Believe it or not, 22% of cars and trucks are sold for cash. Who are these people who can buy a vehicle and pay cash for it? For the most part they're people just like you and me who have made up their minds to get control of their lives. Instead of living like the masses, these are people who got fed up with business as usual. They decided that eating out all the time and buying designer clothes they couldn't afford was crazy. They realized that getting ahead was something that only happens when you get really tired of being broke all the time. There was that moment in time when they finally got tired of living on the edge-so they changed things.
The good news is-you can do it, too. Don't believe the lie that only rich people buy cars with cash. It ain't true. Lots of people on their way to becoming financially free are buying vehicles and paying cash for them. Besides, how do you think those rich folks got rich? They didn't do it by making interest payments to someone else!
How To Never Have Another Car Loan
There's a way to never have another car payment-EVER! (And, no, I'm not talking about taking the bus!) This little idea that I ran across has reduced financial pain for a lot of people. Here's how it works:
Step 1) Forget your ego. Believe me, this is the toughest part of all. Egos are expensive to maintain. It's especially hard for a person to forget their ego when it comes to the car he or she drives. For Americans, cars are an extension of our personalities. We show the world who we are by the cars we drive. Even Christians fall into this trap. But if you ever want to pay cash for a car the first thing you must agree to is never drive a car you can't afford to buy with cash. Curiously, by making this determination, many people have gradually stepped up to some of the nicest cars on the market.
Step 2) Save $3,000-4,000 quickly and buy a safe, affordable car. Get focused on saving that $3,000-$4,000. Do whatever it takes: Brown bag your lunches, skip a vacation, work overtime, get a second job. See how quickly you can make this happen. This is enough money in many areas to buy a decent, safe car. (Note: I didn't say fancy or prestigious.)
Step 3) Now, start making monthly car payments to yourself. With your "new" car in the driveway, it's time to start making car payments. But instead of making them to a bank, pay yourself instead. Now, here's where you have to be tough and intellectually honest with yourself-don't ever cheat. Just as surely as you would send monthly payments to the bank, set aside a monthly payment to yourself. Since the average car payment in America is well over $300 per month, I would encourage you to set aside something in that range. Do this for a couple of years. By that time you will have $6,000 to $9,000 in your "Paid-For Wheels" account. Sell your old car. Suppose you get $1,000 to $2,000 for it. Now, you have around $7,000 to $10,000 for a much nicer car.
