“Your Grandfather’s Sweet, But He’s Not Smart”: Dave Ramsey on a $62,000 Dodge Challenger Cosigned for a 19-Year-Old at 21% Interest

On a recent episode of The Ramsey Show, a 38-year-old caller described a deal his father quietly arranged behind his back: grandpa cosigned a $62,000 Dodge Challenger for the caller’s 19-year-old son at 21% interest. Dave Ramsey‘s reaction was blunt: “Your grandfather’s sweet, but he’s not smart.”

The grandfather is legally on the hook for every payment if the teen stops paying. The teen, who already totaled a Honda Civic at 16 (he blamed a squirrel), now drives a 700-plus horsepower muscle car financed at 21% interest, a rate matching the most expensive revolving debt in America. This auto loan is priced like a maxed-out credit card.

The math is brutal

Ramsey’s position was unambiguous: “He did an idiotic, stupid deal in an effort to be a blessing to his 19-year-old grandson, but instead cursed him by putting him into a car with a ridiculously high interest rate.” He is correct, and the numbers prove it three ways.

A $62,000 loan at 21% over six years produces a monthly payment north of $1,500, and the borrower ends up paying roughly the price of a second Challenger in interest alone. That is what 21% does: it converts a depreciating asset into a wealth-destroying machine. Ramsey has separately noted that “A new car loses 75% of its value in the first four years.” A Challenger driven by a 19-year-old who already wrecked one car will not be the exception.

The teen reportedly earns “$5,000 and $6,000 a month” flipping furniture on Facebook Marketplace with his sister. Even at the top of that range, the car equals his annual income. Ramsey’s rule is simple: “You shouldn’t be having a car that’s equal to your annual income, regardless of whether it’s paid for or not.” A vehicle worth a full year of earnings ties up capital in a depreciating asset, preventing funding for an emergency fund, retirement, or a down payment on anything that appreciates.

For context, median weekly earnings for full-time workers were $1,235 in the first quarter of 2026. A $62,000 car is an established-professional purchase, and even then it is questionable.

Cosigning is a loan you took

The grandfather likely sees himself as generous. Legally, he borrowed $62,000. If the teen misses payments, the bank calls grandpa. If the car gets totaled and insurance pays less than the loan balance, grandpa owes the gap. If the teen files bankruptcy, grandpa keeps the debt. Ramsey cited scripture to make the point: “Proverbs 17:18 says, ‘One lacking in sense cosigns for another.’ The CEV says, ‘It’s stupid to co-sign a loan.'”

This matters more now than a year ago. University of Michigan consumer sentiment fell to 49.8 in April 2026, a recessionary reading, and credit card delinquencies sit at 2.92%, in the “normalizing” range that signals rising household stress. A 19-year-old’s furniture-flipping income is not recession-proof. Grandpa’s retirement might be.

The resale value problem

Ramsey told the caller to sell the car immediately: “Sell this car as quickly as you can and limit the damage that it’s going to do to your life” and “I’m guessing you’re gonna lose a little money on it, but I don’t know how much.” The single variable that determines how painful this exit is: whether the resale price covers the loan balance.

If the Challenger sells for more than the payoff, the family writes a check for the difference and walks away. If it sells for less, that gap becomes a personal loan, still cheaper than continuing at 21%. Every month they keep the car, the gap widens because depreciation outruns principal paydown.

What to do if you are in this situation

1. Get the exact payoff and realistic resale number today. Call the lender for the 10-day payoff. Pull comparable sale prices on local listings. The delta is your real loss, and it grows every month.
2. If you cosigned, treat it as your debt. Pull your credit report. A missed payment by the primary borrower hits your score the same as if you missed it.
3. Use the 20% rule, not the bank’s approval letter. Total vehicle value should sit well under your annual income. The bank will lend you more. That is not the same as you being able to afford it.
4. If you are the parent or grandparent, give cash or nothing. Cosigning converts a gift into a liability with someone else’s name on the title. As the caller himself put it: “I still drive my Prius from college, to be honest.” That is the example worth giving.

The lesson goes beyond Dodge or Dave. A 21% rate on a depreciating asset, signed by a teenager and guaranteed by a retiree, is a financial decision the math cannot rescue. Sell it, eat the loss, and never cosign.