I Just Paid Off My Car; Should I Trade It In Now?

Congratulations on paying back your car. There were likely to be days along the way when you worried the car wouldn’t last as long as the loan of the car. But it made it! You have been raised to be a huge financial step forward. Now what?

Follow this simple system and you’ll never have a car payment again!

1.  Go on the car you have just. Take care of it. You want everything baby to continue years. (If you haven’t told your car lately that you love her. Now might be a good time.)

2.  Need to ensure that the car payment. What!?! Make the car payment into a savings account. Keep the money sacred for your next car.

3.  Buy a “new” car. When the cash accumulated plus the value of your trade-in (which we know is going down every day) combine to buy you a car you’d like, one that you can drive comfortably for years to come (even if it’s a used car), go ahead and buy it.

4.  Don’t borrow any money. When you purchase your car, don’t borrow any money. If your savings are only $5,000 and your trade in is only worth $5,000 either buys a $10,000 used car or awaits your savings to accumulate a little more.

5.  Need to ensure that the car payment. What!?! I know, I pointed out that this before, but you just bought a perfectly good used car for cash and you might be able stop doing just payment. Don’t stop. Keep putting the car payment into your savings account month after month. In five years, you’ll have enough to purchase a very nice used car or an affordable modern car.

6.  Don’t borrow any money. You’re beginning to see the pattern, aren’t you? Now that your car is paid off, you never have to obtain a car loan again. Just be disciplined enough not to buy a car you can’t afford to purchase for cash.

Let’s put some numbers to this example. If your car payment was $500, you can save $12,000 in two years—plus you’ll earn interest on that. If you had a five year loans on a new car, your car is located in a position to seven years old—still in very nice shape. It may be useful to $10,000. You can now buy a car costing about $22,000. Yes, it may be a used car, but likely only a few years old. You can easily file an application with another five years. At the end of the five years, you’ll have $30,000 plus interest in savings and a car worth about $10,000 as a trade in. You’ll be in a position to purchase a car as virtuous—or nicer—than the one you bought five years ago—, but this time for Cash! Just do your $500 per month car payment to yourself for the next seven years and the neighbors will really be struck with the care you bring home.

Chances are, however, when you start spending your hard-earned savings for your cars instead of the bank’s money, you’ll find you have less interest in the fancy car and more interest in the other things you can get through with the money. You have kids who need to get to college. You want to retire. Pursuing this system will put you in financial control of your life and empower you to better plan your family.