How did you buy your car with cash!

Discussion in 'Budget Board' started by kkmcan, Aug 4, 2006.

  1. kkmcan

    kkmcan Official Mouse Fan

    Apr 23, 2003
    I would love to be able to save a set amount each month towards a new car which we will need in a couple of years if not sooner. How did you buy your new car with cash?

    Saving up a certain amount each month? Buying a cheaper used car? Paying yourself a car payment until you had enough? Need some ideas on how to get started on this.

    I hate having car payments and we haven't had one in a year so I don't want to end up back there again.

  2. MrsPete

    MrsPete DIS Veteran

    Feb 24, 2002
    Combination of these two tactics.

    We had to finance our first couple cars, but we kept driving them until they were literally dead. Our minivan kept going two years longer than we thought possible; we worried about it a bit, and we had to put some money into small problems occasionally, but essentially we had two "free years" that we didn't expect to have -- that was a great opportunity for us to get ahead. We resisted the temptation to "trade up" after a few years. Once the car was paid for, we continued to "pay" into a savings account, which we used for the next car.

    We also drive cheap cars. Neither of us is really a "car person"; it's just not our thing, so it's not really a sacrafice for us not to drive something shiney and sporty. Don't get me wrong: New cars are great -- I just can't grasp the idea of spending a year's salary on something that could be wrecked in an instant.

    One of our cars is near death right now. Our long-term plan is to buy a 2006 Honda Civic (we're waiting for the 2007s to come out, hoping for a good deal), which will be my car -- hopefully -- for the next six years. When my daughter heads off to college, a six-year old, one-owner Honda will be a great college car for her. It'll be paid for and inexpensive to maintain.
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  4. sk!mom

    sk!mom DIS Veteran

    Dec 30, 2000
    We always buy good used cars. They have all been about a year old with only 10 to 12,000. We then drive them until they become a maintanance problem- this has typically been at least 10 years.

    To get started, we saved the car payment that we had been making after the car was paid off. We have just continued that strategy. We are frugal by nature so paying cash has probably helped us keep a car longer. When faced with laying out that much cash (even when it has been saved) we seem to put it off as long as possible.
  5. pearlieq

    pearlieq <font color=green>They can sit & spin<br><font col

    Aug 3, 2004
    We set aside a certain amount each month for future car purchases. It should be enough to cover my next car, but I'm also putting extra money in so we can cover DH's as well. Eventually we should have enough to perpetually replace them on a set schedule.
  6. peanut12392

    peanut12392 Mouseketeer

    May 9, 2003

    We have a 2006 Honda Civic and just love it. It replaced my 1992 Accord with over 280,000 on it. (That Accord is still running for the person we gave it to!)
  7. ohiominnie

    ohiominnie <font color=teal>It's interesting when you google

    May 31, 2000
    I need to do this. When we first got married we drove a used, paid for car. (bought off of relatives) Then we got "rich" working with no kids and bought a brand spanking new car (well, only *I* was working, dh was getting "cost of living" expenses via school loans!.) :earseek: We've bought a new car about every 3 years since then. And, when finances were too tight to BUY a car.....yes, horror of all horrors.....we leased.

    Our excuse was that we needed a good, DEPENDABLE car for driving around in....ESPECIALLY once we had kids. Must get them where they need to go and get them there safely.

    I've been listening to Dave Ramsey now for about 3 weeks and reading through his book. I cannot believe how STUPID we were. We now have an SUV (paid for through my dh's office---it comes out of his kitty, but *I* don't see the bill) and a 2005 Camry which I love. We'll be paying that off early and I can definitely see me driving that for many years to come.
  8. ducklite

    ducklite <font color=teal>Take the Poly, it's fabulous!<br>

    Aug 17, 2000
    Figure out approximately how much a monthly payment for the car you think you'd like would be, and put that amount into a savings account every month. If you already have an idea of what type of car you'd like, get a credit card for that manufacutrer to start earning points towards the downpayment.

    Keep in mind that if the dealer is offering a 0% interest loan, it can sometimes be beneficial to finance and keep you cash earning interest. I did this when I bought my ION.

  9. nbodyhome

    nbodyhome DIS Veteran

    Nov 15, 2005
    Part of the money we are spending towards DH's truck payment (which ends within a year) will go towards a car for me. My car is 94K miles, but may get a few more years if no accidents, etc. (maybe more than that). I'd really rather pay completely in cash for a newer car if I can.
  10. txtink17

    txtink17 Sticks and stones, Luv.

    May 25, 2006
    This is what you do:
    You save $100 a week ($400 a month) for 10 months, then buy a used car for $4000 cash. You do that again for another 10 months, so that you have $4000 again. You sell your car for $4000, remember it hasn't depreciated much, you've only been driving it for 10 months. Take the car money ($4000) plus the money you've saved ($4000) and now you have $8000. Kia sells a small car brand new for $7900, or you can get another used for $8000 cash and save another $4000 in 10 months, then you'll have $12000 for a new car. The whole process takes only 20 months for an $8000 car or 30 months for a $12000 car, still much shorter than a car loan (4+ years) plus there's no interest or fees. You just pretend like you have a car payment.
  11. CJMickeyMouse

    CJMickeyMouse Please do not disturb.

