Did you catch Larry’s post on buying a car for $500? Many financial experts believe it’s our car payments that are driving us deeply into debt. Think about it– as soon as you drive your new set of wheels off the lot you are losing thousands of dollars. In an effort to save more money my husband and I decided to sell our nice, fairly new Mini Cooper. Our plan was to be a one car household until an offer came in that we hadn’t considered before: trading.
The man offered to pay us, plus give us his 1998 Audi A6 quattro. Brand new the car was probably about $40,000 but now it had 167,000 miles on it which meant the price dropped more than 90%. My husband and I have never had a car that was older than four years so this was a big change for us. But the more we thought about it the more we fell in love with the idea. Here’s why:
No car payment: After years of car payments and lease payments, the thought of having a car that we owned was a great feeling. We always thought we wouldn’t be happy with any type of car but a nice, new, reliable one, but we were wrong.
Cheaper insurance: Because our “new” car is older our insurance dropped quite a bit. This is another factor we will definitely keep in mind, especially if we end up having to put some money into the car for repairs.
Very little depreciation: It’s hard for a car to depreciate when it’s already dropped by more than 90%. We don’t have to worry about putting miles on the car or whether it gets a small scratch or door ding.
When we drive around in our “new” car, it’s hard not to be excited about all the money we’re saving. And Dave Ramsey is right, cars do seem to run a lot better when they’re not dragging around a car payment.