{"id":456,"date":"2018-03-25T21:33:40","date_gmt":"2018-03-26T04:33:40","guid":{"rendered":"https:\/\/www.thefundfamily.com\/?p=456"},"modified":"2018-07-16T20:19:52","modified_gmt":"2018-07-17T03:19:52","slug":"buying-a-car-cash-vs-credit","status":"publish","type":"post","link":"https:\/\/trevorrumsey.com\/thefundfamily\/buying-a-car-cash-vs-credit\/","title":{"rendered":"Buying a Car Cash vs. Credit"},"content":{"rendered":"

Buying a Car Cash vs. Credit<\/span><\/h1>\n

Buying a car is a big purchase. There should be a lot that goes into what you want in a car, including price. Tara and I have bought 4 cars in the 4 years we\u2019ve been married and would like to share our experiences of when we bought our cars with cash vs. when we bought our cars on credit.<\/span><\/p>\n

Cars we bought on credit<\/h4>\n

While we were dating, I bought my first car on credit, a Mazda 6. This was the worst experience I\u2019ve had buying a car, mainly due to the crappy salesman I had to deal with. I didn\u2019t have any experience buying a car and so the salesman took advantage of that, promising me a certain payment, only to call me back the day after I had the car needing more money down and a different payment amount. The loan I had taken out was around $7,000 so my payment was relatively small ($120), but I didn\u2019t realize how much that small payment would hinder my wealth building in the long-term.<\/span><\/p>\n

\"mazdacrash\"
Right after our crash<\/figcaption><\/figure>\n

<\/h4>\n

About a year later, we got in a wreck and realized that we barely had any equity in the car. The insurance paid off the loan, but we were left with only $1,000 to buy another car. We felt we didn\u2019t have other options so we decided to get another car on credit. This car was cheaper ($4,000) and the payment was only $100 a month. This car seemed to be a really great deal at the time, but it ended up having quite a few problems. The A\/C died on us and the brake pads quickly went out. We also had some suspension issues that would have cost us around $1,000 (had we fixed it).<\/span><\/p>\n

\"volvored\"
Our second car<\/figcaption><\/figure>\n

Car we bought in cash<\/h4>\n

Shortly after we bought this car, we realized that we would need another car (Tara and I both worked at the time). We knew we didn\u2019t want to buy a car with credit this time and decided to find a car to buy with cash. We found an old Honda that was listed for $1,500.The seller was a private seller close to where we lived. He wasn\u2019t trying to up-sell us on anything and was willing to work with us having only $1,200 cash. We bought this car pain free and drove it for another year before selling it and moving to Texas. <\/span><\/p>\n

Not everyone\u2019s experience with buying a car on credit is necessarily bad. I think our experiences are especially bad looking back on how it has hurt our financial growth. We were really good at paying extra on our cars and getting out of debt, but if we could have put that extra money towards investing, we would have had around $15k+*. <\/span><\/p>\n

In our society it is \u201cnormal\u201d to have a car payment. We have decided that we don\u2019t want to be \u201cnormal\u201d anymore. Our next car purchase will be with cash. And the next. And the next. And the next. You get the point. It takes time and dedication to save and pay cash for a car. We currently drive a paid for SUV that we love. I think because we own it and don\u2019t have payments on it, we appreciate it even more. It\u2019s no longer a burden, but a blessing.<\/span><\/p>\n

The difference<\/h4>\n

The biggest difference for us buying cash compared to on credit, wasn\u2019t the actual buying experience. It was after we had bought the cars. Our first car left us with few options after we had gotten in a crash. The second car had issues that we had to fix on top of making payments. Most of all, we slowed down our path to wealth<\/a>. <\/span><\/p>\n

Not having payments has helped us to grow our net worth<\/a> substantially. We are able to take trips like the one we are going to in May<\/a>. But most importantly, we don\u2019t have the stress that car payments bring. <\/span><\/p>\n

What experiences do you guys have with buying a car? Did it feel different buying cash over on credit? Does it help bring you peace of mind?<\/span><\/p>\n

 <\/p>\n

*This is based off of us making double the payments at $240\/month over 4 years with 11% returns. Dave’s Calculator<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Buying a Car Cash vs. Credit Buying a car is a big purchase. There should be a lot that goes into what you want in a car, including price. Tara …<\/p>\n","protected":false},"author":1,"featured_media":464,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[4,48,3,2],"tags":[30,29,12],"class_list":["post-456","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-becoming-wealthy","category-finance","category-getting-out-of-debt","category-rumsey","tag-avoiding-debt","tag-cars","tag-principles"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/trevorrumsey.com\/thefundfamily\/wp-content\/uploads\/2018\/03\/automobiles-automotives-black-and-white-70912.jpg?fit=5381%2C3363&ssl=1","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p9yM2e-7m","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/trevorrumsey.com\/thefundfamily\/wp-json\/wp\/v2\/posts\/456","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/trevorrumsey.com\/thefundfamily\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/trevorrumsey.com\/thefundfamily\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/trevorrumsey.com\/thefundfamily\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/trevorrumsey.com\/thefundfamily\/wp-json\/wp\/v2\/comments?post=456"}],"version-history":[{"count":6,"href":"https:\/\/trevorrumsey.com\/thefundfamily\/wp-json\/wp\/v2\/posts\/456\/revisions"}],"predecessor-version":[{"id":891,"href":"https:\/\/trevorrumsey.com\/thefundfamily\/wp-json\/wp\/v2\/posts\/456\/revisions\/891"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/trevorrumsey.com\/thefundfamily\/wp-json\/wp\/v2\/media\/464"}],"wp:attachment":[{"href":"https:\/\/trevorrumsey.com\/thefundfamily\/wp-json\/wp\/v2\/media?parent=456"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trevorrumsey.com\/thefundfamily\/wp-json\/wp\/v2\/categories?post=456"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trevorrumsey.com\/thefundfamily\/wp-json\/wp\/v2\/tags?post=456"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}