I've seen a lot of people mention Dave Ramsey on this site. Does anyone know Dave Ramsey's philosophy on car insurance? I listen to the radio show a few times a week but I don't have any of his books. One time I thought I heard him say to keep full coverage unless you have enough cash in the bank to pay for another car if you had to get one, like after an accident or something. We are trying to decide if we should have liability or full coverage. Did I hear him right?
If you still owe money on the vehicle, you should keep full coverage on it and have the deductible at whatever amount you can afford. If it is paid for, the coverage should depend on the value of the vehicle. As another post mentioned, if the vehicle is only worth a few hundred or 1-2 thousand dollars, there is no sense in spending the money on full coverage. If it is a newer car with low mileage and it's paid for, then by all means, you want to have full coverage. For example, I have a '94 with 142k miles on it. It's only worth about $1200. I have liability only with a $500 deductible. You can find out the value of your vehicle at kellybluebook.com, which is what most car dealers use as a reference.
I asked this question of some friends who listen to Dave Ramsey a lot and this was their response: "from his forums they have his expanded baby steps list that he uses in his actual classes. It says: Quote: 1.3 Consider raising insurance deductibles to $500 or $1000 and dropping full coverage on paid for "bondo buggy" (You have an EF ya know)"
Hope this helps? God Bless, Sheila in Titusville, FL
I, too, watch his shows now that he is on DirecTV. I would like to know his answer to this also. Why don't you email the question to him at http://www.daveramsey.com/index.cfm?fuseAction=dspMailDaveOnAir so he could answer it on tv for everyone to see. I've never heard this question asked before. Janene
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