This piece is part of my 2016–2026 archive migration. Some original formatting, content, and external links may be missing, changed, or not be optimized.
A big no-no in the car-buying world
They could have changed their financial situation by getting rid of the car or trading it in for something else, but they didn’t.
Always remember, if you make a less prudent financial decision today, you can make a more prudent decision the next time.
Why Would You Get A Car Equal To Half Your Monthly Income?
Now, why would you go and do that to yourself?
Obtain a car note that is equivalent to half your income…
This doesn’t seem right, look right, feel right, or sound right.
Yet, people always do this because they are so wrapped up in appearances. They are unwilling to think long-term and count the cost of their short-term financial decisions.
Financial decisions such as this cost people from building wealth and creating financial freedom for themselves every single day.
The First Car I Bought Was A Mistake
I get it. Nice cars are great.
The first car I bought, and the only car I bought, was also a little out of my price range, and I quickly realized that after I bought the car.
I was a primary victim of the “I fell for the look and feel of the car right away and had to get it” excuse.
But I learned my lesson, which is why I paid off the car in three years versus six years. Maximizing the purchase is also something I’ve been doing since I’ve maintained the car for a decade.
The Strategy For The Next Car
I live by very stringent rules when it comes to car buying. People always make fun of me for it, and guess what? I really don’t care because they’re financially off track.
Before I get my next car, I enforce six stipulations.
6 Stipulations Before Buying The Next Car
Call me crazy, but I call it financial disciplinemedium.
On top of the six stipulations, the next car I buy will not only be within my budget, but I will also ensure I don’t go into a negative net worth to complete the purchase.
If I decide to finance the car, it will be paid in full in half the life of the car loan or less.
But the most significant difference this time is that I will have the funds to buy the car in cash if I desire to do so.
This is the only motto I will live by now.
I heard two guys chatting about the new car one of them had bought. The car was worth well over 200 grand.
The guy only paid a few thousand on it, and it didn’t sound like he was in a rush to pay it off either because that’s all he could afford to pay for the time being.
Is it worth it?
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.