There are many folks that have car payments but no savings or emergency fund in place, not good. Starting a family was a big reason that we decided to get rid of the car payments and commit to living without a car payment moving forward.
Remember that you don’t have to have a car payment to be normal! Or maybe you do need a car payment to be normal so you should think about being abnormal by paying cash for your next car.Be ABNORMAL and pay cash for your next car! Click To Tweet
I recently heard James Kinson of www.cashcarconvert.com talk about paying cash for cars on the Think Enriched podcast with Amy Robles. This conversation got me ‘fired up’ on the topic, ‘igniting’ this blog post.
If you’re thinking of buying and financing your next vehicle then please consider the following points before doing so. That shiny new ride may seem to be your heart’s desire but think twice before enslaving yourself to the bank for years to come.
Here are my 10 reasons for paying cold hard cash for your next car. Let's assume that you're going for a vehicle for five thousand dollars or less.
- Zero Interest Guaranteed
- Save the monthly payment!
- Avoid debt because debt is generally bad. Auto debt is always bad.
- You'll likely have cheaper auto insurance. If your car is under 5K then you may be able to get away with a liability policy to save monthly.
- You can't afford not to pay cash. Most of us really can't afford a monthly payment for a vehicle costing 20K or more. Investing that plus the note interest will pay off when it counts.
- Practice some humility. Is your ego driving your purchase?
- Instead of taking on more debt, pay down some existing debt.
- Beat the dealer! Dealers typically make more when you finance. With your cash buying power you'll probably get a better deal from a private seller anyway. Dealers are evil too, well mostly.
- It's less complicated to pay cash because the bank is not involved.
- You'll probably take better care of the vehicle if you're paying for it outright. Saving for something like a car makes the purchase even more special. This purchase will feel good as well because you've earned it.
With some discipline, it is possible to pay cash for your next vehicle. You can find a good car for under 5K!
Once you’ve saved and have found your cash car then make sure that you get a reputable mechanic to check the vehicle. There’s risk involved in buying an older vehicle but it will pay off in the long run.
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