How To Never Have a Car Payment Again

by mike on December 9, 2011

No, it’s not a gimmick.  It’s not anything fancy.  It is definitely not complicated.  But it IS possible, for sure.  You may have fallen for the standard belief that the only way to purchase a car is with payments.  You don’t necessarily worry about how much a car costs, you worry more about how much per month.  Some basic math and a plan can break the cycle forever.

As an example, let’s assume we want a four year old Ford Explorer about three years from now.  We currently have a 2003 Ford Explorer.  I need to figure out how much to put back in savings per month to make it happen.

First, I take a look at Kelly Blue Book.  Based on what  a current 11 year old Explorer is worth (that is how old our 2003 one will be in 3 years), I can estimate we will be able to sell my Explorer for about $3,000.  Kelly Blue Book also tells me that currently a four year old Explorer will cost us around $14,000.

Therefore, simple math tells me that we are going to need to save $11,000 over the next three years.  Three years is 36 months.  Therefore, $11,000/36 months equals approximately $305 per month.

By putting away $305 for the next thirty six months, we will be able to buy a four year old Explorer after we sell ours.  You can do the same thing.  Just decide what you want your next vehicle to be, research the values ,and do the simple math.  Most importantly, make the commitment now to never have car payments again!

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  • Mike Young


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    i have never bought a car on credit, sadly that means i’ve always owned new but bottom of the range models.

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