Some Sanity On How To Buy A Car
Cars are transportation. Yes, we want them to be attractive and reliable. But they’re not toys, and if we can afford to throw money away on endless car payments, we still could find a better long-term use for that $300 or $500 or even $700 check we write each month.
Besides, today’s cars are designed to go 200,000 miles with little trouble. Where 40 years ago or so, we needed a tool box in the trunk and at least a basic working knowledge of the vehicles we drove, today’s cars are built so all we have to do is turn the key, hit the gas and go, changing the oil regularly, and that’s about it.
This having been said, here is how you can pay cash for your next car:
1. Do not trade in your present car as soon as payments are done. Every month past your final car payment is money in the bank, literally. Some folks have reported keeping their cars more than 500,000 miles or more. When to trade it in: When reliability becomes a factor or when repairs become as routine as car payments used to be.
2. Keep making car payments after the car is paid off … but this time to yourself. Let’s say that after four years your car is paid off and still in good shape. For the sake of discussion, let’s say it has six good years left. Let’s also say you have been paying $500 each month. So, what do you do with that $500 you were paying to the bank, credit union or car finance people? Every month, keep making that $500 payment, but this time to yourself.
3. Put that money aside for your NEXT car. Open an account and put your payments into your “new car” account. Based on the above example, you will have a 10-year-old car after six more years to trade-in, to keep for your kids, or to keep on driving. Plus, you will have $36,000 saved. And if you earn 4% on average on your money, you will have more than $41,200 for your next vehicle.
4. When the time comes to start shopping for your next car, decide whether you want to buy new or used. I have found that the best deals are on cars with around 10,000 miles on them. They’re still as good as new, and the cost can be as much as 25% off what you would have paid for it right out of the new-car showroom.
5. Do your homework. Figure out what car – or range of cars – you want, and their relative prices. A few hours online scouting around can save you a few thousand dollars in what you end up paying.
6. When the time comes to buy your next vehicle, you can walk into a dealership, find the car of your dreams and make a simple offer: “I want to buy this car, for this price, with cash, today!”
7. If the dealer offers you a terrific financing deal, you now have $40,000 plus for other uses. Congratulations.
Want to learn more about how to get the best value for the money you spend? Check out The Back to Basics Book of Money! A Couple’s Guide to Financial Peace. The book contains 10 valuable Couple Money Skills. Plus, the Back to Basics Book of Money Workbook (which dovetails with the main text) offers 31 practical, hands-on Wealth Builder activities that can help you and your partner build financial and domestic stability.
Both the book and workbook, which retail for $31.98 plus S & H, are available at the Family Finances Conference Center website for $27.99 total.
The Family Finances Conference Center tailors programs to the unique and individual needs of client organizations and their members and employees, based on the principles of the book and workbook set, The Back to Basics Book of Money! A Couple’s Guide to Financial Peace.
For more information, contact me at the Family Finances Conference Center by email (john@b2bbookofmoney.com) or my direct phone line (920-559-3722).
John Ingrisano
Director
Family Finances Conference Center
204 Lakeview Drive
Algoma, WI 54201
(920) 559-3722