Reprinted with permission from No-Debt Living, copyright 2000 No-Debt Living. Robert Frank is editor of No-Debt Living, www.nodebtnews.com, which provides financial, consumer and time-management news with a Christian perspective.

Automobile loans are the second most common source of consumer debt for the average family, led only by credit cards. In addition, they are often the second most expensive form of consumer debt.

Unfortunately, many families have surrendered themselves to the idea that a monthly car payment is just a way of life. Instead, they should resolve themselves to permanently eliminate automobile debts from their budgets. And, yes, it can be done.

Need vs. Want
The first step is realizing that you probably don't need to drive a new car. Buying cars two to five years old can save you and your family thousands of dollars, and, with a little research and persistence, you can usually find an automobile that is in top condition with low mileage. (See related article at www.nodebtnews.com.)

Furthermore, you may be better off hanging on to the car you presently own. Financial expert and author Ron Blue has done extensive research on the topic and contends: "The cheapest car you can own, is usually the one you own right now."

Establish a Replacement Fund
The key to buying your next car without debt is the establishment of a replacement fund. Here's generally how it works. First, look at your budget and determine how much money per month you're willing to spend to buy a newer car. Next, set up a savings account, or set aside a portion of your budget, designed specifically for an automobile replacement fund. Then, instead of buying a newer car, continue to maintain and drive the car you currently own, but make the would-be monthly payment, noted above, into your replacement fund.

With a little patience and self-discipline, you'll buy your next car without a loan.

In addition, don't break this savings habit, even after you have your next car. Continue to make monthly payments (the size may be adjusted) into a replacement fund for your following purchase.

For more money-saving ideas relating to automobiles and other consumer news, visit No-Debt Living, www.nodebtnews.com, where you can view more than 100 valuable articles and resources on financial, consumer and time-management news with a Christian perspective. Copyright 2000 No-Debt Living.