I own a 2001 Honda Accord. It’s a great little car, and even though it’s a decade old, it still gets really great gas mileage. The paint and the interior are both in pretty decent shape, despite the fact that the right-front panel was recently damaged and repaired. I like the car, but with growing kids and the fact that it has nearly 200,000 miles, it’s time to think about replacing it.
It never hurts to plan ahead – even years ahead – so that’s what I’m doing.
I’ve already started to compile a list of used vehicles that I might want to purchase. I want to buy something a little bigger than the accord, maybe a small cross-over or a mid-size SUV. I’ll be comparing gas mileage, insurance cost, safety information, etc.
I have created a budget category labeled – car replacement – and I’ll fund it each month. Instead of making payments to a finance company, and paying interest, I’ll be making payments to myself, and earning interest. My plan is to save up 100% of the cost of the newer car and avoid financing.
I have a good relationship with my insurance agent. When purchasing a newer automobile, it’s very important to know how much it will cost to insure the automobile. I’ll take a list of four or five automobiles to him. My agent will run the numbers and let me know how much it would cost to insure each.
The Accord is in good shape and I hope to keep it for a minimum of 3 years. At that time, I’ll consider selling it, trading it, or keeping it. My oldest daughter is almost 11 years old. In just over 5 years, she’ll be ready to get her license. It would be great if the Accord makes it that long, even if she just uses it for a little while, as she learns to drive.
Obviously, if I want the Accord to last 3 (or more) years, I need to continue to maintain it. I’ve recently had new tires put on it. I change the oil and have it serviced on a regular schedule. Fingers-crossed, when I’m ready for the newer car in a few years, the Accord will still be in good shape, ready to be sold, traded – or kept.
Living the debt-free life, it’s imperative that I plan – plan – and then plan some more. There’s always something to think about, something to prepare for, something that will need replacing. Saving enough cash to pay for the things we want keeps us out of debt – and in the long-run – save us money!