My Story: Buying a New Car

contributed by Rhonda

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I read the most current article in the Dollar Stretcher about being prudent when buying cars. I have also heard that whole argument on Dave Ramsey's show about how only the wealthy should be buying new cars. And for the most part, it does make sense. However, I've had a kind of topsy-turvy situation that I wanted to share with you since it seems that the above mentioned article is running mainstream among many of us frugal types. I think there should be some talk about how to actually handle buying a new car as a non-millionaire. Here is my experience:

The second to last decent used car I bought was a 1977 Cutlass Supreme. These were excellent models. Anyway, I bought it for $2000 cash in 1983. It had approximately 93K miles on it. The gas mileage averaged 14 mpg. For my lifestyle at the time (low miles and cheap gas), it was an excellent car. I drove it for 7 years, during which time it needed minimal, standard repairs (tires, brakes, shocks and the like). I sold it when I got married in 1989 and my husband and I kept just his vehicle, which was newer.

But alas, things changed and we eventually needed another car after moving from the city to the burbs where public transportation was not practical. So, I was back in the market for another used car. By then, used cars were big business for dealers. Not only had the price of used cars gone up exponentially, but also I did not have that amount of cash to buy from a private seller. And I needed a second car to get to my job. So, I got into the ugly trap of paying for a used car from a dealer who could finance me. And, that might have worked had the cars been of quality, but I ended up making payments on top of car repairs. I went through four junkers (each a different make and model) before it dawned on me that making one car payment on a new car with a minimum three-year warranty was far less expensive than what I was doing. My intent was to decide that if I was going to drive abused cars, I'd get one and abuse it myself, thank you very much. Keep in mind, the used cars that I was buying were much newer and with fewer miles by far than that wonderful Cutlass. And if times had changed in the used car business, it was time to change my attitude about buying cars.

Now, here's the catch. Being frugal, I did not feel the desire to purchase a vehicle in the luxury class, nor something that had to have every bell and whistle. I'm finding this to be a common trait those who later lament their "new car purchase" decision. I took my time, despite my husband's kid in a candy store appetite, and test drove several cars in the economy class category as well as a couple of luxury cars just to get that out of my system and his. No problem. After test driving approximately 12 cars, I found one and only one that I would consider driving. I bought it off the lot, which always saves around $1000. I also decided on the four cylinder gas saver as opposed to the more expensive, however more powerful, six cylinder of the same model. Five years later, I now have a paid off car with low miles, no damage from abuse, and good gas mileage in an increasingly scary economy. And with each year that I keep this car, I indirectly increase my income from not having to make payments.

I think for people who end up in a situation like mine where they need a car, but haven't saved for it, they can pull off buying a new car as long as they don't get greedy. And I can't emphasize enough how important it is to maintain and keep your vehicles. That was the lesson I learned from buying abused cars, which seem to be the only type on the used lots these days. Another message this sends to the auto makers is that no matter how many years they can stretch out our payments, the bottom line is to never buy a new car for over $20k. I believe this may already be happening since many new cars are beginning to be priced well below even that figure.

Yes, it is the ideal situation to pay cash for your car. But many of us learn these lessons too late for the situation at hand. So, you bite the bullet one last time, but make it as painless as possible. And you try not to do this on credit more than once. Then, you can get back on track. Oh, and you're probably wondering what I bought. It was a Mazda 6i.

"My Story" is a regular feature of The Dollar Stretcher. If you have a story that could help save time or money, please send it by

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