26 Jun DON’T BUY A NEW CAR!!!

Many years ago, I had just paid off a car that I had been paying on for 5 years.  A good friend gave me this advice:  “You better go out and buy a new car right away.  If you don’t your expenses will grow to eat up the car payment that you were making.  Then when you finally decide to buy that new car, you won’t have room in your budget to handle the payment.  Believe me, buy a new car now!”

I had a great deal of respect for this person, but I didn’t take his advice.  Instead, I found myself a very good Mechanic (not associated with a car dealership) and decided to save the money instead.  WOW, am I glad that I did.  It has now been 7 years that I have not had a car payment.  Another acquaintance of mine asked me:  “Yes, but where is all of that money now?  You should have bought the car and made the monthly payments.”

Here is where the money went:

• Savings from having a reputable auto mechanic work on my car regularly.  The cost was significantly less than what I had been paying a franchise auto shop  associated with a car dealership.
• I drive a reliable pick-up truck with 330,000 miles on it.  I get it inspected by Provo Car Doctors before each trip and in all those miles, I have never had a problem while traveling.  In fact, I have very few problems with the vehicle, because I get it serviced every 4 months and Nate and the Crew proactively take care of developments before they become problems.
• Enough money saved that I will buy another pickup soon.
• An annual anniversary trip, paid for, not financed on credit cards.
• A 6 month old car (not new but only slightly used) for my wife,  for which I paid cash.

Think about this, a monthly car payment on a $25,000 car, financed for 60 months at 5% interest will be: $465.60  My total cost for a $25,000.00 car would be:  $27,936.00   A premium of $2,936.00  Also, I was able to negotiate a 36 month warranty (worth about $2,000.00) at no cost for paying cash in full for the car at purchase.

By paying cash for a car, I was able to save $4,936.00 in 5 years, about a $100.00 per month.  In addition, I make the car payments to myself (auto transfer into a savings account) and will have deposited the $27,936.00 into a savings account to buy my next vehicle in 5 years.  For CASH.

The key to making this work is the auto-transfer and having the Provo Car Doctors keep your car running reliably mile after mile.

Best wishes and Safe Driving.