Currently, my wife and I own three, paid-for automobiles, a 2001 Accord, a 2000 Town and Country, and a 1994 F150. Here’s my plan to replace our automobiles, over time, and always pay with cash.
I plan to save about $10,000 by 2009 and use that money to purchase a newer, used minivan to replace the Town and Country. (By selling the current Town and Country for a couple thousand dollars, I will have between $10,000-$13,000 to spend on a nice, new-to-us, dependable van.) By 2011, I will have saved an additional $10,000 so that I can replace the Accord. (Again, I can sell the Accord for a couple thousand dollars and add that money to my savings, and then I can purchase a nice, used car.) I plan to drive the old truck “until it falls apart” and I will only replace it if absolutely necessary. I will continue this “saving money-selling current automobile-buying used” process over and over.
Two years ago, we purchased the minivan for less than $8,000 and we LOVE it. I just cannot IMAGINE buying a new car. For less than $10K, we have a very dependable, very reliable, easy-to-insure, minivan. I have a good friend who is a mechanic, and he’s cool about giving any perspective purchase a thorough “once-over”.
I realize that the cost of automobiles (and all goods and services) will go up over time, but so will my salary. So, instead of $10K, I might need to save $12K or $15K. Either way, the basic plan is to save up some cash, drive my current automobile until I am ready to make a purchase, sell the current automobile, and replace it with a clean, reliable, affordable used car.
How about you? Do you plan to pay cash for your next car? If so, will it be a “new” car or a “used” car?
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