It’s Not a Myth, It’s a Lie; You Don’t Need a Car Payment

Car Payment or No Car Payment? That is the Question

Have you ever wondered what it would be like to own and drive a nice car without payments? Wonder no more. It’s AWESOME!

Imagine driving down the road care-free, except for the road in front of you of course, without having to spend the next 3-6 years paying for it. It’s yours. You own it. And the best part is, you didn’t have to pay any interest AT ALL to get it. These days, people see a paid for car as a discount, not as a smart financial decision. No payments. No interest. No bondage. Just you and your paid for car.

Ahhh, the good life!

Unfortunately, too many people will spend the rest of their life paying car payments year after year after year. The myth goes like this. You can’t own a nice, reliable, and safe car without going into debt to get it. What a lie that is, and one that can cost you dearly. It’s not a myth, it’s a lie!

“Car payments are YUCKY!”Trish Kolsto (EOD Reader)

Get Ready, Here It Comes

I hate to say this, but if you are one of those people who walk around talking about how impossible it is, you’re either in denial, or unwilling to make the necessary choices to make it happen. It is not only possible, it’s the smartest way to own a vehicle. It simply takes a little sacrifice, patience, and determination to make it work.

I really enjoy challenging you, so I want you to *seriously* ask yourself this question.

What are you losing, and what are you gaining, by having that car payment?

You’re missing out on unlimited opportunities. It could be the opportunity to work less, save more, or most importantly, it’s a great opportunity to pay off your debt. The only thing you’re gaining, besides the car, is the opportunity to pay more for something that could be bought for less. You are giving up more of your hard earned money for the very same “possession” you could have without making someone else wealthy. Since when did it become smart to pay more for something than it’s worth?

Does that really make sense?

What about retirement? What about health care? What about life insurance? What about your kid’s college? How about being able to pay off your mortgage early and the opportunity to build wealth? How much of that money could go to help others less fortunate than yourself?

You could live a quality, happy, stress-free life, with everything you want which includes financial security, and still help family, friends, and even total strangers with day to day struggles. You could make a bigger difference in your own life as well as others, but your car payment is hindering any possibility to do so.

Instead, we coast through life wasting money, making bad financial decisions, and then we say things like, “the Government should provide this and the Government should provide that”. I’m sorry but that really bothers me. You have a chance to have everything you want, yet fail to see where you could make better decisions to get those things and so much more. Compound interest anyone?

Anyone?

I want to add that my opinion isn’t meant to belittle, degrade, or put you down, it’s simply my opinion. It IS meant to make you think about what you’re giving up by believing that you can not own a car without a payment. Have you tried? Are you willing to test the waters before declaring it impossible? Everything above used to describe how I managed money. I’ve been really dumb with my money for most of my adult life.

It wasn’t until I became aware of my own stupidity, that I realized just how wrong (and even selfish), I was being. Here we have a government that cannot even balance its checkbook, is 14 TRILLION dollars in debt, and we’re essentially saying, “GIVE ME, GIVE ME, GIVE ME, I DESERVE IT!”

No you don’t.

I’m sorry, but in the land of opportunity, the only thing keeping you from having anything you want is YOU. Sure, some people need a leg up, but what I see is a society content with making poor financial decisions and then looking to the government to supplement those decisions. Do you really want to rely on Washington to give you the important things in life? Just answer this question:

Could you do more for yourself if you weren’t loaded with debt? Yes or no?

What are YOU going to do to make your life better? Instead of asking, “When will I get…”, ask yourself, “How can I get…”, and you could start by eliminating your car payment and go from there.ย  Save more money. Pay off more debt. Throw more into retirement. Make sure you have everything you need to live the life you want.

You are YOUR responsibility, and that’s the bottom line. If you want to become financially secure you will. If not, well, you won’t. I hope you take advantage of the opportunities available to you because I know for a fact, and from experience, that it will change your life.

