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Inside: How to buy a car for cash and say goodbye to car payments once and for all. Persistence pays off when you pay cash for your next car and you’ll feel like a rockstar without a payment.
I recently bought a Toyota Camry and paid cash.
I handed over an envelope stuffed with hundred dollar bills to the Syrian family at the third-party DMV shop.
Ever since I took out an $8,000 loan plus the $250 we’ll pay off your loan if you wreck the car insurance for my little Mazda that could with 44k miles, I wanted to pay cash for my next vehicle.
12 years ago, fresh out of college, I was still driving my dad’s Chevy 10 until the morning in January when there was a horrific screeching of metal as the garbage truck hooks tore into the side of the pickup…
the driver forgot to raise them up as he went around the truck.
Even though I made $19,000 that year, total, I still qualified for the loan.
The payment coupons were a heavy weight dragging behind the Mazda and I stressed about the $200 payments due on the 15th.
Never again would I be pushed into getting a car I couldn’t afford.
Never again would I have another car payment.
How I saved up cash to buy a car
Every month I sat with my coupon book, crunching numbers in my budget to see if I could put extra money towards paying off the car loan. $50 here. $200 the next month.
It took me 2.5 years instead of the 5 year loan to pay off my car for good. And during this time, I made the commitment to never have a car payment ever again.
Related: Saving Money Like a Boss
I drove my car hard over the next eight years
My hubby kept up on the regular maintenance and major repairs, changing out the suspension, engine mounts. What he didn’t know how to do, he learned from watching YouTube videos and reading blogs.
The repairs happened more frequently. Nine months of repairs after repairs.
Every time I’d build up the car repair fund to a couple hundred dollars, something would break and wipe it all out in one swoop.
We started talking about buying another car. So I gave myself a car payment and started saving $250 a month.
I’d committed to buying my next vehicle for cash and wasn’t about to break that promise to myself.
Enjoyed the freedom and peace of mind that came from being debt free too much to even consider financing another vehicle…
Even though we spent a lot of money on repairs.
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Pay yourself a car payment so you can buy that next car for cash
It wasn’t worth it to take out another car loan
When I ran the numbers, I thought it would easily take a year to save up the cash. But, I didn’t account for life.
Additional school expenses. Car repairs. Last minute flight for a funeral just before Christmas.
All dipped into the car fund, sometimes wiping it out completely.
Discouraged for a moment, then I’d catch my breath and refocus. The rhythm of saving continued to beat each month.
Related: 4 powerful ways to breakthrough money disappointment
I soon found that the best progress is made when there’s one savings goal to work on and prioritized where any savings would go.
The priority was school. An investment in my husband’s career which would pay off with a huge ROI.
Forget the car loan! Say Goodbye to the car payments for good with this simple trick
Replacing my car would have to wait
Prayer was my default reaction anytime a major repair was needed.
Like when my Mazda sprang a leak, where all the coolant billowed out and caused the car to die in the turn lane across from Denny’s.
So bad my hubby thought the head gasket had been warped and we’d need to replace the car right away.
Related: How I saved $205 on car insurance with two emails
Forget the car loan! Say Goodbye to the car payments for good when you pay cash
And prayer worked. The head gasket had no damage.
So many times the needed repair wasn’t as extensive or expensive as we’d first thought.
My car kept going and going, reminding me of the verse
Yet the LORD says, "During the forty years that I led you through the wilderness, your clothes did not wear out, nor did the sandals on your feet. Deut 29:5
Through all the years of school, piling up savings only to be used by something else more important, my car didn’t wear out.
It took four years from the time we started saving money for another vehicle to have the cash on hand.
Related: When you need encouragement to keep after you money goals
Say Goodbye to the car payments for good with this underused alternative
Persistence in saving. Repairs. Prayer.
Our budget was $4,500 and we decided to look for an older Toyota Camry with less than 150k miles.
Camry’s are built to last and are among the top reliable vehicles on the road. My hubby will be happy with fewer repairs.
Fancy cars are nice. If they’re a small percentage of your income and net worth.
I’d rather have more money towards other things - downpayment for a house or to invest, than to have a lot of money tied up in vehicles that go down in value.
If you didn’t have a car payment and instead worked with a pro to invest that $500 a month in your 401(k) or Roth IRA, you could retire with more than $1 million after 30 years. - Quoted from “Turn your car payment into a million dollar retirement”
The freedom and peace of mind from zero debt is so valuable to me. I’d walk or ride the bus if I had to until there was enough money instead of financing a vehicle.
Besides for the engine, exterior and interior to be in good shape, my other prayer request was a pretty white car.
learn how to stay out of debt and forget the car loan when you're ready to buy another vehicle
You can buy a car for cash
Even if you save up money and an unexpected bill shows up.
Keep repairing the vehicle. Learn how to do most of the work yourself, which saves a lot of money.
Continue to save and save. Until you can buy a car for cash.
Keep paying yourself a car payment into savings so you’ll have the money to buy the next vehicle.
Related: 11 debt payoff mistakes that you need to knowDon’t settle for the lie that you’ll always have a car loan
Or if big expensive repairs comes up, that you have to finance another vehicle right now.
A repair is cheaper than a new vehicle.
Commit to buy any future cars for cash. Buy used so the value has already depreciated.
The Mazda had 324,000 miles on it when I bought the white Camry for $4,000 with 145k miles.
And yes, I do tell everyone that I paid cash.
Want to learn how to manage your money so you can pay for a car with cash, overcome money struggles, and gain financial peace with a Biblical perspective?
Hi! I’m Charissa. I’m on a mission to help hardworking women overcome money struggles and gain financial peace with a Biblical perspective so they can have the freedom to impact their families and communities. Ready to make some changes that will impact your finances in 2020? Click here to get a free worksheet to help you make it happen!
