What is your monthly payment? Please read.

Do you have 1000 emergency cash in the bank? Do you have 3-6 months of funds available if you encounter something serious such as losing your job, injury, etc., listen to Dave Ramsey financial expert..don't buy more than you can afford, trust me I have learned from my mistakes and listen to the experience of others.

 

This is true, however that "payment" is 100% principal (and actually how I do it) and there is no financial backlash if something comes up and you "miss" a payment

While this type of perpetual car payment is a good thing, few will pursue it because of the "gotta have it now" culture.

The one problem I've encountered doing this, is that when I'm ready to buy a vehicle I have a difficult time making myself let go of that huge chunk of $$$.

My co-workers drive Panzerwagens (BMW, Audi, Mercedes, etc..) while my DD is a 10 year old Subaru.

But I am debt free

 

Congratulations -- I doubt many here could say the same!

 

It's also a lot easier to send someone you care about in an old car in Georgia. Where I live we just went though 5 straight weeks of below O f daytime highs with nights touching double digit lows regularly. Newer vehicles are not a bad idea here. Unless you want to be the guy found dead in an early 2000's car, which happens a few times a year. I've never bought my wife a luxury brand though. Something with AWD, snow tires, and a good reputation is all we need. Within 2 years old there isn't much point here in buying used with incentives, and over 3 years old I really don't trust what the previous driver has done to it.

That all being said I plan on running my personal truck right into the grave.

I have debt, and I service it well. I have a 5 digit savings account plus untouched but open borrowing lines. I also own more than 50% equity in my home at age 30. Bottom line, everyones situation is different. By no means though should "debt free" always be the end all be all measurement of someones financial intelligence.

 

And congrats to you as well!! I agree with you!

 

I know that feeling completely. Still though, consider that with equity and big ticket discounts my credit union is 1.3% on a $30k 48 month loan for 740+ credit score. Four year CD rates are 1.8%. Provided one has enough liquidity elsewhere to cover things if necessary, why wouldn't you finance? https://ratebrain.com/4-year-cd

 

The old Subaru is me.

The wife and kids are always in the newer vehicle (2012 Rav4 V6 AWD Limited) since the last thing I want to think about on a business trip is worrying about them in their vehicle.

Usually when I buy her a car, it's with an eye toward it becoming mine at about the 5-6 year mark, so I steer her toward something I wouldn't mind driving.

A V6 Rav4 is fun to drive.

 

My truck payment= $0.00

 

You guys have a lot of say in the wife's driving life haha. I get veto power for one thing, which is if I have significant reliability concerns. Aside from that I would get bitch slapped if I told her what she was going to be buying. Luckily for me she has very practical tastes, ended up with a rav4.

On the financial side I did tell her that we will be driving what we have until they either catastrophically break, or until the mortgage is paid off, whichever comes first.

 

Another plus to financing is it keeps REPO companies in business.

 

Wow! $650 for 72 months. That's hard to swallow for a car.

 

While perhaps splitting hairs, I'd say it's people overextending themselves that keeps REPO companies in business more so than financing itself.

 

Or they get laid off which happens a lot.

 

That would fall under "overextending themselves" in the sense of retaining insufficient cash/liquid reserves to handle a long layoff period. So would taking on so much loan that you're so underwater you can't "downsize" quickly if you need to.

 

That fits the bill for most people though. If you have cash to pay off a vehicle you should...most don't.

 

Unless you're making more on investing that cash somewhere else.

Example: my truck loan is 1.3% -- four year CD rates are 1.8 to 1.9%

 

My wife doesn't work, so I have a bit of sway...

 

That's so stupid.

 

Fixed that for ya. Gotta be careful there... Just try telling her she doesn't work and see what happens.

 

Do explain.