Have you ever pulled up to a red light and noticed you’re the only person driving a car thats year model doesn’t start with a 2-0. ? Sure it’d be nice if the cassette deck would spit out the tape from 1992 and if it didn’t have that whining noise under the hood when you start it up on cold days. Yes, those other cars have their shiny paint and 4 matching wheels,
but yours is paid for. Sometimes when I’m at a red light and notice that every car around me has the car dealers paper tags still on it, I guess at what the car payment is on each car and total it up. This morning I totaled up $3800 in car payments among the 9 cars around me at a red light. Have you ever done the math on the cars in your church parking lot? It’s TENS of THOUSANDS of dollars each month. Yet the average evangelical Christian in North America only gives 3% of their annual income to the local church. Just once I’d love to pull into a church parking lot full of jalopy’s and know that the church just paid cash to put water wells up in Africa, the whole continent not just 1 area. As I sit here and write this post a Range Rover Sport Autobiography Edition, my current dream car, just parked at the coffee shop. The price of this car is about $90,000 so needless to say I’ll be leaving here in my paid for Honda Accord.
In America it’s become common for the car we drive to define who we are. The person with a car missing paint we think, “bless their heart,” while the person who just rolled up in the Lexus we think they’ve got things together. Me, I think the person that just pulled up in the Range Rover has a $1,300 car payment. What’s crazy to me is when you do the math on financing a car, you quickly learn that it doesn’t take much Sacrifice on your part in order to Win in the car department. Take a look at this example:
Brand New 2011 Nissan Altima: Purchase price $23,000 and monthly payments of $440 for a 5 year loan. 36 months from now that car will be worth about $13,000 and your loan payoff will be $10,200 leaving you with $2,800 of equity.
Sacrifice to Win Model: Scrounge together $1,000 cash to buy yourself a hooptie or see if someone you know would be willing to let you borrow a car for a short time period. Now, save the $440/month car payment for 3 months. Sell the $1,000 car and put your 3 months savings together to go buy yourself a $2,320 car. Drive this for 3 months while saving the $440/month car payment and then sell this car. When you’re driving cars this cheap, they don’t depreciate! Take your $3,640 and go buy yourself a car while saving the $440/month car payment for 4 months. Sell this car and put your savings together to go buy a car for $5,400. This is starting to get you into fairly nice, high mileage cars like Honda’s and Nissan’s. Sell this car 8 months later and put your savings with it to buy an $8,920 car. You’re now 18 months into this process. This car should be a very nice mid-mileage car with a great engine and transmission. Drive it for 18 months saving the $440 car payment each month. At the end of those 18 months sell the car and use your savings to go buy a $16,840 car.
Both scenarios look at 36 months down the road. By buying and financing the new car, 36 months in the future you’re driving a 3 year old car that’s worth $13,000 and have $2,800 of equity. By Sacrificing to Win and driving junk cars for only 10 months and then moving into some nicer high mileage cars, 36 months down the road you’re driving a $16,840 car that’s probably nicer than the new car you would’ve bought and you own it DEBT FREE!
I can do anything, legally and ethically, for a short time period in order to win long term! What about you? Could you drive a hooptie for 6-10 months? Is it possible to live life without a car payment? Leave your thoughts in the comments.