We've been married for 21 years. Guess how many car loans we've had? Zero. Naturally, it helps to be married to a "car guy", but we committed to only buying a car for which we could pay cash before we got married and we've stuck to it. We have driven some really UGLY cars, but to us it was worth more for me to be able to stay home with the kids than to be paying a couple of car payments each month.
Our most recent purchase was actually mostly free. Some dear friends blew the engine in their very nice mini van. The van was paid-for, and the husband was planning on having it towed to the junk yard when my husband found out about it. We looked at the van - it is lovely! Our friends gave us the van for free. It had a new transmission, and the only thing wrong with it was the engine. Our neighborhood mechanic got a rebuilt engine for $3000 and put it in for us. Now we are driving a van with no payments (we had money in reserve for the engine).
If you do have car payments, and are having a hard time making ends meet, do a little math. Add up your monthly payment, plus auto insurance, and get that total. Then check the Kelley Blue Book to research the value of your car compared to what you owe on it. Is it worth selling the car? Wouldn't it be great to have that extra couple hundred dollars each month?
Buying used cars isn't as scarey as some people think. The over-riding fear is, "What if the car breaks down?" Well, if you would switch over to driving a car which is paid for, and save the difference in what you would have been paying out in car payments, you would have a nice car emergency fund without debt.
For more information check out Dave Ramsey's article, Why Buy A Used Car?
I know without a doubt that if my husband and I had two car payments, I wouldn't have been able to stay home with the kiddos as they grew up.
What are your vehicles worth to you?
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