix it, because they're not. That's like the wolf in the hen house, dude. You don't even know what that means. Okay, but that's like, you know, I get you. Yeah. It's like asking an alligator if he's hungry. You know what I mean? It's like seriously.

[C]

Right, Right?

[A]

Yes. Yes. Come on in. I will eat you. Yes. I will help you. I will screw you again. Says Toyota Financial. Yes.

[C]

Right. Well, good thing he called us, because now I feel like he's got the next moves to get out of this. It just took him a second to get there.

[A]

Yeah. Rudy, I would expend an amazing amount of energy to get out of this car.

[C]

Yes.

[A]

And not just accept laying down that this is your fate for the next 36 months.

[C]

And part of that fate is after this car is sold. Now he's in the real business of driving a beater. Driving something that's three or four thousand dollars. Really the ugliest car and the oldest car that you can find that still runs is what you're gonna be driving for a while.

[A]

Until you need a car that has to have a name. It's so bad, you have to name it Bertha. Old Blue Bessie. Whatever it is, if it doesn't have a name, it's too good a car. You need a car that's so nasty that you have to name it. And then you walk out and you kick it in the door and say, all right, Bessie, we're going. Start up, Start up, Bessie. Here we go. You gotta have the Blue Goose. You gotta have whatever it is. Right. And that's for a short period of time. But if you will drive like no one else, you can bank 1250 bucks a month. In 10 months, that's $12,500.

[C]

That's gonna feel good.

[A]

Then you can get rid of old Bessie.

[C]

Right. Because your insurance is gonna go down too.

[A]

Yeah. Because you don't even get insurance for Bessie. Poor Bessie. She's not even worth health insurance.

[C]

No, she's not even. She's not even worth replacement costs.

[A]

We're just gonna put a bullet. We're gonna put a bullet in her. If she pulls over to the side. That's it. Yeah, that's it. I mean, this is the way you have to think. And I did that. I drove a piece of crap when we were broke and getting out. And then I got a little better piece of crap, and it was so much better that I didn't think it was a piece of crap. Although it was a piece of crap still. Yeah. I mean. And that's what you do for a little while so that you never have to do it again. It's not a way of life, but it's how you get out of these messes that we all find ourselves in. When you wander into the finance office at Toyota Credit, we've all done it.

[C]

We've all done it. I remember when I met Sam, he had a Jeep Grand Cherokee and he had finally made the final payment to pay it off.

[A]

And they're not a good car.

[C]

It's not a good car. But he paid it off. And I'd never known anybody who. I'd never seen anybody who didn't have a car note. And don't, you know, he went right down there to the Hummer dealership and

[A]

bought a H3 because we couldn't stand not having a car payment.

[C]

Well, it was. The thought was, once your car hits 100,000 miles, it's going to start breaking down. It's going to start messing.

[A]

You know, Not a Jeep Cherokee. Once it hits 10,000 miles, it starts breaking down.

[C]

Yeah. And so we've all done stupid things, but the point is, I remember the feeling of then selling that H3. You're used to riding pretty nice.

[A]

Y' all were. Y' all were Miami Vice, man. I know y' all in Miami riding

[C]

around in the Hummer and then had to sell that. And you get used to it. My point in telling that story is it feels nice to drive a new car. It is a hit to the pride when you have to start driving something older and sell your things. But you do get used to it. Human beings are very flexible at the time.

[A]

It is a hit to the pride. Later on, it's a badge of honor.

[C]

It is. Yes.

[A]

I'm a grownup, and I did what it takes to be a grownup.

[C]

And I don't care what you people think about it.

[A]

Amen. High correlation between people who don't give a crap what other people think and those that build wealth. If you're worried about what other people think you're going to be poor most of your life. Create your free every dollar budget today. The simplest way to budget for your life.