Published On: Thu, Jan 5th, 2017

How We Pay Cash for Cars

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If you know anything about us, you know we hate debt so much that we’ve never had a car payment for the entirety of our marriage. We want you to know that you can pay cash for your cars, and we’re going to show you how to do it.

This whole thing started back when we were first getting married, and one of the things that we had to get rid of on our journey to debt freedom was my car at the time. I bought it all wrong. I bought it brand new in 2002. As we paid it off, we worked hard, grinded and paid it off in full. We made a decision to keep paying the car note, but instead of sending it to the loan company, we kept it for ourselves, and we put it in a savings account because we knew that one day we would want to get another car but we didn’t want another car note.

Over the years, the dollar amount of the car note payment that we paid to ourselves has changed. It’s a bit on the lower side now because our responsibilities have increased since we now have children, school tuition and other things to take care of. But we’re still able to afford to pay cash for any vehicle that we may need to purchase, and we have purchased two in our marriage.

At first, we kept the car note and it was about $500, but that was before children and all of our other responsibilities. So instead of sending it to a finance company, we kept putting it in our own savings account.
When it came time to get another car, we looked at how much was in the account and we based our shopping strictly on that amount. All of our research was conducted right online. Every dealership and their inventory is available directly on their website. That’s what we did, and we paid for that first vehicle with cash. The key was sticking to our budget, and it’s not like it was an exorbitant amount of money that we had, but it was enough to get a quality used vehicle.


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With the way the world has changed, you are no longer confined to only shop for cars by visiting a bunch of dealerships. Nowadays, you can find great deals on Craigslist for cars that people are trying to sell themselves and, therefore, you’re cutting out the middle man. We’ll give you a word of caution though: make sure that you run a CarFax report when you’re buying from eBay or looking at Craigslist and you’re doing a one-on-one sale with individuals even with an ad in the newspapers. It’s worth the investment to put the VIN number through CarFax.com, and you get a detailed history report of the car so that you can know whether or not the history of the vehicle is good and whether or not you should move forward with the purchase.

You have to get yourself out of the mindset that you constantly needed a new car. A lot of people think this way. People get to the point where they’re almost car loan debt free and then they go sign up for sixty more months of payments and more debt. Why? Because we’ve been brainwashed to think that every three or four years, it’s time for a new vehicle. That’s a cycle that you have to break because you’re only going further and further into debt. Cars last way longer than they used to. Both of our cars have hit the ten-year mark. Your vehicles can and will last if you take care of them, so don’t get into that mindset that you’ve got to get that new car every three or four years.

One of the books that I love and read over and over again is The 7 Habits of Highly Effective People by Dr. Steven Covey, and one of these habits is to be proactive. If you want to get to the point to where you’re paying cash for cars instead of signing up for monthly payments, you have to be proactive. Being proactive in the car buying process gives you the flexibility and the ability to make smarter decisions when you get to the point where you need to purchase a vehicle, instead of getting to that point and making irrational decisions based on the fact that you need a car and yet you don’t have the cash to do so. As a result, you end up going out and financing a car once again. Let’s stop the cycle of acting like you need to be in debt. That simply does not have to be the case for you and your family. Stop believing the lie of the culture that tells you that you need to be in debt in order to be an American and live the American dream. Stop throwing money away into things that do not go up in value. Let’s build wealth and put our money into items that will increase in value over time.

We have a challenge for you – let’s evaluate where we’re at when it comes to our vehicle. If you’re currently trying to get out of debt with your car, then put in the hard work that it will take to get rid of it. Also consider even after you pay it off, keeping the car note but putting it into a savings account. Learn to hate your debt once and for all.


Thanks for tuning into us on The His & Her Money Show. If you have any comments or questions about today’s episode, please let us know your thoughts in the comment section below. If you’ve enjoyed this episode, please share it using the social media buttons you see at the bottom of the post.

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Source: His and Her Money

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Did you know?

African Americans are significantly more likely to have some type of debt (94%) compared with the general population (82%). Credit card debt, student loan debt, and personal loans are all significantly higher in the African American community.

Source: Prudential’s 2013 "African American Financial Experience" study