Get Off the Car Payment Merry-Go-Round

by Marenda Babcock


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A friend of ours bought a slightly used new car. She brought it over for us to admire. It was a beautiful car! She asked if she looked good in it and I agreed she did. I was under the impression that the purpose of a car was to get a person from point A to point B. I was not aware that it was a fashion statement. As I watched my friend showing off her new car, I had mixed feelings. I said nothing of what I was thinking.

For me to say what I was thinking would have seemed as if I were jealous. Is this the same person who just two months earlier was upset because her family had spent too much money on their vacation and now they didn't have enough to go visit her mother for the weekend?

Is this the same person that ten years earlier was spending their nights hiding their car from the repo man because they couldn't afford to make the payments? After months of receiving stressful phone calls and hiding the car, they finally gave it back to the dealership.

Considering their past problems, I can only imagine what kind of interest rate they must be paying. Still, apparently they learned nothing from their previous trying experiences. Their old car ran perfectly. However, it did have over 200,000 miles on it, but it showed no signs of stopping. According to my friend, their new car would take four years to pay off. After the four years, if they can keep up with the payments, the car would have approximately 80,000 to 100,000 miles on it. History tells me that even before the loan is paid off, they will decide to get another newer car. They will find small, insignificant problems with their now older car. Unfortunately, they will continue riding the new car merry-go-round for many years. It is almost as if they are "renting" cars rather than buying them.

Bob and I got off that merry-go-round 17 years ago and we do not care to ever get back on that nerve wrecking ride again. Of course, people do need cars to get to work and places they need to be. How can you get off the merry-go-round and never get back on it again?

My friends had the perfect opportunity to get off that ride. If I had been asked what I did think about their new car I would have asked, "If you can afford $300 for a new car payment, why not save that new car payment and put that money in the bank while you still have a car that is working?" At the end of one year, they would have amassed $3,600. This is a very nice amount to use to pay cash for a newer but not almost new car. While they are saving up to pay cash for their next slightly used car, they should tell family and friends they are looking for a well-maintained, new-to-them car. Some of the best used cars we have had have been acquired through word of mouth.

Once they have gotten a newer car that they feel comfortable with, it is not time to relax and blow that monthly "payment." They should continue to save that same $300 a month "payment," and at the end of two years, they would have saved $7,200. If they could wait a year longer, they could save $10,800. That amount would be almost the amount they had paid for their slightly used two-year-old car. They could pay cash for the car and not pay any interest on their new acquisition. They could probably get a substantial discount because as we all know "Cash Is King." If they have trouble making that $300 a month payment into their savings account, what makes them think they would be able to make a car payment?

It's possible to get off the car payment merry-go-round, but it takes patience, discipline, and proper planning.

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