Thursday, October 19, 2017

Beat Up But Paid For – What Do You Drive?



Beat Up But Paid For – What Do You Drive?



Drive a beater if you want to get ahead.  Below are three examples of the type of car you could drive instead of having huge monthly car payments.

A huge factor in most working adults’ lives is the tool they use to get to and from work, shopping, or even playing taxi for their kids.  This tool I’m talking about is their vehicle.  Why do I keep calling it a tool?  Well, it is.  AND, that’s all it is.  It’s a machine made to accomplish work – a tool.  Whether brand new off the dealer’s lot or barely running and falling apart, it basically does the same thing.  When I was deeper in debt, I had a new Toyota Tundra pickup truck and two motorcycles along with a small credit card balance.  Those four items represented speedbumps ROADBLOCKS to my financial happiness and my plan to increase my net worth through a higher savings rate.  They were negative liabilities that kept my net worth in the RED.  With the associated monthly payments, I was living paycheck to paycheck with no chance of bettering my financial self without either:

1) winning the lottery (which I don’t play)
2) getting a significant pay raise (which didn’t happen)
3) making a drastic change in what I spend my money on

This drastic change was to get rid of all my payments and that started with selling the Toyota Tundra and getting rid of my $550 per month payment (I ended up saving another 150-200 per month in insurance and personal property payments also).  The motorcycles were sold and paid off soon after as well as the credit card.

In order to make this happen, I needed a paid for beater car for transportation.




I already had a beatup and well used 1991 Toyota Landcruiser that I paid $1050 for a few months prior (less than 2 months Tundra payments).  The Landcruiser has around 185k miles on it.  Because I like to have a little insurance and have a tool to get to work, I needed a backup vehicle.  Along came the Blue Beast pictured above, a 1994 GMC Sierra base model pickup currently with 255k miles on it.  Blue was purchased for $500 (less than 1 truck payment) – and yes it ran and drove great and doesn’t ask for much except gas and oil.



I did upgrade this year to a new daily driver and still have the Landcruiser as a backup (my 17 year old son drives Blue).  It’s a 2003 BMW 525i wagon with over 230k miles on it.  I picked it up for $3000 (less than 6 months truck payments)

All of these reliable, yet high mileage, cars require normal maintenance like any other car and they are way cheaper to operate per month compared to a new “reliable” vehicle with its monthly payment.  I work on my own cars, so my repair costs are lower than most folks with used cars, but even if I needed to use a shop for any repairs required, I still bet the overall operation costs would be lower than a new car.  I love not having car payments.  I love having a positive net worth.  I love using my paychecks to invest, save, and build wealth.

What do you drive?  How much is your payment?  How awesome is it to not have a car payment or how awesome will it be to not have a car payment?

8 comments:

  1. Brian, I currently don't have a car so I have $0 car payments. I do have a motorcycle, but that's paid off, and a friend of mine is taking care of it while I work overseas. I'm about to buy an electric scooter for $550. So, that is what I am driving right now.

    Next year summer, I will have 10k in the bank and that's temporarily designated as my purchasing a car fund. If I don't purchase the car next year, then I could continue to save up to buy a new car with cash or a more recent used car with cash (probably more likely). It's really nice not having a car payment and I'm not sure I want to go back to having one.

    ReplyDelete
    Replies
    1. Glen,

      I like your plan for the future car. $550 for transportation now is frugally awesome. Where overseas are you?

      It is so nice not having a car payment and I plan to never have one again.

      Delete
  2. I like this post a lot. Way to identify a money suck and address it. You definitely swung the other way with the pendulum haha While I don't have beater cars like yours, I purchased a Toyota RAv-4 used this year for my wife and I purchased a new Camry in 2013. I picked Toyota based on the longevity and the fact that I should have both of these cars well over 200k. However, that new Camry that I purchased will be my last new car and I'm only buying certified used from here on out.

    Thanks for the great read!

    Bert

    ReplyDelete
    Replies
    1. Bert,

      Thanks for stopping by. Yes, for me it was such a money suck. Nice buy on the Toyota cars. They will last for a long time.

      Brian

      Delete
  3. I proudly drive a sedan that's from 2004! Unfortunately it is slowly starting to have problems. I plan on keeping it as long as possible though. I just pray it doesn't start turning into a money pit.

    ReplyDelete
    Replies
    1. CD,

      2004 is an awesome "old" car. If it seems like it's going to turn into a money pit at some point, start saving for its replacement now to be ready. Thanks for stopping by.

      Brian

      Delete
  4. I drive a piece of crap 2003 Ford Taurus. I'm a train commuter, so I just need a car that will make it 10 miles a day. I bought the car 5-years ago from a neighbor for $2,250. Hopefully it runs a few more years.

    ReplyDelete
    Replies
    1. Yeah!!!!! Piece of crap cars do the job, especially when you don't need them much.

      Delete

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