You’re driving an old car. It has many problems, dents, air-conditioning that doesn’t work well. Perhaps the transmission is slipping from lack of maintenance. You’re tired of the driving an old, worn out car. The days of brand new $15,000 and $20,000 good cars are now gone. Today the average price of a new car is closer to $48,000. Interest rates are super high, even for those with a FICO credit score hovering between 700 and 800. Because the banks have raised the interest rates in order to curb inflation, it no longer makes sense to buy a brand new car.
Let’s say your car needs a new or rebuilt transmission, that’s over $3,000. Next your A/C isn’t blowing cold and the mechanic told you that you have a leak in the evaporator which will require them to remove the entire dash to get access to it and they want nearly $1,200 to replace the entire thing. The clear coat and paint is peeling off all over and the car is unsightly to look at. The paint shop quoted $2,000 to make it like new again. The upholstery in the seats has torn in many places and the seat cushion is popping out. Again, an ugly sight. And they want $1,100 to reupholster the seats to make them like new.
If you added up all of the costs to totally make your car like new again, I can promise you that all of those repair costs would be NEAR NOTHING close to $48,000, plus tax, tag, dealer fees and tons of add-ons, making your purchase far north of $50,000. With a whopping $10,000 cash down, you’re looking at nearly $800 per month for 60 months to pay off that car, not including maintenance, gas and insurance. Do you really want to get buried in the hole that deep? What if you had a job loss or got hurt or sick? And believe me, people do! And you don’t have to be an old person to have this happen.
It would be far cheaper just to put that down payment on the new car into making your existing car like brand new again. Go ahead and get all of those major repairs done. But don’t paint the car first. Get the engine and other work done first. If you get the paint job done first, they could end up scratching up the new paint job.
If you’re car is ugly, make it NOT UGLY. If you can make your car look like new again, then in the back of your mind, you won’t want to get rid of it. If it has over 100,000 miles on it, get those repairs done. Get the suspension parts updates. Put on new tie rods. Get a wheel alignment done so that you don’t keep wearing out tires. If you have plastic parts or splash guards hanging off the bottom because you hit road debris, go get them fixed or replace. The manufacture put them there for a reason.
Bottom line, STOP MAKING CAR DEALERS RICH! You can fix and keep the car you have. Stop making the excuses. Just got and get it done.
Do all of those repairs cost more than $48,000 to repair? If so, THEN it is time to go buy a brand new car again. But this time, MAINTAIN IT! Don’t wait until you have 10 problems piled up over time with the check engine and ABS lights blinking on your dash like a Christmas tree. TAKE CARE OF IT! Each month, budget money away in an interest-bearing savings account. “PRETEND” that you’re making those car payments, but pay to YOURSELF. Then when something unexpected happens, you have that massive amount of cash just sitting in the bank. It’s almost like self-insurance. Once you make a habit of doing this, it will be so easy!
If your car is 3 months from being paid off, pretend that it’s not paid off. Let’s say your car payment was $600/mo. Once those last car payments are paid off, maybe start putting $300/mo. away into that savings account waiting for something unexpected to happen. And let’s say that years go by and your bank account is getting full. And nothing bad happens. Then guess what, YOU GET TO KEEP THE MONEY! You didn’t pay another car dealer again with 60 to 72 payments of anguish.
Stop making car dealers rich! Make yourself rich! Listen to some Dave Ramsey podcasts. He has interviewed 10,000 millionaires. The majority of them drive 10-year old cars. They didn’t get rich by wasting money on car payments. Most all of them saved their way to wealth. Which is what you should do. Just because you have enough money coming in every month doesn’t mean that you should allocate a huge chunk of it to a car payment. Stop finding holes burning in your pocket. Use that $700-800/mo on a car payment to travel the world or take a nice Royal Caribbean, NCL or Carnival Cruise. Do something fun with the money instead of wasting it away on a depreciating asset that sits in front of your house. It’s just one car accident or theft away from being gone. Stop throwing away your money.
KEEP THE CAR YOU HAVE!