A Florida woman says her husband’s “terrible” decision to buy an electric car she couldn’t afford has upended her more than $20,000 on her car loan. Dave Ramsey responds

‘We’ll call this debt a stupid tax’: A Florida woman says her husband’s “terrible” decision to buy an electric car they couldn’t afford left them flipping more than $20,000 on a car loan. Dave Ramsey responds

Ashley from Jacksonville, Florida is facing a financial dilemma due to the “terrible, terrible decision” her husband made.

on episode On “The Ramsey Show,” she described how her husband switched from a modest, fully paid-for car to an expensive electric vehicle (EV) that transformed their financial situation.

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Dave Ramsey couldn’t believe how expensive the car was.

“$72,000 for a Kia!?” He gasped.

“He’s not good at this.”

Even though he recently paid off his car, Ashley says her husband decided to upgrade to an SUV for $32,000. Then the dealer convinced him to trade in his new set of wheels for an electric car he wanted — a KIA EV 6.

“We are not in a financial position to buy that car,” she said. “It’s the only one currently working.”

Ashley says they still owe $62,000 on the car loan and the dealership only offered $40,000 to buy back the car. In other words, the car has Negative equity.

Meanwhile, the couple’s monthly car payments are $1,200, which is roughly equivalent to their $1,500 rent.

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Car loans and sunken car values ​​are notable trends. American consumers have caught on $1.61 trillion in auto loan debt As of the fourth quarter of 2023, according to the Federal Reserve Bank of New York.

Meanwhile, electric cars have Missing value Faster than traditional used cars, according to iSeeCars.com analysis. Used electric cars lost 33.7% of their value on average between October 2022 and October 2023.

These trends imply that Ashley’s husband He faces a real challenge. However, Ramsey believes poor decisions have exacerbated the problem.

“He’s not good at this,” Ramsey said. “I think your husband called the same dealer who scammed him the first time and asked them what they could offer him for it, and they said, ‘Oh, we’ll catch this guy again.’”

Ramsay suggested to Ashley and her husband that they sell the car privately. A quick look at listing sites by co-host George Kamel at the time revealed that the car could sell for around $50,000.

“stupid tax”

Ramsey recommended that Ashley and her husband try to sell the car for $50,000. This would leave $12,000 of negative equity on the car loan that they would have to cover. He suggested taking out a personal loan to cover the rest.

Fortunately, the couple does not have a lot of debt besides the car loan. Ashley claims her credit card debt is less than $2,000. Meanwhile, they have savings of $4,000 to $5,000, and her husband earns $90,000 a year. Ramsey believes this financial situation provides enough flexibility for them to take out a personal loan and buy a cheaper car to get rid of the expensive Kia.

“We will call this debt the ‘stupid tax,’” he said. “And this is what I have to pay when I do something stupid.”

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This article provides information only and should not be construed as advice. They are provided without warranty of any kind.

(tags for translation) Auto loan

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