Me! I drove the hand me down Corolla from my parents for twelve years until I saved enough to buy a new car without any loan. Then I drove that car twenty years. Third car also was debt free but I kept it only seven years due to too many electrical and mechanical issues. Traded that third car for the current fourth car, again with no loan, no debt.
I don’t know if I’ll be able to do so again if I ever need another car but hopefully won’t need face that issue yet for many years more.
A friend and I were talking about this very subject earlier today. We know someone who when buying a vehicle never factors in the cost of sales tax, licensing and registration, higher insurance premiums and annual personal property tax on a newer vehicle so always spends over budget. At least twice I know of the guy has traded in a perfectly good pick-up truck of only three to four years age and low miles, rolling over the car loan for longer years and higher monthly payments, because he never puts aside money for new tires, brakes, and general maintenance.
Wow… I commend you guys @db4690 and @Marnet I thought for sure those sharing the “no note” syndrome would be few and far between. Maybe there are more of us out there yet to chime in.
Today people dont seem to fear credit and getting into deep debt in any way, almost as if it isn’t real or as if you dont have to pay it back… let alone pay it back plus interest…which usually gets entirely out of control in most cases I have been exposed to in the past. I guess Im just wired or been raised differently, I dont know.
Now dont get me wrong, I have seen people use credit wisely and benefit from it so it seems. I just dont have the mentality for getting into debt…or I should say getting OUT of debt cleanly or properly. Maybe one day I will learn to do the Debt Dance like others can, I’m definitely not there yet.
The only thing I’m currently making payments on are the house(s)
In the past, I once made payments on a snap on tool box. But I paid far more than the minimum. In one year’s time, it was mine free and clear. It’s been a good box, and I have no plans to upgrade. But I have added a side cabinet and might go for a top box some day. I plan on using the box until the day I retire
I only have 2 credit cards, and I pay off the full amount each month.
You were raised the right way, I would say
Both of my parents never carried a car note. They always bought cars outright. I suppose I learned something from them . . .
I figure credit is sort of a tool. And as with all tools, you either use it correctly, or you don’t touch it . . .
My parents grew up in the Great Depression and were young adults during WWII years. Both learned about living within their means and taught that to my brothers and me.
Only once did my parents have a car loan. In 1965 they were certain the U.S. involvement in the Vietnam war was increasing such they thought it possible that new car production and parts production for existing cars might be cut off or at least highly restricted like had occurred in WWII. So they bought a new car, financing about half the cost. They could have bought it outright but didn’t want to ding savings that much. As it was, they paid off that loan early. Soon as they had that new car, Dad sold the old beater he used for work. Then he had Mom’s nine year old car completely overhauled; engine, suspension, brakes, belts and hoses, new seat covers, new paint, new tires. They figured that with one new car and one fully overhauled nine year old car they could keep driving through the Vietnam war if cars and parts for cars became scarce…as long as gas to run them was available.
Long story, bought a Dell chromebook from cdw outlet, $85, 1 year in charging issues, 3 year warranty. So a guy came by day before yesterday replaced the motherboard and all is good. How great is that? Now compare that to the horror stories we have seen for warranty repairs on cars. No code can’t fix is the one that grinds my gears.
Me 4. Never a car loan. My first borrowing experience was a small money personal loan to establish credit because I had been paying cash up to that point. After that, got first credit card and have never paid interest on them since. Only loans since have been for homes and I pay those down within 10 years. I don’t like outstanding debt or paying interest…
Me. No car loans. No college loans, paid cash. I have had only one real estate loan on my first house (which I still own). I put 25% down on a 30 year bi-weekly loan which would have knocked it down to about 22 years, but I paid it off in 8 years when the big bank in Chicago tried to tell me I needed to increase my flood insurance coverage (home is on a lake shore). I had words with them first, demanded an apology and paid them off with a check. I did receive an apology and never had a loan again.
I am not a wealthy man (monetarily). I live well below my means, which is key. I always have. I am a saver and I’m very thrifty. I’ve bought new cars, cash, but they honestly don’t do anything for me a nice used car does, so now I seem to buy only used and not very often.
If a need a car or real estate I pay cash from savings. The condo I’m sitting in was a cash purchase. I shopped online for a condo from 1500 miles away for 2 months. We immediately drove down in my 20 year-old Caravan (once I got a door to open after it sat out in freezing rain) when this one hit the market (They sell very quickly. One must act fast! In fact it sold before we arrived, but fell through.). It was turn-key furnished and vacant and we were paying big money for motels while here (premium prices because of the coastal location), so my cash offer, once accepted, closed the sale faster than my agent had ever closed a sale before and we moved right into it. Money talks. I am continuing to save for cars and another condo. We will eventually sell our house and go down to one residence, so the house is “savings’” too. We like it here much more.
