Trouble with those two little paid-for beaters is that they require repairs at random intervals, that can be expensive. Sometimes you can ignore those repairs (most people don't care about suspension repairs unless the car is unable to move), but dead alternators, transmissions, transaxle shafts, blown heater cores (very expensive to fix), tires, etc, can be expensive and random. At least with a payment, you have a set amount every month that you're paying, a known quantity, so that you don't have to come up $1,500 out of your pocket on a Tuesday afternoon.
That said, $24k apiece for their cars is a lot, IMHO.
That said, $24k apiece for their cars is a lot, IMHO.
Do the math. Are you really going to spend $14,000 in repairs on a $10,000 car over its lifespan? No way. My wife and I are in the habit of buying used cars in the $5000 to $10,000 range. We pay cash for them, and we maintain money in an INTEREST BEARING account, standing by for the day when a car needs repairs. Sometimes I do the work myself, or my father-in-law does the work, and all we pay for is the parts.
We never have a monthly payment for a car. We're making money on interest, and the bank isn't. When one of our cars breaks down, we get by with one car instead of two for a while. If there are things going on that really require two cars, we rent one.
If the repairs are going to be really expensive and time-consuming (meaning a blown engine or transmission), we sell it on Craigslist to the highest bidder, and we go out and buy another one. It isn't hard to get $500 or $600 for it, because we always buy popular vehicles like the Ford Taurus or the Chevy Blazer. Somebody's always looking for a parts car to fix their own. Or they have a working engine or transmission, and they want to buy a car to put it in.
And we spend a lot less on insurance too, because we only pay for liability insurance, not full coverage.
Even if you don't do some of the work yourself, you'll still save $8,000 to $12,000 a year.
“Trouble with those two little paid-for beaters is that they require repairs at random intervals, that can be expensive. Sometimes you can ignore those repairs (most people don’t care about suspension repairs unless the car is unable to move), but dead alternators, transmissions, transaxle shafts, blown heater cores (very expensive to fix), tires, etc, can be expensive and random. At least with a payment, you have a set amount every month that you’re paying, a known quantity, so that you don’t have to come up $1,500 out of your pocket on a Tuesday afternoon.”
With cars like that the combined payments are going to be $800-900 every month. With savings like that one could afford a pair of new transaxle shafts every 3-4 months, a bi-annual valve job w/ tune up and new tires and a heater core once a year. Just put some money away for it. JMHO, but I drive junk, and I could pull $1500 out of my backside any day of the week.(because I don’t have a car payment)