HOW TO BUY YOUR CAR WITHOUT A LOAN… 6 Easy Steps… YOU GOT THIS!!!!

Remember back in the day when your parents/grandparents had a vehicle? They may not have had 3 cars in the garage, but if there was one, they owned it, maintained it, worked hard for it and pretty much drove it until the wheels fell off. If your parents were like mine, they even had to save up for the car and perhaps carpool or ride the bus until they could actually afford to finally make the purchase.

Many of us look back at those days and reflect a time of hardship and lack. We see people today with 3-4 new cars in the driveway and deem it a point of success… we have finally arrived and are so much better off than our parents ever were. Unfortunately, though we look the part, and banks have made a way for us to “seemingly” attain, most of us are not “owners” of anything. We are paying monthly payments on just about all our (what we like to call) “assets”.  We are convinced that if we didn’t finance them, we would otherwise not have them.  And though we may not be able to afford $20,000 + upfront, surely, we can all afford $299 – $599 + a month right????? OF COURSE…. It seems that way. However, we can all agree that life doesn’t always turn out like we planned, and unexpected expenses occur which add undo stress and pressure to our financial situation.

I submit that our parents/grandparents owned way more than most of us today, simply because they were not borrowing. Let’s not talk about how less chaotic our lives would be if we were able to cut back on our hours at work, or if we were able to sow, invest or multiply the money we were throwing away each month on finance fees for an item that lost value the MINUTE it was driven off the lot.

Well, I am here to tell you that it IS indeed possible to OWN everything you purchase without having to borrow from anyone. Nearly 20 years ago, my husband and I started the process of becoming 100% debt free; that we would not charge, or finance another thing.  With the exception of our home, (we have a plan for that too) we have stuck to that goal and are super close to owing no one, nothing (pardon the double negative!!! 😊). It has been a sacrifice, and definitely delayed gratification, but it so liberating to have complete control over our spending. However, it has certainly required us to alter the process for some of the major purchases, such as buying a car.

In a world where everyone around is driving the latest $30,000 + vehicle, our appetite can often times be greater than our bank account. Though most vehicles on the road are less than 5 years old,  studies show, a very small percentage of them are owned by the driver themselves. So technically, most drivers are 1-2 missed payments away from repossession, or in laymen’s terms:  the true owner (the bank) can come take it back. Not to mention how many times beyond the actual price consumers are spending once the financed term is complete… and by that time, the once satiated appetite is way past ready for yet the newest version… and the vicious cycle begins yet again. And here we are, the $30k turns into $50k;  we are now at the perpetual mercy of the improved features of overpriced vehicles for which banks have so graciously provided ways to consume our salary….7 year chunks at a time.

In the meantime, we are led to believe that our infant child, toddler and pre-teen would otherwise be riding in harm’s way if we didn’t buy a new carWe would risk DEATH if our engine blew up while driving on the freeway to soccer practice… or heaven forbid the transmission left us stuck at a red light because it had 119k miles on it!!!! DON’T BELIEVE THAT LIE!!! I am here to dispel the “used car” myth once and for all. You CAN buy a new or used car that is safe, dependable, quality, stylish AND in your budget…WITHOUT GOING INTO DEBT.

Over the past 20 years we have had super success buying cars for our family. We have a process that has given us great results, and guess what, neither of our cars has ever caught on fire, blown up or had the air condition freeze it to ice!!!!  Here is a little list of our purchases:

Year purchased Year/Make/Model of car Price of car Mileage at purchase Mileage at the end of the term Years we owned it
2017 2007 Hyundai Veracruz $6,200 130k+ Still have it… 131k 1 month and counting
2015 2015 Subaru Cross Trek $27,000 BRAND NEW Still have it… 104k 2 years and counting
2012 2003 MINI Cooper $8000 81k 122k 2 years
2008 1998 Mercedes Benz $5000 98k Still have it…286k 9 years and counting
2007 1997 Jeep Grand Cherokee $3400 151k 298k 10 years
2004 1995 BMW $8500 153k 215k 3 years
2001 1989 Audi 80 $3600 69k 145k+ 3 years
2000 1991 Volvo 240 $3100 155k+ 300k+ 7 years

 

As you can see, we have enjoyed some of the luxurious, foreign, sport utility, compact, etc. cars and have gotten great life out of each of them. Here’s how we do it.

