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A new mentality many never consider
I bought my first car for 14k, paid it off in three years instead of six, and the rest is history.
There hasn’t been a car note in my name since.
The Car Note Isn’t The Problem
The problem with the 14k car note wasn’t the car note, though.
The problem was that I didn’t have 14k in the bank in my name when I bought the car.
There’s a difference between buying a car with cash and buying a car with someone else’s help (the banks) because you don’t have cash.
Before I bought my next car, one of my stipulations was that I had the amount of cash in the bank for the car’s value.
I would never again go into debt to repurchase a car. It’s simply not pragmatic.
There are plenty of cars you can buy for cheap that may look a bit homely but will get you safely from point A to B.
When you’re in debt, desperate for your next paycheck, and don’t have any savings, the last thing you should acquire is a new car.
Save this luxury purchase for when it doesn’t add any financial stress to your life because that new car smell will wear off quickly once you realize the financial burden you’ve added to your life.
A $40k Questionable Purchase
A friend of mine was $1,000 away from paying off their car.
Instead of making the final payment, they traded their car for a new $40,000 car.
Instead of decreasing their transportation expenses to zero, they increased them to $40,000.
The new car payment was about $500 monthly, and the car insurance was about $250.
On top of the new car expenses, they had student loans, two maxed-out credit cards, and one income – none of which was passive.
The stress got so much that they eventually broke down, and their whole life took a turn.
The key here is financial decisions have domino effects.
The more debt you walk into, the less freedom you have to do the things you enjoy.
I haven’t had any debt for almost ten years. And it feels damn good. And this is why I’m so cautious about adding any debt to my life.
Whenever I buy a car, I ensure I have money in the bank to purchase the car’s total price, so my net worth isn’t negatively affected.
Furthermore, I always inquire whether the purchase makes sense.
Sometimes, we think we want or need something but don’t.
The best way to determine how wrong you desire something is to play the waiting game.
Instead of making the purchase right away, wait 48 hours.
Take it further and wait three months – especially since it’s a new car.
I guarantee you won’t miss out on any deals because car salespeople are always trying to sell something and will find a deal to make the sale.
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This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.