Why do you have such an expensive car? Did you consider selling it and buying a much less expensive one?

The first car my wife and I bought was ~$11,000. Next was $3,600, then $5,500, then $2,900, then $1,300, and now $1,500. (And only one of those “died”… others we sold or were in accidents.)

Jenn – Yes, we are planning to pay cash for our cars from now on. Once we pay off our debt, we are going to pay ‘car payments’ into a savings account. I’m like you though, I drive my cars until they die!

Dollar Bill – We are currently working to build up our emergency fund again. But since we are both in stable jobs, we are going to put a large chunk toward the loan.

Jean – So true about the Walmart comment!!

We always buy ~3yr old vehicles with cash and then drive them until they die (or become unsafe and/or too costly to justify). I figure if a car payment would be $300/mth for a round figure, then as long as I’m spending less than $3600/yr on repairs I’m ahead. The insurance sure is cheaper on an older vehicle. I got my 2000 Civic in 2003, so I’m heading into my 7th year with it. Until this past fall, I had spend about $500 redoing the brakes once, and replacing the wiper motor. Other than that it was only DIY oil changes and replacing tires, which I would have done on a new vehicle too, so I don’t count that. This past fall a friend (and Honda mechanic) kept it for a week and fixed up all the little things that had been failing but not stopping me from driving it. $1500 later it’s good as new and I hope to get another 5yrs if the body holds up.

So in total, for the 6+ years I’ve had it, repairs have been $2000 or $333/yr – about the equivalent of one car payment a year! It won’t be pretty by the time I retire it, but it also won’t owe me anything.

I used to say that a used car was all I needed because what I drive isn’t who I am and that it’s just a way to get from A to B. Now that I think about it, I guess it really does represent who I am. It says I’m a frugal person who doesn’t place any importance on a vehicle and instead spends her money on the things she does value.

Isn’t it amazing how your perspective on things changes when you’re firmly in the mindset of truly evaluating where best to spend your hard earned dollars? I’d bet that in the past we’d all have looked at that refund and instead of seeing a 60% loan payoff we’d have seen it instead as an opportunity for a holiday, enormous TV or other splurge, and ignored the debt for another day.

Good on you for making the most of it!

Dollars Not Debt

Thanks.

I file as head of household, have one child, and have 8 exemptions on my W-4 and am STILL getting over $2,000 back on my federal taxes. I’m not changing it because I’m concerned that I’ll get hit with the AMT some year, especially if Congress doesn’t continue to pass the annual “patch” to protect middle-income taxpayers.

Congrats on wiping out so much of the car loan though!

All that just to say, YAY you! Great job and I love it when people get OUT of debt!!!!

I’m only gonna get $792 (according to TurboTax). But that’s still an entire month’s debt payment extra!

And you’ve helped me save money… I don’t think I’ll be going to the grocery store tonight with that image in my head!

Congrats on wiping out 60% of your car loan – that’s AWESOME! It KILLS me to see how much goes to loan payments every month. I’m paying bi-weekly now (automatic payment tied to my direct deposit) so at least the balance is going down more quickly.

BUT, here’s a question for you: $6K seems like a HUGE tax refund. Would it behoove you to consider raising your number of exemptions so more of that money shows up in your paycheck rather than letting it go to a savings account of sorts at the bank of Uncle Sam? Easier said than done, I know – I don’t want to owe the gov’t ANYTHING, and would rather them owe me @ the end of the year. 2009 was the 2nd year in my house, so I’m hoping that I’ll be able to make some changes to my exemptions this year.

Congratulations on the impending dent in your debt…..that must be a wonderful feeling!!!!! You have just motivated me to get my act together here to do my taxes….. stay tuned……

Paying off 60% of your car loan?? YAY! YAY! YAY!