Is it better to buy a used car with cash or finance a new one? For me the answer has always been cash — and here is why it is one of the best money habits I have.
A car is one of the fastest ways to quietly lose money. Payments, insurance, depreciation — it adds up. That is why I have never had a car loan. Every car I have owned was older, simple, and bought with cash.
Reliable beats impressive
I do not care what a car says about me. I care that it starts every morning and is cheap to fix. Simple, proven models with common parts are easy to repair, and I do most of the maintenance myself.
A fixed fuel budget
I set a fixed monthly budget just for fuel and stick to it. When it is gone, I plan my trips better. That one rule keeps a large variable cost under control.
The real cost of a car payment
A monthly car payment is money that could be invested for decades. Skipping it is not about being cheap. It is about choosing long-term freedom over short-term status.
- Buy what you can pay in cash.
- Choose models that are easy and cheap to repair.
- Give fuel its own fixed budget.
Run the numbers on what a car payment could become if invested with the compound growth calculator.
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