“You’ll always have a car payment.” (NOT!)

How to change your thinking and change your situation

You won’t “always have a car payment.”  Don’t let your Dad, your buddy, or your hair stylist tell you that.

Unfortunately in our consumerist culture we have been told, “You’ll always have to take out loans for college” and “You’ll always have a mortgage” and so we believe it.  We throw up our hands and agree that Uncle Jimmy must be right, we ARE going to always owe money, so why not just do what feels good now and go “buy” the new car.  (In reality, if you borrow money to get something, it’s not yours until it’s paid off- I always hesitate to say I own a home because in reality I still owe the bank for some of my home– it’s not mine yet).

We evaluate our finances only enough to know that we can afford a $400/month payment so we must be able to afford IT.  But if in reality we only make $40,000 per year, that $18,000 vehicle is really out of our league  ($400 a month is based on borrowing $18,000 at a rate of 3% for 4 years),



Let’s instead say that for 2 years you saved $300/month towards a better vehicle.  I’ll say $300 because that gives you $100/month to put into another account to fix up your clunker.  After two years you would have $7,200!  You can buy a pretty reliable vehicle for $7200!

In the past 8 years, we haven’t spent more than $7000 cash for a vehicle and we’ve driven the wheels off of each one without too much drama.  Do we own the coolest cars in America?  Definitely not.  Do we rest easy knowing that we owe no one for those cars?  Definitely!

This is nothing new- Dave Ramsey teaches this stuff everyday!  However, I have noticed that no matter what, people don’t believe that others actually do this stuff and that it works.

So what’s the deciding factor for having success with this method?

Deciding to do it.


You must change your thinking and set your mindset that you WILL NOT, no matter the circumstances, take out another car loan. Then you have to put your money where your mind is and be diligent about saving NOW.  Changing your spending habits and debt accrual all starts in your head.  If you’re too concerned about what people think or your short-term “Keeping up with the Joneses” you will not make it.

I hate when someone says, “Oh, they drive an Audi (Mercedes, BMW, etc), they must have money.”  I usually respond with “No, they probably have debt.  Most people can get a loan for *insert fancy car name*.”    I’d rather have a cushion for my family in an emergency than some sweet wheels to make us feel good about ourselves.

If you want to win financially, be willing to humble yourself and drive the beater for a few more months…or 100,000 miles.  You won’t regret it!


What do you think?  Have you paid cash for a car?  Has someone told you, “you’ll always have a car payment?”  I’d love to hear!

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