Automobiles

Drive your vehicles as long as you can.  Don’t worry about “keeping up with the Joneses”.  I have driven every one of my cars progressively longer.  My first was a Cutlass Supreme that I bought my junior year of college.  I had wanted to purchase one the year before, but my dad thought that I should save money for a while longer.  I was still in school full time, and working two jobs.  I saved for another year, and paid for half of the car in cash and borrowed the other half.  After 3-4 years, I had graduated college, earned my CPA certificate, and paid off the car.  It seemed to me that it was time to buy another car—with another loan, of course.  My dad said, “Why would you want to buy another car?  That one runs fine, you have paid it off, having no car payment is making you money.”  So, I continued to work and save my money.  In the meantime, I bought a house, and being a good saver, was about to put about 20% as a down payment.  Having a mortgage of less than 80% meant that I didn’t have to purchase mortgage insurance, which saved me money on my monthly payment.  I drove the Cutlass for 7 ½ years, then bought a small BMW—the definite SPLURGE of my Sprugal Lifestyle.  Everything was trucking along fine with work and payments until I got a 25% paycut at work—that is extremely significant when you have both a house and car loan.  (I had heard through the grapevine that someone had mentioned to my boss that he was obviously paying his employees too much if they were able to drive a BMW.  No matter that I lived an extremely frugal lifestyle in order to afford the nice sports car.)  That taught me a very important lesson—it is no fun to be controlled by your debts.  I had to go refinance my BMW at the credit union—their first comment was, “But you haven’t missed any payments.”  I explained to them that I would run out of funds in 3 months—they extended the loan for another two years, and I have never had another car loan since, I have only paid cash and only bought a car that I could pay for in full before I drove it off the lot.  I drove the BMW for 13 years, then bought a Lexus RX 300.  I drove it for 14 years, then my younger son drove it when he turned 16 for 4 years.  When my older son returned from 8 months living abroad, I gave it to him—that car is 19 years old and still running.  We currently own 5 cars, three of which are approaching the 20-year mark.  We have taken good care of the cars, and only carry liability insurance on the 3 older cars.  Older cars are usually much less expensive to keep rolling, but it is really nice to have one more car than drivers, so everyone still has transportation even if one is in the shop.