What’s the difference between making payments on a loan or making payments to savings and paying cash? I gave one example above. One is playing catch-up and the other is proactive thinking and staying ahead. One gives much greater satisfaction because for me people who are making payments don’t own what they are paying for, but only imagine that they “own” it. One you can do with as you please and the other you can do as the loan company pleases. Freedom feels great. CSA
Yes. I prefer to buy old cars for less than $3000. I have only owned one new car in my life, the 2004 Toyota Corolla which my wife now drives. I bought that after my 1991 Tercel was destroyed in an accident. I was planning to buy a used Dodge Spirit or Shadow, but my dad talked me into buying the new car, and also paid about $6000 toward it since I only had about $10k. I can honestly say it’s the best car I have ever owned, because 16 years later I still have it, and it still runs great.
The first and last time I had a “car note” was in 1965 for a new loaded Dodge Dart GT. It was for $3000 since I had just graduated and had almost no down payment. The car served me well for 13 years and 154,000 miles when it succumbed to rust and had to be scrapped!
Hardly see any of those on the road anymore . . . but one of the guys in our fleet has a Dodge Spirit. It’s pretty rusty, so I’m guessing it wasn’t originally a southern California car
I had one car note in my entire life and regretted it. It was on a 77 RS Camaro back in 79. Put it up for sale and thankfully got enough out of it to pay the note off and walk away with a few grand.
Other than that I’ve generally bought used and well checked over cars which have always served me well.
Being a mechanic one does run into opportunities now and then to buy a nice car cheap with said car having a major problem which is not a big deal for a mechanic.
Regarding the Dodge Spirit there’s a guy around here who runs one at the drag strip. He was turning mid 12s with it and after tinkering he had it down to near 12 flat. We left early and he had just run an 11.90.
Pretty fast for a pile of crap. He said he couldn’t even drive it on the streets anymore as the street tires would just go up in smoke when he took his foot off the brake.
New cars are too expensive to take a chance driving them in todays maniacle traffic. Also don’t forget property taxes if you live in an area that has them. Last car I bought new was my 2003 Dodge Caravan (still runs like new). About 3 weeks after I bought it I got a property tax bill for it for $800.
Back when men were being drafted for the Vietnam war, I had a student that was failing the math course I was teaching. When he came in for help, he told me he had a night job to pay for his car, which I think was a 1968 Dodge Charger. He commuted about 12 miles from his home. At the time, my brother was commuting to his job 50 miles away in a used Buick and had no trouble getting back and forth to work. I calculated for the student what it would cost to move into the dormitory and give up the car and job. The depreciation on the car would more than pay for his room and board. He was having none of that. He was not going to give up that car. He flunked out of the university, was drafted, and had to sell the car anyway.
I had a female student who was a computer science major and a music minor and a horn player. I got her into the orchestra where I was playing when we needed an extra horn. She took a night job as a computer operator in a local factory and was also a full time student. She was doing poorly in a statistics course taught by one of my colleagues. She came to me for help. I worked with her for a couple of hours. She came to me after the term was over and had done well enough on the final exam to earn a C in the course. I told her that she was lucky, but she was just getting a surface knowledge in her classes and she should quit her job and concentrate on her studies. She then told me she had car payments to make on a new car she had purchased, had rent payments on an expensive apartment where she lived, and owed money on furnishings for her apartment. I told her that she would probably be a computer operator for the rest of her career and her surface knowledge would keep her from advancing. I told her that she was a slave to her possessions. She got angry and got up to leave. I then said “The person went away sorrowful because she has a great many possessions”. She left and slammed the door to my office so hard that it almost broke the glass. I figured I would never see her again. Three months later, she showed up at my office. “You really made me mad”, she said. “However, one night at work I thought about what you said. You were right. I sold the car, moved out of the apartment, and have a part time job on campus. I rented a room in a house just off campus. I now ride a bicycle”. She did graduate and got a professional position. Don’t be a slave to your possessions. After a couple of years, a new car looks like a used cornflake.
