How much is your car payment?

[Am_I_There_Yet]

I have a twist on this:

I'm interviewing for a position that requires you to drive a 4-door sedan that is no older than four years.

So - I drive an '04 Maxima, that I purchased new in '05. That means if I get this position, I have to get rid of a car that currently only has 12,000 miles on it, in less than two years (if they go buy its year).

At least I'll have a good excuse for once, for trading in a car after only three years!

 

[disneysteve]

$0 here. We own both of our cars.

 

[LisaNJ25]

I just refianced today. I was paying $323 for a 2002 Cevey Venture. Now I am down to $271

 

[disneysteve]

Apparently I'm not hanging with the right group of friends. I don't know a single person, NOT ONE, who has ever paid cash for a car. You guys seriously have $20K+ lying around? Wow, that's it, just wow.

Our cars are now both paid for (not early either, lol) but when we had payments, they were each appx $350 a month.

So that means you should now have about $700/month going into a savings account to use when you buy your next cars. That will give you over $25,000 to draw from in just 3 years and $42,000 in 5 years. That should be more than enough to cover the cost of your next cars when you count in the trade/sale value of the cars you are replacing.

It isn't hard at all to have $20,000 saved up if you keep putting that payment money aside once the initial car is paid for. You didn't need that money to live while you were making payments so you don't need it to live after the payments are finished either.

 

[ead79]

We alternate buying new cars so we only have one car payment at a time. We plan to buy a new car every 5 years, alternating which car so that each one is 10 years old when we replace it. My payment for my Honda CR-V is between $400 and $500 a month (we did zero down—long story involving DH’s SUV dying in a blaze of mechanically expensive glory!).

To those that can’t pay cash for cars: don’t let others get you down. Sometimes there seem to be an air of superiority when it comes to financial matters here on the DIS. We all just do the best we can given what we feel is best. We, for example, prefer to have regular monthly payments instead of potentially huge repair bills for an older used car. Just do what you think is right for you.

 

[poohandwendy]

To those that can’t pay cash for cars: don’t let others get you down. Sometimes there seem to be an air of superiority when it comes to financial matters here on the DIS.

Why would anyone be 'brought down' by others not having car payments or their being able to pay cash for a vehicle? Some people don't have house payments, I do...why would that bring me down?

I think sometimes people are too sensitive to comparing themselves with the Joneses ...I usually don't even answer these types of personal finance threads because frankly, this is no one else's business.

 

[zalansky]

Apparently I'm not hanging with the right group of friends. I don't know a single person, NOT ONE, who has ever paid cash for a car. You guys seriously have $20K+ lying around? Wow, that's it, just wow.

My thoughts exactly.

 

[budbeerlady]

I drive my huge Buick Lasabre 1986 that I paid $1000 for two 1/2 years ago! I gotta have a old cheap car, too many miles driving to work and back. Plus when the postal service lady hits the side of your car at a stop sign she gets way more damage than you do!!!!

 

[Brianne]

We don't have a car payment. I hate our van, but I hate the idea of a car payment even more.

Some people asked about how people do it---we don't buy new vehicles. If you buy a car that's only a year or so old, it's still usually under warranty, yet has already depreciated enough to be more affordable. Unlike a house that can increase in value, very few cars do the same, from what I've seen. But it all comes down to what you want & what your comfort level is (a collective "you", not any one person on here!)---I wouldn't let someone else's decisions or choices bother you.

 

[dvcgirl]

To each his own. We love our stuff and our travel too. I can't imagine doing it for "appearances". We have it and do it because we love it. If we have to keep up with some of our friends we'd have to go out and buy private jets! No thanks! We will have a car payment but it is nothing for us to worry about. We have the money and we pay them. Actually when we do have payments we just put in our account and Quicken pays it each month. We don't even have to worry about sending it out! LOL! DH is a saver too so he does sock away quite bit but we also know we can't take it with us and thoroughly enjoy the here and now.

I guess people don't go into to it thinking that they're doing it for "appearances", but that's what it becomes. The Total Keep Up with the Joneses gig. I've read your posts in the past as well skiwee1, and my DH does the same thing that your DH does...executive level in the software industry. So, we've traveled in the same circles at times...if you know what I mean . And so we both know the kind of incomes we're talking about here. And yet you said that you didn't know anyone who paid cash for cars. Isn't the ludicrous when you think of it? We're talking about people who are making really, really hefty salaries here....and yet they either have car payments or are leasing. Leasing I get to a certain degree. Especially if you are at a very high level and use the car for business purposes. Other than that, how someone making 200K on up can't pay cash for a car...well, it speaks to that lifestyle I was alluding to. Again, I'm talking about people we know and have known...not you.

We were out in California in the late 90s and we saw fortunes squandered...I mean enough to blow you away. And we were in our mid to late 20s at the time and it really stuck with us. We saw people who were millionaires go bankrupt, and it wasn't pretty. That's when we made the decision to not travel down that road because of "stuff". Even so, we did buy a big house (built it actually) in an expensive neighborhood in NJ....and it was even worse there. I know for a fact that there were people in there who have ever bell and whistle in their home...I mean top of the line applicances, electronics, cars....and very, very little put away for retirement. We went to birthday parties for children that would rival most wedding receptions. And yet, some of those people had very little put away for the future. After four years of living there we felt like most of these people were mostly just about things and not so much about people. It was all about who got this car or that car, who had the best landscape designer, who threw the most lavish parties....and it just really wasn't for us.