  1. Establish a price. This is SO important. What can your family afford? Not just for the moment, but throughout the life of the vehicle… gas, repairs, maintenance? Look at your bank account, bonus for the year, extra money you received and consider a CASH amount you can spend. If you don’t have it yet, SAVE IT!!!! Put aside a little money each month, combine it with a tax return, sell an item in your house you don’t need anymore, and create a specific amount you can spend. Don’t be afraid to start off small. You would be surprised what kind of car you can buy with only $2,000!
  2. Determine the need. Many people buy cars based on what’s hot and flashy, what looks cute. Consider what you NEED. Do you have a long commute and need fuel efficiency? Are you in the car for long distances and need extreme comfort? Do you drive through mountains and/or snow and must have 4-wheel drive? Or do you have a growing family of 5 and need ample seating? Whatever the case, be sure you are addressing the NEED vs. style, name, color, or other superficial reasons that will cause you to spend outside of your price range.
  3. Consider your options. Now that you know what you are looking for, you can explore the HUGE variety of vehicles out there to meet your need and your budget. Today there are many places to search for new/used vehicles right online, which can often times present a much better alternative to used car lots. One of our favorite sites is www.autotrader.com .  You can refine or streamline the search to accommodate your exact budget, need, amenities, and other items on your wish list. Be sure to explore ALL the options. You would be surprised of the makes and models you’ve never heard of or noticed on the road. Our latest purchase was a Hyundai, Veracruz. It is a vehicle we didn’t know existed, but after research, we discovered it met our needs PERFECTLY and ultimately became our only consideration.
  4. RESEARCH. RESEARCH. RESEARCH. This may be one of the most important parts of the purchase process. Once you have narrowed your search to potential vehicles, you must research the history of that particular make and model. www.edmunds.com , www.kbb.com , and www.cars.com are all great sites that offer details, specs, reviews, recalls etc. about automobiles from every year of the manufacturing process. They provide information such as gas mileage, pricing, amenities, safety ratings, size, towing capacity and so much more. When researching alternatives to the Veracruz we recently purchased, we considered other vehicles such as the Subaru, Tribeca and the Volvo XC90. However, after extensive research and reading consumer reviews, we found the Tribeca to have major transmission issues and both required premium gas. This helped make our decision very easy. Taking time to consider the history of the vehicle and the background of its manufacturing can save a lot of heart ache in the long run.
  5. TIME TO SHOP!!!!! Finally, you are ready to take your money and make an informed purchase. Search your spirit when exchanging information with the seller. If it is a used car dealer, have they marked the price up to an astronomical rate? What is the Kelley Blue Book value of the car? How many owners has it had? Any accidents? How well was it cared for? Why are they selling it? Don’t buy off your emotion. You want a car, but YOU have the power… YOU HAVE THE MONEY!!!! If they are asking too much, but you really like it, talk them down. Be firm on your price. You have done your research, so you know how much this car is worth based on mileage, and condition. When you test drive it, LISTEN!!! Listen to the car, the sounds its makes. Look at the handles, the locks, the windows, the tires, the brakes. Does the moon-roof leak? The condition of the car will tell you a lot of how well it was cared for and help you make an informed purchase.
  6. HAVE A SUPER MECHANIC. Last step. Many people swear by taking their car to the dealership to have it serviced. We have never done that. We have always been fortunate to know of a very knowledgeable mechanic who is reasonable and enthusiastic about his/her job. We always have him look over our vehicles before putting it on the road. Remember you are buying your used car in “as-is” condition. Surely, it may need a tune up, new tires, extra coolant etc. He will be able to put it on the computer to determine exactly what it needs before driving it, and throughout the life of the car. It is always a plus when the mechanic develops a relationship with you and your car, so you have a reliable source to help when repairs or maintenance arises.

There you have it!!!! I know this was a long one, but you are now equipped to make an informed decision when purchasing a vehicle. Whether you are in the market to buying a brand new or used car, I strongly encourage you to always buy it with cash. Who wants to spend half of their paycheck each month for YEARS on newer features that will only expire soon after. When you buy it, it’s YOURS. It becomes an asset. No one can come take it and no one will hound you each month for their dues, while overcharging you several times over. The best part of it is this: When it is time for you to move on to a true upgrade, you will have the choice of doing whatever you choose with your car. So far, we have been fortunate enough to give several of our cars to others upon upgrading, (which has been one of my favorite parts of car ownership). I am excited that every purchase is better than the one before. I am excited that instead of spending our money on expensive car notes each month, we are able to save, invest, and enjoy. I pray this post helps you as well. May your greatest purchases be ahead of you!!! Here’s to 300k+ mile debt-free voyages!!!!

 

 

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