Borrowing with smarts (part 4)

Planning for your next auto purchase

When it comes to trying to live your life as debt free as possible, you have to be certain that when you do have to borrow, you are doing it with smarts. Let’s face it, it will be very difficult for anyone to become debt free and stay that way forever – especially when it comes time to buy a car. This article will give you some great advice on how to plan ahead as much as possible for your next car purchase.

If you have a car now and you have just paid it off, keep making the same payment amount that you did with the car you just paid off but put the payment/money into a savings account for your next impending auto purchase. If the car you just paid off is in great condition, you will be able to save a good amount of money before you buy another. Then when you go to buy the next car you will have a great down payment and this means your monthly payments on your new debt from the car loan will be very affordable. You may even be able to pay extra on top of your new monthly payments to pay the car off faster, saving you so much money and leading towards a debt free life – or at least much closer.

Here is something else to consider in this situation. If you are able to pay off this new car in three years and drive it for ten years (total), and you keep saving the same car payment amount in a savings account, you will have just about enough money in your savings to most likely be able to buy the next car debt free. You may either be able to pay for it upfront or almost in total, leaving you with minimal car payments. Just think about how nice it would be for you to drive around in a brand new car that has little or no payment involved.

As with most plans to become debt free, this one takes time and discipline. It will be very easy fro you to find reasons to break into the money you are trying to save. It is also true that if you are driving a car around for ten years, you will need to replace parts, but if you keep the maintenance up on the car, it will last. Just keep in mind, having a car is almost a necessity in out culture (unless you live in NYC), so it makes sense fro you to plan ahead for the next car.

You will also find that it is easy to be tempted to buy a more expensive, less practical car the next time around if you have that extra saved money. You just have to be disciplined and it is not easy in this society to do so –but it is smart. You may not be able to pay for the next car upfront with out debt for more than the ten years we mentioned, but you will be able to at some point as long as you are staying within your limits and sticking to borrowing with smarts.

Keep in mind, a great car is one that runs well for years beyond the time it is paid for without incurring many unexpected big ticket repairs. One great way to retain your car’s life expectancy and beyond is to keep up with the needed maintenance all the time. Make sure you are changing the oil and other fluids as needed. If you manage to keep a car for 7-10 years, you will begin to gain value from it.

Now that you know much more about buying and saving for automobiles, be sure to read the next section of this borrowing with smarts debt free article as it will cover education and how to plan ahead and borrow money fro tuition smartly.

Part 5…

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