Car Repairs vs Student Loans ~ Dave Ramsey Prioritizes

October 6, 2018


Dear Dave,

I’m driving a 12-year-old car with 210,000 miles on it.

The car needs close to $2,000 in repairs, and it’s worth $5,000.

I have $40,000 in cash saved, $40,000 in investments, and I make $80,000 a year.

I also have $15,000 in student loan debt, but the only other thing I owe on is my house.

Should I pay to repair the car, or buy something else in the $15,000 price range?



Dear Brett,

Let’s see, if you wrote a $15,000 check for a newer car and wrote a $15,000 check for the student loans, it would leave you with $10,000.

I wouldn’t buy a $15,000 car in your situation.

I’d buy a $10,000 car.

You could probably sell the old one for around $3,000 if it needs repairs, combine that with your money and get a $13,000 car.

Then, you could write a check and pay off the student loan debt.

With no car payment, no student loan payment, and a good car, you can really lean into your budget and saving money.

You’d have no debt except your home, and you could rebuild your savings in a hurry.

You’d be in really good financial shape in about six months.

Plus, you’d have $15,000 in the bank in the meantime!


* Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money MakeoverThe Dave Ramsey Show is heard by more than 14 million listeners each week on 600 radio stations and multiple digital platforms. Follow Dave on the web at and on Twitter at @DaveRamsey.