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How much better could you focus on making the world a better place if you didn’t have a car payment holding you back financially?

James Kinson provides specific tactics and tools so people can get out of perpetual car payments which makes a dramatic difference in many people’s finances.

Quotes

 “A lot of people are indentured servants to their car loans” (tweet this)

“I’m about breaking the myth that people have to have car loans their whole life” (tweet this)

“The less money you are paying for a vehicle the more research you need to do” (tweet this)

“In the first year of owning a $32,000 car they just lost $7,800 of value.” (tweet this)

Links from the show

• CashCarConvert.com – James’ site and podcast
• James was inspired by:
  • The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness by  Dave Ramsey
  • You’re Broke Because You Want to Be: How to Stop Getting By and Start Getting Ahead by Larry Winget

Transcript

Time	Speaker
00:05	Bentley	Today I have James Kinson from Cash Car Convert. Welcome to the show, James.
00:07	James	Hey Bentley, thanks for having me.
00:17	Bentley	I’d like to start our conversation by discussing compassion, which is sometimes defined as easing someone else’s pain. James, what pain are you easing?
00:37	James	Well Bentley, I think that in this country a lot of people are basically indentured servants to their cars and their car loans, so I’m about breaking the myth that people will have to have car loans their whole life. I’m about helping people in a way that some of them don’t even realize they need at this point, but I believe it’s pretty compassionate to help them out with that.
00:41	Bentley	So you’re helping people get a hold of their finances by how they buy cars?
01:20	James	Exactly. You know, basically I feel that most people are sleepwalking through this. They don’t realize that they have other options. They, much like I did early in my life, believe in this myth that you’re always going to have car payments, right? I believed it for a long time and I think now it’s even worse with leases because those people have absolutely determined that they’re never going to get off the payment wagon, because at the end of their lease they’ve got nothing left and they have to start from scratch. You know, even if people decide they want to keep their car payments, I just want to open their eyes to the fact that they’re impacting their life in a very major way, and so I’m just trying to open their eyes to the opportunity to do something different.
01:24	Bentley	Excellent. What’s your plan to help people not always have a car payment?
03:11	James	Yeah, so one of the things is– you know, first of all, I’m trying to open their eyes to just the fact that– that they have this pain. Maybe they didn’t know they had it, but once I do that, then I’m encouraging them to sell the car they have and buy something for cash. And so I try to help educate people about how to buy cars that start at under 5000 dollars. I feel like most people can scrape together, you know, somewhere between three and five thousand dollars. I think most people don’t have any idea that you can get a really solid vehicle that will transport you from Point A to Point B pretty reliably, within that price range. Especially people who’ve only bought new cars, only visited new car dealerships, you know, they– they just automatically think that everything that would be that three to five thousand price point would just be absolute junk. That’s just not the case. Now, is it going to be the sexiest, flashiest, latest gizmo-ed vehicle? Absolutely not, but will it get you reliably from Point A to Point B? Yeah, if you do your homework and your research, then absolutely. And I’ll just say one more thing here real quick and that is, the less money you’re paying for a vehicle, the more research you need to do because, you know, chances are you don’t have a lot of margin in your life and so you need to make sure that you’re making a good, wise choice with that vehicle because, if you pay three or five thousand dollars for a vehicle and then you choose unwisely, then you wind up with a, you know, two, three, four thousand dollar repair on a transmission or an engine, and you really didn’t do yourself any favours. So I’m a firm believer in– that you have to make good choices there. I’m trying to help people tilt the scales in their favour where they can make better choices and be a little more educated about how to go after those low-end cars.
03:20	Bentley	Yeah, that 3000 is often what it would take to come up with a down payment for a car so many people are used to coming up with that money.
04:15	James	Yeah, absolutely right, and you know, one of the things I don’t think people think about, and this is part of the education process, is that the average new car today costs 32 000 dollars. According to Edmunds.com, they have a depreciation calculator out there, the first year of depreciation is right at 7800 dollars for that car, so somebody in the first year of owning a 32 000 dollar car just lost 7800 dollars of value and that doesn’t include the car payments that they made on average of 474 dollars a month. So the first year, between payments and depreciation, they’re in about 13 000 dollars to that vehicle. Yeah, it’s amazing how much money people put out every year, and especially that first year because they didn’t recognize the loss on the depreciation that first year, they don’t recognize it. But those are real dollars going out the door for a working family.