    Mar 22, 2000
    We only buy when they have the 0% interest deals. So basically you are paying cash - just not in advance. If you have money in the bank, I agree, let it stay there and earn interest and finance the car. That just makes it a better deal!
  12. badblackpug

    badblackpug <font color=blue>If you knew her you would be shoc

    Oct 18, 2005
    I did the same. I bought my Honda Accord cash. I have the advantage of being able to pretty much get overtime at my job any time I want (I am a nurse) I just picked up an extra shift each pay period and set that shifts pay aside. I don't buy used cars, I figure somebody got rid of it for a reason!
  13. dvcgirl

    dvcgirl DIS Veteran

    Nov 1, 2002
    People get rid of "used" cars for lots of reasons, many times they are gently used leases. Many times they simply can't afford the payments. You can get a killer deal on a used car is you shop around. A new car depreciates roughly 20-25% in the first year! And so, if I can get a car with 10-15K miles on it at a 20% discount...why not!? Even better, give me a car with 20-25K on it for a 40% discount on what original buyer paid. We buy cars and keep them forever anyway, and so 20K miles is nothing when you plan to keep it for another 180K + miles.
  14. neatokimmo

    neatokimmo DIS Veteran

    Jul 1, 2006
    txtink17, that is a great plan! :thumbsup2

    I didn't have cash to buy my car straight out but I did make it a big priority to pay it off fast (its was around 1.5 years). Then that money went into the house and now its going into savings. Once you get rolling with cash for things it just seems easier. Be sure to check out brands you might normally not like Hyundai. My Elantra (bought new, I keep cars a long time) is about 12K now and its been a great car.

  15. MyGoofy26

    MyGoofy26 DIS Veteran

    Sep 12, 2004
    I bought my car used one year old and can't imagine buying new. Granted it is nearing the end of it's life, and it's "only" 7 years old. .. but a few years of commuting an hour and a half each way for class put a LOT of wear and tear on it. It has nearly 130,000 miles and just recently started having little things go wrong. I think I can get another year out of it.

    You're exactly right - it's not just problems why someone gets rid of a car. People tend to get a little ambitious when buying cars so they get in over their heads and buy more than they can afford, or they simply realize they don't like the car they bought. A lot of dealers buy at auction, so you get the bank repo's for the people that got WAY in over their heads. Most of the used cars on the lots are there because of previous owners' financial mistakes, not because of faulty mechanics.
  16. ceecee

    ceecee DIS Veteran

    Apr 6, 2001
    My Ford Windstar has been a maintenance problem since year 3 and we bought it new. We thought of paying for it outright but with the 0.5 financing they offered we put the money we had saved onto the mortgage and paid it off. We like to drive cars forever too and with our Oldsmobiles this worked well, but this Ford is another story. Everytime we take it in for repairs it's over $600.00. (Two times in two months most recently!). The service guy even told us "we have some great deals on a new one" like I would buy another Ford with the problems we've had? It's 5 years old and I doubt it will get to 10. It only has 68,000 on it. Our Ninety Eight has 120,000 (DH drives 50 miles a day to work and back) so we will soon be looking at car payments again.
  17. barbeml

    barbeml DIS Veteran

    Sep 8, 2002
    I bought my last car two years ago for half price and paid cash.

    I was an original GM Card holder. When GM offered a $4,000 rebate two summers ago, I was able to combine it with $3,300 in GM Card earnings plus a dealer discount and a trade in. I paid $11,000 cash for a car with a sticker of $22,000.

    Since I kept my previous car 7.5 years but kept paying my car payment into my savngs account once the loan was paid, I had more than enough to pay cash.

    Even though we paid cash for our last two cars, we keep making two "car payments" into our savings each month.
  18. staceyfe

    staceyfe DIS Veteran

    Jan 15, 2001
    Yes, we also are putting a set aside amount away every month. We eventually got rid of car payments by living frugally and paying extra toward the car loans. At the beginning of this year, I decided we better start saving for when we do need a new car.

    Question to the 0% buyers: Don't you think the 0% is really factored into the bottom dollar of the car? I'm all for the 0%, but if I can get the car cheaper by foregoing the 0%, I'd rather do that and pay cash. I'm not sure how salesman/sales managers respond to cash buyers. Generally, they will make money on the financing, so I'm not sure how to best negotiate w/ cash. Any car dealers out there have tips for this?
  19. DiznEeyore

    DiznEeyore <font color=navy>Donkey-Huggin' DVC Member<br><fon

    May 1, 2000
    In our case, I don't think it was factored in. I have a Saturn Ion -- Saturn has bottom-line pricing, and the 0% was only for a limited time, so I don't think anything was "added" to the price to compensate. Plus, we got my brother-in-law's Saturn discount, so it was a great deal. I love my car, and it's worth quite a bit more than we owe on it.

    We plan to drive it 'til it stops (hopefully at least 5-7 more years!) and since it will be paid off in 2, make 3-5 years' worth of "payments" to our savings account to save up for our next car. :thumbsup2
  20. CEDmom

    CEDmom <font color=FF3300>Knows 101 things to do with an

    Apr 10, 2003
    DH bought his car with cash last Sept. We generally live well below are means so with a great trade-in he was able to pay the balance in cash. We've since bought a new house so our cash reserve isn't what it once was. I'll need to get a new car in the next year or so. We'll likely have to finance part of it. However, once DD goes back to school in a few weeks and we don't have camp costs I'll start putting $ aside each paycheck.
  21. prgirl

    prgirl Earning My Ears

    Aug 3, 2006
    let me tell you a story:

    I had my 1992 toyota paseo since 1996, I bought it secon hands just because that was the car that I wanted, going to college and not much money on my pocket still a cute and fast car. I changed it recently this year in january because it never had a/c system and here in PR is always sweaty and hot, plus I was moving on with my life so I figured I had to let go off him too :crazy: Big Mistake.In the dealer they gave $2000. for the car plus some savings I had I bought a 2003 Kia Rio, since I had some good references. I was not looking for luxury but for something that last at least the same years the old one did.Let me tell you the old one never left me on the road I just changed the basics. when I went to the dealer the next day my old car was already sold :sad2: I came out the dealer crying instead of happy. My "new" car,well I don't have too many options right now, let's say it's new but not beloved.

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