Thursday, February 3, 2011

Avoiding Auto Debt

Over the years, one thing that has helped keep our finances afloat is the lack of a car payment. I haven't had one since 2000 or so, and going back to about 1995 I can see where that payment or the lack of one has made the difference between being independent, or needing help to get by. Since we live in a car-centric area, living without one is difficult - not impossible, but difficult.

My last three cars have all been paid cash; the last two were bought from people I knew. They were about $1000 each - if they were under that, I quickly paid the difference in repairs! The one I'm driving now, I got a deal on (a sympathetic co-worker sold it to me) and paid $700. Followed two weeks later by replacing the timing belt and a couple other items, to the tune another couple hundred. Normal maintenance, just without warning. I don't mind; I'm getting decent cars and driving them till they're ready to be junked. At that point, I get the next one and sell the old one to the junkyard for $100 or so.

Dear Fiance recently mentioned that the current car is getting up there in mileage (142,000+), and perhaps I ought to start thinking about needing another one so as not to be caught off-guard. I agreed this would be a good idea - I don't remember any car lasting much more than 200,000 miles miles, at least that I've owned. So I checked the local paper. Twice. There was nothing listed under $1500, and all of those were 120,000 + mileage. Not what I was expecting! So I pulled up Kelly Blue Book, and compared prices first to an advertised car (they were asking full Blue Book price for fair condition) and then to my car. Mind you, I have never priced it before. The price on the one I have is comparable to what's currently being offered in the paper. Because of some minor damage (all cosmetic), my car is actually a better deal than what I could replace it with right now.

So, I've reassessed. We do still need to save towards the next car - but $2000 instead of $1000. The car I have will continue getting good care, and I'm going to go ahead and fix some of the annoying items as I can - reglue the headliner, and get the AC fixed. I haven't had working AC in a car since I had a car payment, but the summers are just getting too hot for me and I don't want to deal with it anymore. Since this car has 142,000 miles on it, and I average 7,000 miles a year or less, the car has about 8 years left before it hits 200,000 miles with my current driving habits. If my driving habits change, I'll have to adjust the plan accordingly. And every year or so I should start pricing my car, and seeing what's available in the area for replacements so that I can increase the replacement fund when it becomes necessary. I have no guarantee this car will last to 200,000 miles, but taking good care of it will certainly increase the chances!

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