04:36	Bentley	Yeah. My wife and I have both paid off our cars and plan on keeping it that way. We were able to buy our most recent car with cash. It was such a release to not have a car payment and really never have one again. That has allowed us to try different things we couldn’t have done before, like this podcast.
05:43	James	You’re right about that. I went through a life event back in the late nineties where I had a Lexus LS400 and it was pretty old at the time but I still had payments on it. I got to the point where I needed to sell that car and circumstances didn’t allow me to do it, so I was stuck in a vehicle that was really painful for me to make the payments on and when I got out of it, a friend of mine pointed me to a 2000 dollar Saab that a friend of his was selling. That car had been maintained by a Saab dealer– or, excuse me, a specialty mechanic that worked on Saabs and so I bought that car for 2000 dollars, sold my Lexus, and man, I felt so much smarter than I did the day before when I was driving that cash car. You know, this car was clean and neat, engine ran very well in it from getting me from Point A to Point B. It did have some quirky things about electronics and I think that’s maybe something that Saabs are kind of known for, but boy, in terms of transportation, getting me from Point A to Point B, it was rock solid and I got a good couple of years out of that car. Yeah, it was a real blessing to me.
05:54	Bentley	So you had that great experience and feeling of wisdom. How did you move from that to helping other people find that same feeling? Was that when you got the inspiration?
08:55	James	Well no, it actually wasn’t, interestingly enough. You know, I remembered feeling that way and feeling, you know, empowered with it, but then when it came time to get another vehicle, you know, I hadn’t done anything to prepare for it. So when that vehicle was ready to leave me, then I wanted to get something newer and nicer. You know, I went out and bought another car using debt. Now I didn’t go in over my head, kind of debt. I had this kind of a weird thing where I was like, “I don’t want to make a car payment over 300 dollars a month.” And so, you know, my car payment, I got it down around 200 dollars a month by putting a fair amount down on it and so forth, but nonetheless I went right back into payments. So I had payments from that, you know, basically 1999 timeframe up to about 2009 and that’s when I had the event that changed me, a what happened is I read Dave Ramsey’s “Total Money Makeover.” I also read another book, Larry Winget’s “You’re Broke Because You Want to Be” and I loved both those books. So Dave kind of told me how if I really got serious about getting out of debt. My wife and I were about 70 000 dollars in debt at that time, for unsecured debt, we had car payments at right about 500 dollars a month on our two vehicles, and that’s combined payments. We got those paid off, we paid off all the debt, and we’ve been living, you know, buying cash cars since then. Since– we both have bought cars since 2009. I think I bought mine in 2010. She bought hers in like 2011, and we bought those with cash and have been just, you know, really thrilled with them and have had really good luck with that. But it was the Dave Ramsey book that really got me going. The thing that got me trying to help others, which is, you know, kind of where your question is really aimed at, is that I started getting into everything Dave Ramsey did. I started listening to his radio show, you know– everything that he did, and I got this reoccurring theme from him where he would tell people to sell the car and buy a beater. Sell the car and buy a beater. And then he would say, “Sometimes I feel like my radio show is the sell the car show” because he was telling people all the time they need to sell their car, and I’m listening to this and I’m thinking, “I know how to buy cars.” You know, I’ve never traded in a car. I’ve always bought and sold cars on my own, and I’m like, “I’ve never worked in the auto industry, but I know how to do this as an individual.” I started thinking about the fact that he doesn’t teach people how to buy those beaters, and as I stated earlier, if you buy a– an inexpensive car and you’re loaded with debt and don’t have any margin in your life and you have a big repair come, that’s not very much of a blessing. So I wanted to go about educating people with a few techniques and things that I do, and most of it’s common sense, by the way. It’s not rocket science or something the average person can’t do, it’s just being a little more aware of your environment and being a little more intentional with your choices and then, you know, I think most people can find a good quality car, you know, as long as they get their ego out of the way and don’t feel like they have to drive the flashiest, you know, nicest thing out there.
09:09	Bentley	Excellent. So you take the philosophy of Dave Ramsey and Larry Winget and add specific tools and tactics to walk us through getting it all done. While doing this, are there any lessons you’ve learned the hard way that you can share with us so we can avoid them?
