Savings Strategy: Love Your Car!

Savings Strategy: Love Your Car!

Transportation accounts for 13% of households income on average.  In my area, the average family spends $608 a month on transportation, according to the Economic Policy Institute.  With the way we are building in the U.S., with massive highways connecting far flung suburbs with city centers, these transportation costs can be a permanent spot in our budget.  While living in an urban city may eliminate the need for a car, people still desire to live in the suburbs where a car is a necessary part of life.

As time passes, cars are not becoming any more affordable and dealers are stretching out the car loans to entice people to buy even more car.  You can get a car loan for six or seven years!  Even if you get a car loan for 0% down and 0% interest per month; this is still not a good deal.  You are dedicating a certain amount of money per month for the life of that loan; there are an incredible amount of lost opportunity costs associated with that.  Let’s say your car loan is $300 per month for six years; that is $21,600 in total payment.  If you put that same amount in a mutual fund or index fund you will have $26,618 after six years (if it grows at 6% a year).  If you have saved the money for the car and paid for it in cash, you would have an extra $5,018 leftover to invest or take an awesome vacation (this is assuming you don’t get an extra discount for paying cash which is quite likely).

Yes, based on your situation you may need a loan to purchase a car.  That is what I had to do to buy my last car.  I had graduated from college, moved to Florida with a car with no air conditioning, and was struggling to find my first day job.  I was working all types of odd jobs trying to make ends meet until I  finally landed a day job, hooray!  But now, since I was in Florida and it was almost summer, I needed a car with air conditioning so I wouldn’t show up to my new shiny job looking crazy (curly hair + humidity/wind = disaster).  So I did some research and ended up buying my car with a five year loan.  I did my best to pay it off early, with other expenses that was difficult but I finally got it done.  I have found that the real savings comes by not upgrading your car once your loan is paid off.

Once your car is paid off, there can be a lot of pressure to upgrade your car.  But stay strong and ignore those pressures, embrace your car and love it for as long as it will last.   Cars are made to last much longer than the end of your car loan.  Even if you have to do some maintenance on your car, consider the maintenance cost in terms of car payments.  If a new pipe something or other is going to cost you $600, yes that is a lot of money, but it is only two months of car payments.  If your car last two months or more, that maintenance was worth it.  I had to struggle with a certain maintenance cost of my car, it was about $1,000.  I hemmed and hawed, then hemmed and hawed some more, and finally decided to do the maintenance and hoped and prayed that my car would last four more months to cover the cost.  It has been about 30 months and counting, and I am very happy I have held on to the car.

Once you have paid off your car be sure to start a car savings account, putting a certain amount of money in it each and every month.  This way once you do have to buy a new (used) car you will have the cash to do so.

You can save an enormous amount of money by holding on to your car as long as you possibly can.  I am up to 13 years with my car, which was a year old when I bought it.  It can be hard to not get pulled into society’s influence to constantly upgrade your car.  I do wish my car had less dents (I bank the money when I get hit), all of the paint on the front (no one told me about love bugs!?!) and seats warmers, but I am in a much better place financially not having those things.  Sure, sometimes I am embarrassed by my car, but being just like everyone else has never helped me advance in any situation.  Being different, creative and determined has made a difference in my life.  So I like to remind myself that my car is unique; I can find it faster in a parking lot, my insurance is lower and my savings accounts are much bigger because of this!  I hope you will consider holding on to your car longer.


Are you getting bored of your car?  Here are my 3 favorite steps to falling back in love your car.

  1. Give it a good cleaning, inside and out. Help it shine back to its former glory.
  2. Decorate it as you would your favorite room in your house. This will help keep it fresh and interesting.  Do you have a favorite pattern blanket?  Lay it on the front passenger seat for a pop of color.  Hang something fun from the rear view mirror.  Pick out a new scent, I would pick a pine/mountain or ocean breeze scent.
  3. Reminisce about all of the fun road trips you have taken in the car and all of the jams it got you out of! Your car is like an old reliable friend.  Always around when you need it and ready for any adventure you desire.  Appreciate the fact your car is always down for an adventure!


Part of Financially Savvy Saturdays:


  1. A car is a depreciable asset. Unless you keep it a really long time, it’s going to keep dropping in value the longer you drive it, and new cars drop much faster than old ones. So, as you’ve said, driving paid off cars is one of the best things you can do to save money, and extending the car’s life can help a lot.

    To help keep your cars running as long as possible, 1) Don’t skimp on maintenance. Make sure you’re keeping up with oil changes, tire rotations, etc. If you can invest some time into learning to do the maintenance yourself, you’ll save even more. 2) Drive gently. Not only will you get better gas mileage, you’ll also be less likely to be in an accident if you ease into your starts and stops and don’t go too fast.

    • Thank you for your comment. I completely agree, maintenance is key for driving an older car. That’s great that you have learned to do some of the maintenance yourself, that will definitely save some money.

  2. I’m really attached to my car. It’s 9 years old and I’m hoping to get another 9 out of her. I’m actually fine with paying a little on maintenance to make sure she keeps running fine and Toyota has a pretty good record of lasting for a long time, so fingers crossed!

    • I hope it lasts another 9 years! Car are made to last a longer than the majority of people tend to drive them. And while it can be challenging to not up grade your car when it seems like everyone else is, it is so worth it in the long run.

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