Car Payments as a Way of Life

“I’ll always have a car payment.” You’ve heard it said before. You’ve heard it said a lot. You’ve possibly even said it yourself. Is it true? No, not if you don’t want it to be.

This is one of the most common, and dysfunctional lines of thought about personal finance and debt that I hear and it exasperates me to no end. Maybe it is because I used to think about car payments the same way. We tend to be most critical of the faults we see in others when we also see them, or have seen them, in ourselves.

Car payments are probably the single biggest threat to a family’s ability to achieve financial stability. According to in 2017 the average car payment for a brand new car was $479. If your family has two payments on two new cars that is nearly $1000 per month that you are throwing at assets that are sinking in value, like a rock to the bottom of the Atlantic every single time you drive it.

Even if you choose to buy slightly used, new-to-you cars your monthly payments could easily be several hundred dollars per month. Given that the majority of Americans live paycheck-to-paycheck and cannot cover so much as a $1000 emergency with cash this is sickening to me, and it should be to you too. On a side note, did you know that new cars lose the bulk of their value, 60% to be exact, in the first 5-years? See Car Depreciation: 5 Things You Should Know if you don’t believe me.

What if you didn’t have that car payment and instead you put that money towards paying off your house early, or saving for retirement or college, or paying off other debts, or giving more to your church if you are a Christian? Believe it or not, it is completely possible and even ideal to not have car payments. Let me lay out my logic for you and we’ll see if we can meet in the middle.

I understand that cars are generally one of the biggest purchases after a house that people will ever make and they want to love it. I get it. The idea of shelling out thousands for something that you use with great frequency that you don’t like is not ideal. We want to be safe in our automobiles and we want the best for our families. I just think we have gone too far in that direction though. The concept of feeling safe in your car simply because it is big, shiny and new is not the same as actually being safe in your car.

We have decided somewhere along the line that “new” is synonymous with “safe” and therefore a new car is the only option. Can someone please explain to me why it is that when a car is more than five years old or hits 100,000 miles on it people assume that there is a giant red self-destruct button on the thing that will go off at any minute? It’s absurd, really it is.

My second car purchased the summer before my junior year of college had over 300,000 miles on it. When it finally died over five years later it had 367,321 miles on it. In addition to work-related commutes I had driven the thing back and forth from New York to Pennsylvania, from Pennsylvania to Maryland, from Maryland to New York and back. I drove it from Maryland to Georgia and finally out to Colorado where we happily retired it after the transmission gave out. It was then sold to a junk yard for $100, exactly the amount of money I had paid for it years prior.

This was a well-loved, and well-taken care of car. It had a radio, electric windows and a working air conditioner. What more could I have wanted as a young adult? We were not constantly making repairs on it. Beyond doing basic maintenance the years that I owned it, I replaced the spark plugs, a starter and the radiator. The total cost of repairs all those years did not exceed $1000. Was it annoying and inconvenient to have to make repairs? Yes, but that’s life and it happens. Guess what? Our newer cars have required repairs on them too. New or new-ish cars are not immune from breakdowns, and using that as an excuse for why you must buy, ahem, finance, a new car is bologna.

Another faulty line of thought around only financing newer cars is that “I can’t afford car repairs on an old vehicle.” Um, come again? You cannot afford a car repair, but you can afford a monthly car payment and more expensive car insurance for a newer vehicle? Does that resemble some kind of logic that my brain lacks the ability to process? I would much rather pay a few hundred dollars here and there on car repairs than to be stuck in an infinite loop of monthly car payments. At least then I am the one in control. I can choose what repairs to do, and when, and at what mechanic. I can choose to sell and trade up to a slightly newer car. I am not a slave to a bank.

By the logic being used nowadays, my family’s 2010 Ford Focus that is about to hit 100,000 miles that has absolutely nothing wrong with it is unreliable, unsafe and needs to be sold off immediately. Again I say, that is a load of bologna.

Another common excuse for the purchase of a new car is not just about the age and mileage of a current vehicle, but the issue of size and space. Families are opting for minivans, SUVs and trucks that, because of their size are more expensive. We’ll ignore the fact that these vehicles are downright luxurious, like sitting in a private jet. I’m sure that isn’t even a small part of the decision making process. Insert obnoxious eye roll here. Yes, infant and toddler car seats are huge when you have a young family. So find a car you can genuinely afford that fits your car seat. That doesn’t automatically have to be one that you finance for $20,000 or more. It can be a $9000, 6-year old minivan that you saved and paid cash for. It’s possible and people do it every day.

Please stop telling yourself and the world that you NEED a financed or leased vehicle for any of the reasons I have discussed above. The harsh but loving truth that you need to own up to is that you WANT the newer car. You do not, I repeat, DO NOT NEED it. I beg of you to stop prioritizing this WANT over what you really need, which is to get out of debt and start saving for and building a bright financial future.

For more insight on realistically paying cash for a car check out my related article, 7 Tips to Get Into a Car Debt Free.

What thoughts or feelings do you have about buying, paying cash for or financing a car or other motor vehicle? Share your thoughts and insights in the Comments section below.

This article was originally posted on Life Tastes Better on a Budget. Check out Life Tastes Better on a Budget for more articles on faith, family and personal finance!


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