11:08	James	Well, most of my lessons I’ve learned when I myself was buying cars through the 40 years I’ve been doing that, and I’ll relay I guess a couple of those. One of them, when I was 21 years old I bought a car that cost about 8300 dollars and at the time I was making about 8500 dollars a year myself. And to put that into perspective, I think in today’s dollars that would be like a 35 000 dollar car. So I owned that car for about 2 and a half years, and I bought it for about 8400, and when I sold it, I think I got about 3800 for it. So I lost more than half the value of that vehicle in two years. I was glad for it to go when it went. I’ve never for myself purchased another new car in all my life. All my other cars have been used and I’ve been pretty happy with doing it that way. Not that I wouldn’t love to have a new car, but it just doesn’t make sense based on the depreciation. I’m not in a place where I want to give up that much of my money in depreciation. The next worst thing that happened to me is I bought a car thinking I was buying it from an individual and found out this guy was actually a front for a dealership, and this dealership rolled back the miles on their vehicles. And so like six months after I bought this car, I saw this guy on the news with one of these, you know, scam buster kind of a news programs and I had all kinds of trouble with that car. I had to replace– or, you know, have the engine rebuilt, transmission rebuilt, breaks redone, and I mean like brake system, and the AC unit had to have a major repair. I spent a lot of money on that vehicle so that was a very expensive lesson I learned. You know, one of the ways I tell people to protect themselves is when you find a car that you like, and you’ve looked at it and you’ve done your inspection, spend a little money and take it to a mechanic, spend a hundred to 200 dollars. Take it to a mechanic and let them look at it and tell you what they think of it, and it’s better if you have a personal mechanic. If you don’t, you should get one, but even if you don’t have one, you should definitely find a local mechanic and take that vehicle and have them look at it for you.
11:14	Bentley	That’s some great advice. Do you help people out exclusively through your blog and podcast?
11:53	James	Yeah, right now it’s my blog and my podcast. I’m planning to have an e-book that I’m going to release in the next 60 days. I’m also planning to do some online webinars but I think those will start off– I’m going to try to do some local things in my neighbourhood, maybe at my local library offer some free classes as a way to get some feedback on my material and see how I need to tweak it before I offer it to a broader audience, you know, in a webinar kind of a format. But yeah, right now my blog and my podcast, and really, since I started my podcast in December, I haven’t really done any blog posts that– other than just show notes for my podcast.
11:58	Bentley	So far do you have any success stories where you’ve affected someone else’s life?
14:25	James	Yeah, I’ve had a couple actually, and one is I had a gentleman reach out to me and he had a 2006 Jetta that– he started off the email by saying, “I love this car,” he said, “But it’s about to turn over to 100 000 miles and I’m concerned that I’m going to start having problems.” And this car was paid for,  and he and his wife both loved it, and he said, “I think I want to go buy a car with a 10-year warrantee. What do you think?” So I took him through the numbers and basically told him that, you know, a new car’s going to cost you 32 000 dollars, you’re going to lose 7800 the first year, you’re going to have payments of about another 5600 the first year. For 13 000 dollars, you can do a lot of repairs to that Jetta. So I said, “What I recommend you do is take car down to a mechanic and have them look at it and tell you if there’s any impending issues with it that they can see, and if they’re minor enough then go ahead and get them fixed. You know you’ve got a reliable vehicle. And then, since you’ve already in your mind decided you’re going to make car payments, start making those car payments to yourself right now and then when you do get ready to get rid of your Jetta, then you can used that money to buy your next vehicle for cash and you won’t have to go in debt and make car payments. And I also told him that most cars today– and you go out on Craigslist and look at vehicles, you’ll find all kind of vehicles that are over 200 000 miles. So I told him there’s no reason his vehicle, with proper maintenance, won’t go to 250. And he came back to me with an email and said, “You know you’re absolutely right. I didn’t think of it that way. So I took it down, my mechanic says there’s no problems with it and I have been maintaining it well, so I’m going to start making payments to myself and I’m going try to get 250 000 miles out of this vehicle.” So that’s one story that I was very happy with. I had another gentleman, and this is one I get fairly often, is that people will tell me they were thinking about buying a new car, and then they listen to my show and they said, “You know, I didn’t know I needed this education until I heard it.” And then they’re like, “You know, I’m not going to buy a new car.” And as I tell people, “Look, I want you to buy a cash car so you can really have the kind of freedom that you deserve but even if you’re not going to do that, at least downsize.” Like, if you get a 32 000 dollar car, you know, downsize to like a 16 000 dollar car. You know, at least get that start and there’s [sic] so many good cars out there in that price range, you won’t have a problem, and then eventually, hopefully, you’ll be able to save money and buy a cash car but, you know, at least make those incremental improvements to kind of put some of that money back into your own pocket.
14:28	Bentley	So how long have you been doing the blog and podcast?
