Buy A Car Sooner To Avoid Increased Prices Due To Tariffs?

Brought to you by YRefi. Refinance your defaulted private student loans today at YRefi.com slash Ramsey. My question is, my husband and I were planning on purchasing a new car next spring, but we are wondering if we should move that purchase up and buy now, based on the fact that car prices might see a spike because of the tariff. Interesting. Do you have the money now? Above your opinion on where we should pull it from, we do have a few different places we could pull from to get money now. Okay. So if we bought the car a year from now, which was our initial plan, my husband has some stock that was given to him when he started his new job and that stock will be vested next spring and be at the long-term gain position. So that was where we were going to pull the money from to buy the car. How much? If we wanted to buy now, it'll be about $35,000. Brand new? I don't think we'd buy brand new. I don't know. I mean, I think we could, but I- Oh, I'm not asking you- We're looking at a band of buy-in like two years old. Well, I'm not suggesting that you do. I was just curious because your question is based on tariffs. And so there's two points I want to make really quick, and Jade will continue to guide you here, but on this tariff issue as the sole reason to do this, and that's what you've presented. Number one, we have no idea what the tariff situation is going to be. None. A month from now, we don't know what it's going to be. Two months from now, really, we do not know. But media is pushing. You're right. Media is pushing for people to make these purchases now. I've seen the articles. It's everywhere. Well, I have too. And by the way, it's already too late. So if you're going to get a car that costs will be affected by tariffs, and most cars will, we just don't know what that's going to look like. And a year from now, it could look very, very different. And so this rush to move funds around, I think it's risky is the first thing I wanted to make the statement on the tariff. The second thing is that the tariffs themselves will not directly affect the price of a used car. A used vehicle. Yes, because it's already been- You don't- Made. It's been manufactured. You don't think it'll- No. The demand will go up for used cars? The demand could go up. It might. That's why I said directly. So, you know what I'm saying? I just want to make sure, because Jade's right. You see all these articles and it starts to freak you out. And you go, okay, first of all- Exactly. The actual tariffs will raise prices on newly manufactured cars. Okay? So if you're buying a used car, that's a separate issue. That's right. You understand what I'm saying? Will demand change? Certainly. But it's not going to be a direct cost on the tariff. So I wouldn't be wringing my hands, number one, is the whole point I'm trying to make. Back to Jade on where you'd pull it from, because I think you've got to be smart about that too. Yeah. So the initial thought was, hey, we're thinking about spending around $35,000 on something, what Ken and I would suggest as used, unless you tell us something about your net worth that will make us change that. And you were going to use that vested stock next spring. If you were to do it today, tell us what that would look like. Would you be spending the same amount of money and where would the money come from? Yeah, I would probably spend about the same. We could still sell the stock that is from my husband's company. It just would be short-term gain. And we also have some other investments, just like S&P 500 investments that we could sell. That is long-term, but it has a much higher gain. Or we have about $30,000 in just a high-yield savings account that is labeled for other things. And we could relabel it and use it to buy a car. What's it labeled for? Is it your emergency fund? No, we have a separate emergency fund. This $30,000, it kind of comes from two accounts. One is vacations that are for next year. So we haven't actually started planning it. And then the other half of it is from what started out as sinking funds, but each month we haven't ever had to pull from the sinking funds to actually use what they were intending for. So it's kind of become an emergency fund for the emergency fund. Got you. Next question is, what's your guys' income? Not including the stock that vests every quarter, $185,000. $185,000. Okay. So the $30,000 to spend that on another used vehicle is totally fine within the parameters of what you have here. My thought would be to go ahead and let the stocks vest and then pull them out later on in the spring as you were going to, whether you use it for this vehicle or not, just because we wouldn't say to invest in stocks. So I'd move it to mutual funds or move it to whatever your next big thing is investment-wise, but I'd put it in mutual funds, not single stocks. So that's play number one. And play number two is, yeah, if you have the money today, it's sitting in additional savings. And if you and your spouse both decide, hey, we have this money. It's kind of earmarked for vacation. It's kind of earmarked for nothing. Do we want to go ahead and use this money to spend it on a vehicle today? Do we need the vehicle today? If you guys decide that, there's nothing wrong with that. I wouldn't do it. We don't need the vehicle today. The reason we want to do it next year is our oldest will turn 16 next year. Got it. And we have one big family car and then we have the very first car that I ever bought 19 years ago that will make a great teenage car. Got it. Then don't do it. So just wait. Yeah, because what I was going to say next is you don't do this out of fear. You do it out of, are we ready to buy the car today? That's the reason you do it. And so if you're like, hey, we don't need it yet, then don't do it. Let these stocks vest. Regardless of what you do, I'm pulling it out of those stocks once I can, or I'm transferring it to mutual funds, that sort of thing. But either way, whether you do it today or tomorrow or next spring, you have the money and don't do anything out of fear. Yeah, I was just doing a little research. I wanted to get the general opinion on used car prices. And again, this can change in a matter of months, Allie, but I wanted to tell you, I think the experts are predicting, take this for what you will, that it's going to be relatively stable in car pricing. So I was listening in. I love Jade's advice. Don't let this money burn a hole in your pocket because you feel like we got to do this. And that media pressure is real. Oh my gosh. Of course. You aren't clicking on it if it doesn't concern you. Yeah. There's an old phrase they use, and Stacey told me this because she has her master's in broadcast journalism. If it bleeds, it leads. Oh, 100%. And that's true of just about any topic. And then all the car commercials are going, we're going to stand by our payment. We're not raising our payment. Everybody's kind of talking about it and it's making you look around and go, well, maybe we should go with them. They're not raising their prices. And one little nugget on this, because I think this is worth saying, and actually I'm kind of intrigued to see what, you're the money saver of the two of us for sure. Here's what I've learned. A year from now, when they actually want to buy, they're going to be some people who overextended themselves. 100%. I've just promised you. Always. There always is. I can't promise you what the interest rate will be. I can't promise you what Trump's going to do on tariffs, but I can promise you a year from now, there are going to be some people who are driving around a car payment of $700 or more. We know this from the data and they got to unload it. And here comes Allie and her family with Kazash. Kazash. Kazash. I can get a cashier's check and I can frame it. I can spray some perfume on it. What you want? And there's some people who need to get out of that car. And there's always an opportunity for somebody who is in a cash position to, and I'm saying this, steal a used car. Yep. You're right. Ken, you're not wrong. I mean, we've seen the default rates on car payments. They've been steadily rising since. And guess what? That means a year from now, would you predict there's going to be a storm there? These things go in cycles. It's happening now, I would say. I don't know if I'd call it a storm, but I would say that these things have a way of balancing themselves out a lot of times, if you will. The point is there will always be a very nice used car that is available. That's right. At a discount. That is correct. You know what I mean? Yeah. So I'd be paying attention to Facebook and all where people are like, got to get rid of my car. And then you come in like on the white horse, you know, saving the day. That's right. With that cashier's check. I love it. I love it. Y-Refi refinances delinquent private student loans for struggling borrowers. Learn more at Y-R-E-F-Y dot com slash Ramsey.