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Dave Ramsey is a personal money management expert, US national radio personality and author of the New York Times bestseller The Total Money Makeover. For more financial advice and a special offer to our readers, please visit or call 1-888-22-PEACE.

Is leasing throwing money away?

Dear Dave,

We've leased our last couple of vehicles, and to me it seems like we're just throwing our money away. At the end of the term we have nothing. What is your take on buying new cars or leasing? What is the best way financially to go about getting a vehicle?

- Anna

Dear Anna,

To start with I've got to tell you that I'm a boy, and I love cars. But when you run the numbers, you find that automobiles represent the largest purchases Americans make that goes down in value.

Kiplinger's Personal Finance magazine says that a new car will lose 60 percent of its value in the first four years. Turning $30,000 into $11,000 is not a good plan! So financially speaking, and common sense agrees, that if you pay cash and buy a two-year-old car with very low miles in great condition, someone else has already taken the bulk of the loss in value.

This is what the typical millionaire does. Very few millionaires lease cars, or as we call it, "fleecing" a car, because it's the worst deal on the car lot. Consumer Reports and Smart Money magazine, as well as the Consumer Federation of America have all done articles on the "fleece" and the fact that it's a rip-off. The only one who comes out to the good in an auto lease is the dealership. Have you noticed, too, how they never mention those high interest rates you're getting roped into?

Buy a two- or three-year-old or older vehicle, and pay cash for it. You'll never be able to build wealth when you're throwing your money away on car payments!

- Dave 

When to just let a house go

Dear Dave,

My wife and I each had our own houses before we got married. We've tried unsuccessfully for five years to sell hers, but the market there is really bad right now. We owe $43,000 on it, and it's been appraised at $62,000 so that's what we're asking. Any ideas on how we can get rid of it?


Dear Mark,

Five years is a very long time for a house to be on the market. From what you're telling me, this home is located in a very distressed market.

Basically, market value on a house is what a willing buyer will give a willing seller without duress. It looks to me like values have dropped but your price hasn't.

I hate to say it, Mark, but it sounds like you've got two choices. You either become a landlord, or you slash the price on the place. If you rent it you'll still have the problem of an extra house on your hands, but at least you can see some income in the deal.

But considering the housing situation you've described, you may have to let it go for the amount of the loan. Sometimes there are no tricks to selling a house in a depressed market except pulling the trigger on the price!


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Celia Sankar

by Dave Ramsey