DISCLAIMER: I am in no way, shape, or form, saying that just because you have a car payment, you expect the Government to provide for you. Some people do, and those are the people I am talking to with that point. Everyone else, I still say you’re wasting your hard earned money on financing an asset that depreciates. Am I wrong? Make your case in the comments below. ๐Ÿ˜€

Our Story

In 2008, we sold our car payment so we could get out of debt. Not only did it help us get out of debt, but it helped us save for the important things in life. This year we saved $6,200 and bought the vehicle pictured above. It wasn’t as fun as going on vacation, or blowing it on new electronics, but it was necessary to enable us to do more with what we have.

We have upgraded since selling the car payment, and each time have bought a newer, more reliable mode of transportation. As you know, we’re having a another child in August, and we needed something bigger. We could have said life’s not fair, we just can’t afford a nicer, roomier car, but we didn’t. We made a goal, saved up for it, and now we’re better off financially for doing so. You can do the same exact thing. We’re NOT special!

I started with a $500 Honda CRX and upgraded to a 1999 Saturn. My wife started with a paid for $3,000 1993 Volvo 940 and now has a 2002 Mazda MPV. Now we have two nice paid for cars that are reliable without any debt needed to acquire them.

Again, I want to emphasize, that I say all of this out of love. If I didn’t care about each and every one of you who read this right now, I wouldn’t even bother keeping Enemy of Debt alive. On the contrary, I do care, and it’s why I have decided to be so candid with you about this. Feeding into the myth that society has taught all of us, will do nothing to make you think about making changes. Giving it to you straight, while it might ruffle a few feathers, ultimately, it’s my way of saying that you deserve better.

All I’m saying is this. If you believe you have to finance a car to have a nice one, I hope this article at least triggers something inside you that makes you question the way of thinking. Challenge yourself to think outside the box, because it will save you some serious dollars. Car payment or no car payment, I love you all, but I had to try and show you the light. This is where Behavior Meets Reality, remember? ๐Ÿ˜€


About Brad Chaffee

33 Responses to “It’s Not a Myth, It’s a Lie; You Don’t Need a Car Payment”

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  1. Sara says:

    One more payment- our last car payment EVER!- and we will own both of our cars!! Can’t wait. It is SO sad that we are taught that having a payment is the only way to own a nice car. “I can afford the payments!!” What a joke!
    Thanks for helping others see this lie!! ๐Ÿ™‚

    • Brad Chaffee says:

      Woo hoo Sara! Congratulations! You are going to love car debt freedom! Just think about all the other things you can do with that car payment. What a joke indeed! People always talk about how they have a mind of their own and can think for themselves, but society’s actions seem to suggest something quite different. Keep rocking it Sara!!

  2. Marty says:

    Amen brother! 2004 Ford 500 and 2005 Dodge Durango. No car payments for last 6 years. It can be done.

    • Brad Chaffee says:

      It CAN BE done if you want to provide for and care enough about your future security. Otherwise, it’s TOTALLY impossible. LOL ๐Ÿ˜€

      Great job Marty! Paid for cars are the BEST!

  3. Peter says:

    We’ve currently got two paid off cars – a 2002 Honda Civic that should last another 10 years, and a 2006 Chevrolet Impala. Both were paid for with cash! Paid off cars just have a way of driving better. ๐Ÿ™‚

    • Brad Chaffee says:

      Definitely Peter! imagine way back when, when you had a car payment AND had to fix your car because you had no emergency fund. Making a $300 car payment and paying $500 for a car repair in the same month really hurts. Glad I have see the light and not only have an emergency fund but have a paid for car as well. (I can definitely think back to those days and know this way is much better) ๐Ÿ˜€

  4. Cynthia Gottfredson says:

    Hey Brad:

    Yes owning your a car is great. . No payments, and no reminders!!!!! I own a 2004 Toytoa Camery. I do want to challange the Toyota ads in which the engine lasts over 400,000 miles before purchasing a new car. The other two cars only lasts 190,000 then I had major repairs…..