16:20	James	Yeah, I started the blog in August of 2013, just a couple of months away here from having been doing that for a year, and I started the podcast in December. It’s been kind of a heady ride. I’ve really met a lot of good people this way, through the podcast and through my audience. I’ve had a lot of good support. I should tell you, Bentley, that when I started doing this, you know– one of the things that people tell you when you start a kind of an online presence, you should go see if somebody else is doing it, and if they are, that’s a good sign because that means there’s a business there. Well I went out and I couldn’t find anybody else doing what I’m doing. I was very concerned that I wasn’t doing something that was going to be of value to people, but as I’ve met people and talked to people, I’ve had such a positive reaction. Especially the people who are business owners and people who want to change their lives and they don’t want to work a nine-to-five job, they want to make that leap into starting their own business and they realize that any kind of debt really holds you back. It’s kind of a ball and chain to prevent you from being able to live your dreams but I think I started off kind of not being very bold about telling people about this and I had a particular podcaster, his name’s Ray Edwards, a guy I respect immensely, and I was telling him about what I was doing and he said, “You know, you should be more bold about this.” He said, “The fact is, if people will do what you’re telling them, there will be people who will retire in dignity because of what you’re doing. There are people who will be able to put their children through college because of what you’re doing. Don’t just think what you’re doing doesn’t matter or isn’t important. This is a message that needs to be out there.” I’ve had a number of people tell me similar kinds of things and it really changed my mindset about it and allowed me to kind of walk a little taller and, you know, hold my head a little higher when I’m talking about this now.
16:28	Bentley	Definitely, you should feel free to share this with people. So you’ve been doing this about a year now. Do you feel like you’re making the world a better place?
17:30	James	I do in terms of impacting people. Like I said, I get messages from people and stories from people that have been impacted. I talk to my wife about it and I’m just like, “Wow, it’s like I’m doing this thing.” And I’ve dreamed of doing but I’m still amazed every time I get a story from somebody telling me that they did something that changed their life. That they didn’t go in debt for a car or they kept a car that they thought they were going to get rid of and then they took it to a mechanic and had somebody look at it, and found out that really there wasn’t much of anything wrong with it and now they’re going to be able to drive it a lot longer and– there’s a thing a friend of mine, Jim Munchback says. He said he’s made a lot of money off of people with the 100 000 mile myth, and that is the myth that once a car flips over 100 000 miles, you’ve better get rid of it. He’s done okay buying cars from people who were anxious to sell when they were about to hit that point, so yeah I feel really good about that and I think I’ve already impacted a number of people. I’m looking forward to continuing to grow my brand and my reach, and impacting more people as I– as I grow.
17:41	Bentley	Well we look forward to seeing you do that and helping where we can. If you met someone that had a similar compassion to share useful information for making the world a better place, what advice would you give them?
18:49	James	I would really tell them just, you know– I mean, they need to do their research but they really need to choose themselves and start. I had this idea, or some semblance of this idea, for about eight months before I ever started the blog, and I kept having all these excuses for not starting. I don’t know how many more people would have been impacted had I started sooner. It’s so easy to get negative on yourself and you start thinking, “Well, who am I to help people in this particular way? Who’s going to listen to me?” And we all have those kinds of doubts that will creep in, and I think the thing that really helped me kind of get over that is I realized that I don’t have to be an expert in all facets of vehicles to be able to help a lot of people, I just have to be able to help people that aren’t quite as far along as I am. You know, they can learn from my mistakes and I can share with them the knowledge that I’ve earned through some costly mistakes and I can share those with people. And so that’s what I would say to them, you know, take stock and inventory of what it is that they have to offer in the space that they’re looking to get into, and just realize they don’t have to be the expert, they just have to be a couple of steps ahead of the person that they’re trying to help.
19:01	Bentley	Yes, that’s so important to understand that we don’t have to know everything before we start. Are there any tools, resources or processes that you used that might help us do something similar?
20:00	James	There’s not– you know, I don’t do anything too exclusively. I think the thing I would recommend to people is to get engaged with people in the online marketing space, if that’s where you’re– if that’s where your interests are then engage on Twitter and engage on Facebook. Start following some of your heroes in the podcasting or blogging space and start interacting with them. Start tweeting to them and sharing their content, and it’s amazing. Those people will really appreciate that and they will tweet you back. It gives you some social credibility out in your space. And then I’m a big believer in going to conferences and meet ups. I think that’s the other thing, is you have to let people know what you’re doing and so go out there to conferences and meet ups and meet as many people as you can. And take those online relationships that are all social and take them offline to the meet ups and conferences. I think that’s a really good thing. Now, you know, as it relates to my space in particular, for the Cash Cars, I’m a big believer in using things like Consumer Reports–