We have learned that really big income earners always thing that they will just continue to earn more and more.....and so they don't really need to worry about saving as much as Joe Blue Collar. And yet, we all know, that's not the case. I agree, you can't take it all with you. I guess it's about finding the balance. We're quite satisfied with the life we have and yet we still live well beneath our means. For us, early retirement is really important. We'll sacrifice some of those luxury items we could technically have today (if we so desired), for lots of extra time off down the road that will be funded by a huge nest egg.

We're always amazed at how much we can do with less money just by taking the time to look for bargains. So many of our friends would never look for bargains, especially when it came to travel. Or they wouldn't stay at a certain hotel because it didn't have a world class spa...that kind of thing. They would just book it...whatever the cost. We're doing two weeks in Europe this December for what our friends would spend in a week at Disney (because it had to be high season, conceirge....all of that).

So, we're all about no payments to anyone...ever. And we love the freedom that comes with that lifestyle. It's easy to say, "well, you can't take it all with you" when you have a rock solid saving and investment plan (which is seems that you have in place), but other than that I think that it is just an excuse not to save. It would be totally awesome to spend every cent we made...I mean...really awesome...lol! But then retirement in our 50s (and conceiveably earlier) would not be possible. And so it's a choice we have made...no car payments and never-ever a car lease.

 

[dvcgirl]

Why would anyone be 'brought down' by others not having car payments or their being able to pay cash for a vehicle? Some people don't have house payments, I do...why would that bring me down?

I think sometimes people are too sensitive to comparing themselves with the Joneses ...I usually don't even answer these types of personal finance threads because frankly, this is no one else's business.

I don't get why anyone would be "brought down" by others not having payments either. It would inspire me that it is possible, because it knocks hundreds of dollars off of your expenditures. It frees up money for savings or for other "wants" that you may have. It's a very cool thing. And no, it's not easy initially. The key is to buy a *really* used car at first...and go from there.

I was listening to Dave Ramsey the other day. Young guy called in....he's 27, the DW is 24, combined income of 41K a year and they each had a $500 car payment. I understand that they were young, but you have to wonder if they own a calculator as well . Of course, Ramsey's first words to them was "sell those stupid cars!" lol! Unfortunately, this couple is all too common these days.

 

[EthansMom]

To those that can’t pay cash for cars: don’t let others get you down. Sometimes there seem to be an air of superiority when it comes to financial matters here on the DIS. We all just do the best we can given what we feel is best. We, for example, prefer to have regular monthly payments instead of potentially huge repair bills for an older used car. Just do what you think is right for you.

Honestly, I haven't seen any posts on this thread that I think are overly boastful or superior. Everyone's finances are different. Having no car payments can be affected by so many outside factors: age of the poster, income of the poster, need for a newer car for a myriad of reasons, etc... Plus, if the poster was able to get a low interest rate or a reasonable lease, well, why not?

However, when people post in disbelief that other posters like to pay cash for their cars, most folks here on the DIS are happy to tell others how they did it. I've found most of the financial posts to be informative and honest.
Sometimes a little brutally honest, but you rarely get that kind of honesty IRL.

 

[jgmklmhem]

Why would anyone be 'brought down' by others not having car payments or their being able to pay cash for a vehicle? Some people don't have house payments, I do...why would that bring me down?

I think sometimes people are too sensitive to comparing themselves with the Joneses ...I usually don't even answer these types of personal finance threads because frankly, this is no one else's business.

I think it is the tone of some of the posts with quotes such as "I would never have a car payment" which makes people think that if they do it is wrong (again probably just message board wrong tone reading).

Both of my cars have interest rates lower than what ING's regular savings is putting out so having a payment is actually making me a little money on at least my wife's...mine is a different story. I am also one who would rather take a long term hit for a few thousand versus not having a reserve on hand on the occasion of a lost job or hefty medical bills.

 

[DisneyMommyMichelle]

just shy of 325 for My Honda Civic, other one is paid off

 

[slo]

Each of our cars are over $500

 

[poohandwendy]

I think it is the tone of some of the posts with quotes such as "I would never have a car payment" which makes people think that if they do it is wrong (again probably just message board wrong tone reading).

I think there would be less communication problem if people would remember that "I would never have a car payment" is not the same as "I don't think anyone should have a car payment"

 

[Alice28]

Our 2002 Outback is paid off.

Just bought the Tribeca last Saturday...are you ready?? Our payments are $450 a month! We could have put more down, but decided to use the money for some other stuff. Oh, how I love, love, love my new Tribeca!

 

[*Flower*]

We're paying $442 a month for two cars.

MY 2002 CR-V is $282 and DHs 1999 Civic is 160.

We did have only one car- but DH went back to school, and trying to get me home from work before going to class was a bit much.

I'd accelerate the CR-V payment, but I'm busy doing 4 mortgage payments every month. That way by the time we're ready to retire, the house will be paid off.

 

[NeverlandClub23]

Too much...but I want so much out of an SUV (leather seats, heated seats, sunroof, good fuel economy, etc.) that I feel it's worth the money. I have a 2005 Mercury Mariner for $440 a month.

 

[NeverlandClub23]

To those that can’t pay cash for cars: don’t let others get you down. Sometimes there seem to be an air of superiority when it comes to financial matters here on the DIS. We all just do the best we can given what we feel is best. We, for example, prefer to have regular monthly payments instead of potentially huge repair bills for an older used car. Just do what you think is right for you.

Well said! I always love your posts. They're so nicely put.