    Your are right (No Car Payments) is the right thing to do……

    • Brad Chaffee says:

      Absolutely Cynthia! I used to argue the other side before I realized that I was the reason I couldn’t have a car without a payment, not that it was actually impossible. ๐Ÿ™‚

      I have also seen people begrudge those that don’t have payments as lucky individuals because they “had it handed to them on a silver platter”. It has more to do with making better decisions and not giving into the poor mindset that makes you believe that is what you will always have. It takes work, planning, and rarely is just handed to them. People with paid for cars think differently and work hard to make their goal a reality.

      There are a lot of circumstances that determine whether a car will drive 100,00, 200,000, or even 400,000 miles. Most of the time it does take some major repairs to keep the car running optimal but it can be done. For instance I know Volvo’s are well known to last more than 200,000 easily, but other cars konk out around 100,000. I guess it really depends on how the car was cared for and by how many different people.

  5. Trish Kolsto says:

    Great article. We have one paid off car (2004 Lincoln Navi) and are working on paying off my hubby’s truck. Car payments are yucky.

    • Brad Chaffee says:

      Great job on the paid off Lincoln Nav!! That’s a great car! I love your line “Car Payments are Yucky!” I may have to create a bumper sticker or magnet that says that!! ๐Ÿ˜€

      For now check out the first section above. I quoted you in the article! ๐Ÿ˜‰

  6. Money Momma says:

    I agree 150% and that is why I have changed my paid off order. Before I was going to pay off the CC but then I thought to myself “Why not dump this extra money into the car, the one with the highest amount to pay each month”. The was going to be paid off pretty soon but I wanted to speed it up so I will have more money towards my snow ball amount and drive around in a paid off car. I’m so excited for that day….I CAN’T WAIT!!!!!! SOON, VERY SOON!!!!!

  7. calshana says:

    I haven’t had a car payment for years. My car had been slowly dying over the last few years so I started saving money for a new one. When it was time to finally get a new one, I went in with cash and actually was able to negotiate a ridiculously good deal and buy a new car. So now I have a new car and no payment.

    • Brad Chaffee says:

      All right Calshana!! Way to go!! Cash money is the coupon of all coupons! When you take the time to plan and execute that plan, the reward is great! Congratulations on your paid for car and getting a great deal on it! There’s no such thing as “I CAN’T!” ๐Ÿ˜€

  8. Nicky says:

    Brad I CANNOT WAIT for the day when I sign that last check. FREE AT LAST I WILL BE SINGING. Funny when I got to work this morning and took out my checkbook and started writing the check then I clicked on your website as I do every morning and saw your post I just smile. I was naive and uneducated when I took out this loan. I’m smarter, wiser and no longer naive. I plan to pay off this pesky, irritating loan soon and very very soon. December 2012 is my deadline. ALL tax return will be going to this loan. I WANT IT GONE WITH A PASSION.

    • Brad Chaffee says:

      That’s what I like to hear Nicky! Get it out of your life, and the sooner the better! Almost everyone can say they were uneducated and naive about money, but thankfully some of us at least, are turning away from the dark side and walking towards the light. ๐Ÿ™‚

  9. Vicki says:

    That is my dream to not have my icky car payment. I am one of the suckers that rolled in my negative equity into a new car loan. I bought into the lie that I have to have a new car, where as I could have hung on to the old one for two more years, paid it off and then saved for a newer model. Every little penny I can sock towards makes me feel better.

  10. We are saving now to pay off our last bit of non mortgage debt… a car payment. Should have it paid off by the end of summer… and then DEBT FREE!! wohoo! I have a plan to never have another car payment again… ever. We shouldn’t have to buy another car for 4 or 5 years so we have plenty of time to save up.

    • Brad Chaffee says:

      The debt freedom song is music to my ears!! Love it!! At the end of the summer I’m hoping you’ll head over to Enemy of Debt and answer my debt free questionnaire. It’s been a while since I’ve had anyone submit a debt free story so I need to get that ball rolling again!! Good luck and keep rocking it! Bye bye car payments forever! Woohoo! ๐Ÿ™‚

  11. Tabitha says:

    I just plopped down $8000 to pay off my car. No more car payments!!!! Driving a 2004 Nissan hoping it will last awhile. I am already saving for my next car as I have a son who’s almost 12. I love being debt free!!!!

