Credit, Debt, loans, Saving

Never have I ever

People always say it seems like they will always have a car payment.  A car payment is not always a necessary evil – in fact, it is very possible to not have a car payment – like ever again.

My husband and I have gotten auto loans for every car we’ve ever purchased.  We’ve always had a significant down payment.  We’ve also paid our vehicles off way before the term is supposed to end.  But, one of the things I have always told my husband is that when we finish our auto loans we need to continue paying ourselves that payment and putting it into savings toward another vehicle.  This way we have more than just a down payment – we then can purchase the vehicle completely with cash.  He always tells me that it won’t work – but the fact is, it does work.

If you continually make a car payment to yourself – instead of paying interest to the bank to service your loan or having to get gap insurance – you are in fact, earning interest on that money and hopefully being smarter in regards to how you spend that money.  You will shop smarter, do your research, negotiate better and walk away with a much smarter investment than if you were financing and possibly purchasing a vehicle you really couldn’t afford.

The truth is, buying a car needs to be a smart investment.  We spend a lot of time in our vehicles.  We want to make the smartest choice – not just in regards to what will keep us safest on the streets but also in regards to our wallets.

The other thing that people are always concerned with is whether they should lease a vehicle as opposed to buying outright.  Some people will tell you it’s a dumb decision or an all out terrible one but others will justify it by saying that if they have to have a car payment forever then they may as well get a newer vehicle every 3 years or so and enjoy the benefits of that lower car payment.  They also say that they pay less because they don’t have to pay for repairs.

And those things are true.  You are required to get a warranty when you lease a vehicle.  Your payments are less every month.  But, that vehicle isn’t yours.  You can’t customize it as you may want.  You can’t drive it wherever you want whenever you want because there are limits to the number of miles you can drive.  You also have to have full coverage on your vehicles and can not lower that coverage as the vehicle depreciates in value.  You don’t own that vehicle outright – it’s NOT yours.

One of the best parts of owning your car outright – it’s yours.  You can drive it into the ground.  You can do what you want with it.  You don’t have to worry about the dealership charging you for anything additional because it’s your car.  And, if you don’t have a car payment – that’s even better. You don’t have to deal with extra fees and interest payments.

It may seem like having a car payment is inevitable but the honest truth, it isn’t.  It’s a choice.  Let’s save, let’s put the money aside and then let’s make a choice to pay for a car we can afford.