How I Purchased a Car Without Going into Debt

Purchasing a car with cash is always the ideal situation, but not everyone can do it. I did it, but I did it cheap, and since I paid cash for that car I did have to buy another car that I did finance. I decided that after the fact I would like to go back to only paying cash for a car for several reasons. In this article I am going to cover how I paid cash for a car, how I did it, and why I decided I didn't want to finance a vehicle ever again.

Paying Cash For Cars

Making payments on a car is such a bear because of the idea that you have something big to pay after your rent or mortgage, and it's more money going to a bill that you can't set aside for your savings or spend on a nice vacation. However, before you are in a situation where you need to buy another car begin the saving process. Everything we do should be done on purpose, so every penny we earn should be for a purpose. I had implemented a rule of putting aside ten percent of every paycheck and putting it into my savings account, and before I knew it I had $500. Then, I would look and I had $1,000, then it was $1,500, but you get the idea.

Have a Plan

Being consistent is the key, and by coming up with a plan I was able to follow it. Keeping the plan simple was also helpful, and I kept the amount of money realistic. Setting goals is about something you want to strive for, but you also want it to be possible to obtain. If you make the goal too high, then it will fail you every time. For example, if I had planned to save 20% or 30% out of each paycheck that wouldn't have been realistic, but by starting with a smaller number I was able to keep up and feel good about what I was doing.

I also had committed to opening up my choices to those who were selling independently. In this case, I ended up buying my car from my brother and his wife. However, I knew that this car was reliable because they had taken care of it. I wish that everyone could be this fortunate, but not all car owners will take their cars for regular maintenance as they should. I knew that the car would have less overall maintenance if I continued to care for it as well. I kept the oil changes on a regular basis, and called my brother if I had any questions. By buying this car with cash, and buying a car I knew was reliable and well taken care of I was able to spend less in the long term.

Staying out of debt with a car just isn't about what you put down, or even if you pay cash for the car, but also planning your entire purchase and looking into the future to see how this purchase will affect your finances. What you pay in car insurance is important to know, because you need to plan for things to come up. You need to know how much gas you will be putting into the car, because that will help you figure out how much per month in addition to insurance that you will be spending as well. All of these factors are important to consider so that you can know whether or not this car is truly in your budget.

One book I highly recommend and was helpful to me in making my decision about saving as well as how I buy cars is Dave Ramsey. His initial book "Financial Peace" talks about why it's best to pay cash for a car if you can, and about how you should view a car. Sometimes how we view our possessions mandates how much we spend, or try to justify spending on something. This book was a big help for me, and some of his newer books can help you come up with a budget no matter what your situation. Cars are one big purchase that many don't look forward to, and it isn't just about the car salesman. Spending money on cars can seem like you are throwing money away because they decrease in value. However, with the proper planning up front your car purchase can be much different than you ever imagined.