    • Brad Chaffee says:

      GREAT JOB Tabitha!! That is so awesome! WTG!!

      With our kids, we plan to use the same system Dave Ramsey used with his kids — the 401Dave. His kids saved as much as they could and he matched it when the time came. we’re going to match up to $10,000 (max) for our kids when that time comes to encourage them to save and earn their first car. I think it’s a great way to teach them about hard work.

      Again, great job! Keep up the awesome work you are doing! ๐Ÿ˜€

  12. Couldnt agree more brother….car payments (along with homes people cant afford ๐Ÿ˜‰ ) are the number one wealth killer in this country. I havent had a car payment in 3 years and will never have one again. Next is the house, Lord willing that one will be licked in a few months…..
    Thanks for sharing

  13. Great job! Not having car payments really does make a difference. My deductibles are $2,000 for my auto insurance and that translates to a huge savings in insurance coverage cost.

    If you finance lenders won’t allow higher deductibles. I’ve also been able to save tons of money over the years. I just recently purchase my youngest daughter a 2008 Hyundai Tiburon and it really felt good to pay $13K cash for the vehicle…in and out!

    I’ve done this for all of my kids when they turned 18 years old and I wouldn’t have been able to do that if I had monthly payments going out to everyone else.

    One of my potential clients recently said to me that “if I do nothing about my debt now what do I have to lose?” I thought for a second and I told him you do have a lot to lose such as: time freedom, less stress, security for your family, a clearer mindset, more time for your family, more time to read books, more time to exercise and those were just a few that didn’t focus on money but money management (no payments or low monthly payments) will make it possible.

    In 1995 I got rid of my expensive CAR’S that I was making payments on and bought a $800 Suburu. I drove that car until I could pay cash for a better car. It only took a year. I think most people worry about how they will look to family and friends over what they will end up driving.

  14. Michal says:

    Very motivating! Thanks for the great article, it’s just what I needed to get over my car fever!

    • Brad Chaffee says:

      Car fever will get you every time! Best advice to follow when buying a car is to pay cash and remove any emotional attachment to any vehicle you’re interested in. Good luck!

  15. Money Momma says:

    I DID IT!!!! Today I mailed off the last car payment. We had $1000 saved for a trip but then I started thinking that the money should go toward the car payment….we had the money but REALLY couldn’t really afford to go. I finally spoke to my husband about it and decided to pay off the debt and then save for the vacation. I am soooo happy that we did. Next up THE PERSONAL LOAN. I expect to be done with that by September by the latest and then the card is next……this is such a great feeling. I LOVE IT!!!!!

    • Brad Chaffee says:

      Wooo hooo! What an exciting announcement Money Momma!! Rockin the debt freedom lifestyle and before you know it you’ll be completely debt free! I am SO VERY PROUD of you and extremely happy for you and your family! ๐Ÿ˜€

      P.S. Expect those questions some time tonight okay? ๐Ÿ™‚

  16. Pete says:

    Cool blog post, I just wanted to share my story. I was paying $540 a month for the most beautiful black Dodge Challenger R/T and after 2 years I realized that it just wasn’t worth the payment. I sold the car on ebay and purchased a 2000 Dodge Dakota truck with 74k miles for $4000. My insurance rates were cut in half and of course I have no monthly payments.

    It hasn’t been a total fairy tale however. The brakes on the truck went out on me while I was driving, so I couldn’t stop! Quite an interesting experience, as was the $300 repair bill. There were other issues as well. In the 6 months I have owned the truck, I have spent probably $600 in maintenance.

    So as a caveat, I would argue that even without a monthly payment, there is always a monthly cost to owning a vehicle. Be it maintenane, or the monthly savings people set aside to save up for their next car–either way you are paying a monthly payment. I guess the difference is you are paying it to yourself at 0% interest vs a finance company at 7% ๐Ÿ™‚

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