How I Purchased a Car Without Going Into Debt

When it comes to debt, our family prefers to have as little of it as possible. While we do have a mortgage which was used to finance a new business venture in 2006, everything we buy is paid for in cash, including our cars.

Purchasing a car without going into debt is really not at all difficult. It's so easy that my husband and I have purchased all four of our cars without having to resort to a finance plan. If you are looking at buying a new car without going into debt like our family has, our car buying strategy will work for you as well.

1. It starts by diverting extra money into a savings account. Americans have gotten so used to financing our purchases that many of us have forgotten that there used to be a time when cash was king. Having cash really gives you an edge over buyers who must finance their purchases.

Before even looking at cars, you must leverage yourself into a solid position for car shopping. This is done by moving as much money as possible into your savings account for the upcoming year (or two). If you have no clue how to save, "How to build up a savings account" by C. Jeanne Heida can get you started.

2. Comparison shop like crazy. Once you are close to your targeted savings amount, it's time to comparison shop for cars. The benefit of having cash is twofold; not only can you dispense with those costly finance packages, you also have a wider selection of cars to choose from. Having cash means that you are not limited to buying a car from a dealer but can tap into other venues such as auctions, fleet sales, thrift stores or other private sellers. Cash also gives you room for negotiation since most sellers (including dealers) will discount for cash.

3. Set a realistic price tag for yourself. While we all would prefer a brand new Jaguar or Porsche, these cars are out of range for most of us working class joes. When remaining debt free is the goal, a better strategy is to buy a less expensive used car. There are sorts of amazing car deals out there, especially in the $5000 or less price range which are great options for a debt-free purchase. Don't know what to buy? A couple of articles worth reading include "My Top Best Used Cars under $5000" by Jesse Sears here at the Yahoo! Contributor Network (here's the link to Jesse's article ) and "My Top 10 list: The best uses automobiles for under $5000" from Epinion.com (My Top 10 List). These articles list a great selection of used cars that are both affordable and reliable.

As for myself, I am partial to $1000- $2000 vintage Volkswagens. These bargain priced cars usually require several thousands of dollars for restoration work, but are still an amazing deal for a classic car. Best of all, we've discovered that the money put into our VWs is usually recovered when the car is sold.

As you can see, purchasing a car without going into debt really isn't that hard. All it takes is a bit of patience while building up a savings account, and then settling for an inexpensive used car that works within your budget. When the goal is remaining debt-free, settling for less when it comes to a car purchase is what will keep you financially afloat.