I had a pool side conversation with some neighbors the other day. Mostly 60 & 70 somethings like myself. We got to talking about cars.
The subject of how to pay for them came up. Heard some pretty interesting thoughts on the subject. I'm just curious about what kind
of vehicle everyone bought and how they paid/are paying for it. Not whether you got a car or a truck or an SUV. Just if you bought new or used?
Private or off a lot? Did you pay cash or finance. If financed, and you got it from a dealer, did you use the dealers loan co.?
Or did you get the money from your bank/credit union? Also if financed how long was/is the loan for?
Most agreed that the best deals were gotten from credit unions. Except if you got one of the 0% interest loans such as the ones offered by Ford recently.
The general consensus around the pool was that most people finance for 5-6 years when buying new.
Probably 4-5 years if buying used depending on the price.

All of my cars and trucks have been purchased used from individuals since 1984. The Honda had 36,000 miles and we put it on a low interest home equity credit card for interest deduction. It was a good deal at 10k. The 1990 Ranger 4X4 was cash, purchased from a neighbor. It cost a little bit more than I would have liked, but was still reasonable, and has lasted a trouble free 4 years so far. The 89 S-10 had 11,000 miles on it in 1994 when bought for cash, and it was a great deal. Beat it to death and it is now used as a ranch/farm only vehicle. It sounds, runs and looks like crap.

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46 1/2 ton with 56 292:thumbsup:

In March of 1985 I made the last payment on my 1980 Toyota Tacoma P/U. Since I was use to living without the $380 per month, and I was tired of adding
$2,000-3,000 to the cost of the car for interest, I decided to continue making payments. To MYSELF. Four years later I purchased another Toyota P/U.
This one was a 2 year old lease return with less than 20,000 miles on it. I got $2,000 for my old truck and used $10,000 of the $20,000 I had in the bank
to pay cash for the truck. I upped my monthly payments to myself to $400 per month. I decided to put the money into mutual funds at that time though.
Savings weren't paying all that much. Three years later I had well over $30,000 in that fund. In 1992 I decided to purchase an almost new Infinity.
It was the dealers "demo" car and had less than 600 miles on it. The car sold for $26,000 new. I got mine for $20,000 and again paid cash.
I stopped making payments to myself at that time. After purchasing the Infinity, I still had about $18,000 left in the mutual fund.
The fund has been returning about 12-15% annually. That means I get about $15,000 every 5 years or so. Since 1992 I've purchased 2 more cars.
Both lease returns. I got my Ranger as a 1 year old (actually 10 month) lease return. It had 13,000 miles on the clock.
A brand new 2002 Ranger still being sold at the time with the same equipment listed for $23,500. I got mine for $14,000.
The guy that turned it in took the hit because 10 months into a 2 year lease he decided he wanted a F150.
So the bottom line is. If you start paying yourself today. Ten years from now you could be driving a new (to you) $15,000-20,000 car every 5-6 years.
FOR THE REST OF YOR LIFE. Without adding a penny to the kitty after about 6-7-8 years. If you're currently in your 20's or 30's, Think about it.

This is some fantastic advice! :thumbsup:

Great post!

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Great advice. If only I could be that disciplined. Between the wifes car and mine I seem to always be making a hefty car payment. I guess I am just the type that always want his cars to be under warranty so I don't have to deal with the hassles of repairs and breakdowns. However with my current car (07 Mercedes-Benz C230 financed for 4 years) I plan to drive its life out of it. I would also like to get my Mustang restored just to fill my desire for driving something different now and then. Car payments totally suck. Such a horrible investment! Unless of course you are disciplined enough to follow Memphis' plan. Hopefully that can be me some day!

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the sharpest tool in the shed
1989 Mustang 5.0 GT (25th Anniversary Edition)
~hobby car~

I don't believe you Sharpie. I'm sure you have the discipline. You're just looking around and thinking, EVERYONE finances a car. That's probably what you grew up believing.
No not everyone. I don't.

Tell the truth Sharpie. When was the last time you had warranty work done on a car? Also, if you get a 1-3 year old lease return, from a dealer and it bothers you that much.
You can usually get a an extended warranty for less than $1,000. I got one on my Ranger to 5 years/75,000 miles for about $650-700.



Let me give you a hypothetical situation Sharpie. Let's say you got that C230 on Jan 1, 2007. That your monthly payments are $550 per month. On Jan 1, 2011 you'll make the last payment.
The C230 is 4 years old and has 60,000 miles on the clock. If you keep it for another 4 years and put another 60,000 on it, on Jan 1, 2015 the 230 will be 8 years old with 120,000 miles.
At that point the 230 will be worth what? Maybe $7,000-8,000. If you had continued to put the $550 per month into a GROWTH mutual fund, by Jan 1, 2115 you would probably have
something like $35,000 in that fund . That plus the $7,000-8,000 or more from the 230 would give you somewhere between $40,000-45,000. If you took that money and purchased a
3 year old lease return C230 for $20,000 and paid cash for it, you would still have $20,000-25,000 in the fund. Don't add another cent to the fund, but don't take any money out either,
except once every 5 years to get another car. At that rate you can get another $20,000-25,000 car depending on the trade in value of your old car, and pay cash for it for the rest of your life.
If you're 35 now, when you're 43, you will NEVER have make another car payment, for the rest of your life.

Or

On Jan 1, 2011 you could trade in your current C230 for another new C230 and start the whole cycle all over again. THINK ABOUT IT.

If it were and "investment" it would be. All my "investment's" go UP in value Sharpie, not down. A car is NOT an investment. It's transportation.


If I can do it, anyone can. It doesn't take discipline. It takes DESIRE. If you have enough desire, the discipline will come automatically.

Just for the record Sharpie. Over the last 4 1/2 years, I've probably spent $10,000-15,000 fixing up my Ranger. $1,100 for the tonneau cover, $2,600 for wheels/tires,
$3,000-4,000 on the audio system, etc, etc. I've paid cash for all of that because that's the $400-450 per month I would have been making in car payments had I financed the purchase.