I learned a valuable lesson when I was in 7th grade. I was interested in shortwave radio. My parents had given me an old console radio that had two shortwave bands and tuned to 24 MHz. I had worked with the set and even hooked another tuning capacitor in parallel with the main tuning capacitor to tune in stations more closely. However, I thought I had to have a “real” shortwave receiver. I saved my pennies and managed to buy a used Hallicrafters S-38A. After a week, I realized it wasn’t receiving the stations I could pull in on the old console radio. I thought the problem might be a weak vacuum tube. When I opened up the S-38A, I found it had the same tube lineup of a cheap kitchen radio. All that had been added was coils for shortwave. I was really upset, but I learned to really think through any purchase. It was a valuable lesson. A year later I was able to trade the radio and some cash for a higher level Hallicrafters short wave receiver.
There seems to be a tendency towards being practical and frugal among a significant number of regulars and I’m curious as to how those of us who are cheap compare to those who are freer with their spending and how the dispersal here compares to the US as a whole.
Well I guess I’m the kid from the other side of town. I make no apology for having borrowed money and paid it back in the furtherance of my standard of living. I’m not in favor of or afraid of debt. It is only a tool, necessary sometimes, like a socket set.
From about the age of ten I knew if I was going to college, I would have to do it on my own. There was no college fund or trust fund or rich uncles that would be helping. Simple math said that the 60’s $10,000 cost divided by 85 cents an hour would have made me 30 years old before saving enough money to pay for it. Of course with the draft, I would have been in Viet Nam and maybe wouldn’t have had to worry about it. So I worked and saved and paid for 70% but had to borrow the rest. Same with the wife so it was a double whammy paying it back. Most of my cousins just took jobs out of high school or enlisted and never did get a degree. I bought my first new car when I was 26 and yeah, financed it. Bought a new house in 76 and financed it for 25 years with 25% down. I always dumped a lot of money into the 401K type and savings bonds to pay for the kids under graduate so he wouldn’t have to borrow. So when I retired I had access to my money. I always did a lot of work on my own cars and house to save money.
I actually always felt privileged because I had good parents and my dad had contacts that got me into good summer jobs, but no one ever had a lot of money and we always needed to finance major expenses. I held off on air conditioning until my in-laws were going to visit and it was 90 degrees out, so I financed it. No regrets, no apologies, you just do what you have to do at the time. I wouldn’t trade the memories of any of our trips to Disney or DC or Yellowstone or Europe along the way or what I had to do to get there. It all paid off in the end. My advice to young folks still is to avoid credit cards like the plague, but don’t be afraid to invest in your standard of living and future.
Just so folks reading this know that not everyone can or does pay cash for everything.
@Rod_Knox. You asked an interesting question. Many of us regulars on this board are older and some, like me and @Marnet, had parents that came through the depression.
I don’t think the regulars on this board are representative of the typical consumer. I was a faculty member in a university from 1965 until 2011. I watched new colleagues go into debt for an upscale house and a new car. I saw this change over the time period, from conservative spending toward purchasing many items.on credit. I was probably the last generation to have parents who went through the depression. I had younger colleagues in mathematics and computer science who only ask what their monthly payments will be when negotiating for a new car. These colleagues could easily calculate what the financing costs,.but apparently they don’t care.
I didn’t grow up with credit cards. Even today, about the only time I use a credit card is for putting gas in the car or buying something on line that I can’t obtain locally.
I think Consumer Reports tests what appeals to their subscribers who want upscale merchandise. I think back to a 1952 issue where CR compared the low end Chevrolet Standard with the Ford Mainline, or the.bottom line Dodge Wayfarer with the low end Pontiac 6. Today, they test BMWs and Mercedes Benz models. The never test $125 dollar push lawnmower. The push lawnmowers they test start at $250. I keep my subscription because I like to see what “rich” people buy.
Many of us regulars on this board understand how an automobile works and are either professional mechanics or have maintained or repaired their cars. We tend to keep our cars longer. I think we are more practical.
I agree there is a bit of a disconnect between some of us and the regular consumer, It can be very difficult to separate my opinion as a mechanic on a problem compared to the consumer’s view of it who may know zero about mechanical things. What appears to be car life ending for them comes across as comparatively minor to me and probably others also.
I agree many of us are different than many of the consumers today. A couple of days ago a guy replaced the motherboard in my computer under warranty. He was a part time employee and also drove for uber eats. I have a friend that drives for shipt or whatever the name. I think we underestimate the earning capacity of many as they can afford $5 coffee, somebody to pick up and deliver their food order and pay someone to do their shopping. Financially I could do that too, psychologically I cannot. Perhaps I could rationalize part of the cost in gas and car mileage savings, the world is changing faster than me I guess.
