First Time Purchasing a Car with Cash
January 4, 2008 – 11:37 amWelcome to Working For Financial Freedom. If this is your first visit please read about this blog. You can keep updated by subscribing by email or to my RSS feed. Thanks for visiting!
One of the purchases we made on our recent trip to California was the least expected; and not at all planned for.
When we arrived in LA we found out my sister in law was buying a brand-new truck. She was going to sell her old truck (a 2000 Ford Ranger extended cab) to a wholesale dealer for $1,000 or so.
My husband surprised us all by saying we would buy it from her for $2,000.
At the time we had three vehicles:
- Ford F-150 Supercrew (owe money on)
- Ford Mustang GT (owe money on)
- 1993 Ford Ranger (PAID for)
My husband just recently fixed up the Ranger. It’s driveable, passed inspection, registered, insured and only leaking oil in 1 spot now. He planned on using it to get to work after we sold his Mustang.
Why sell the Mustang?
We are selling the Mustang to pay off our debt. When we sat down last year and decided to get out of debt once and for all we got a little crazy. We cut out things, reduced our spending, sold things and the Mustang will be the last final push that will get this debt gone. We owe $13,323 and we’ll probably get around that when we sell it. Poof! There goes $13k in debt.
By selling it we will see:
- $13,323 in debt disappear
- NO monthly payment
- lower insurance bill
- lower gas bill - This is HUGE. Currently gas is $3.04 here. In California it’s $3.32. Oil is at $100 a barrel and who knows how much higher gas prices will go. The Ford Ranger gets much better gas mileage than the Mustang GT with it’s V8 engine.
But why buy another truck? What’s wrong with ours?
We only had a few concerns about our Ranger, mainly that it needs a new bed. It’s driveable and has working taillights now, but it was rear-ended and totaled by a street-cleaning truck a couple years ago. The insurance company totaled it out because the cost to fix the truck was more than it’s worth. We wanted to keep the truck so they cut us a check minus the difference for the amount the truck would have gotten at auction ($500 or so). It’s sat in our garage since then and my husband just recently fixed it up. So there are some concerns, mainly that it will cost us at least $1,000 to fix the bed of the truck.
My sister-in-law’s truck is in great condition and with less issues than our Ranger. By buying hers we would have a more reliable vehicle for about the same amount of money we’d spend fixing up our current truck.
We bought it for $2,000. Cash.
It was our first time as a couple buying a car outright with cash and it felt SO good!
Now we’ll sell the Mustang and the 1993 Ranger. The F-150 will be the truck I drive (it seats 6) and the “new to us” Ranger will be my husband’s truck to get to work.
Have you ever bought a car with cash? Doesn’t it beat having a car payment?
7 Responses to “First Time Purchasing a Car with Cash”
Great blog! With so many people caught up in status, it’s refreshing to see someone putting substance over style. Too often people brag about their fancy cars and houses and so on, but I’d take being debt free and boring over “exciting” and wallowing in debt anyday. Best of luck!
By Dave on Jan 4, 2008
Good move. Vehicles depreciate so badly it’s much smarter (imho) to do what you did.
By mbhunter on Jan 4, 2008
Dh and I have not had a car payment in 6 years. Would I go back to leasing/buying a car with payments? Not on your life!
It is such a wonderful feeling to pay with cash, WTG! :).
By Heather (NKUWTJ) on Jan 5, 2008
Buying a car with cash is one of the most refreshing, enlightening, and liberating economic experiences you can go through I think. I do not miss making those monthly payments knowing that I was paying 15% more at the end. Yikes!
I guess I technically didn’t buy cash, but I paid it off on the first payment. The reason for this? I was able to negotiate a great price by luring the dealership with funding the loan.
By Oscar on Jan 6, 2008
I can imagine it’s a great feeling to pay cash for a vehicle. That’s what I plan on doing the next time I need to buy a car. Right now though, both of ours are paid off and I don’t ever want to make payments again.
By Fiscal Musings on Jan 6, 2008
It really is a great feeling to have no car payment. Our past three cars have been bought with cash and they have served us well!! We hardly know what a car payment would be like except for what others tell us. They want new cars but the payments are killing them. Some friends of ours that have trading in cars each year for the past 3 or 4 years just refinanced their debt with a second mortgage. Yikes!
Congratulations on being able to buy that new truck with cash and the plan to get out of a large chunk of debt!
Hapy New Year!!
By Maria on Jan 7, 2008