Car Payments: Just a Part of Life?

In June, I had the pleasure of finding out that my car of 5 1/2 years, and recipient of mountains of maintenance costs, had a transmission that was ID-10098865going out on it.  This led to the decision to purchase a new car a little earlier than we had been planning.  During this search, I was introduced to some “advice” from a car salesperson that I couldn’t believe and truthfully, was saddened to hear.

While looking at a couple vehicles at a dealership, we decided to get pricing on one.  As my wife and I were discussing what we were looking for and our price range, our car salesperson tried his normal tricks at trying to get us to buy more car than we were looking for.  He completely ignored the out-of-pocket cost range that we were looking for and tried to push us up to the longest term loan they could offer.  His reasoning for doing this?  Well, “A car payment is just a part of life.  It is another line on the budget.  I figure that I will always have that car payment sitting there so why try to avoid it.”  This was the point that I completely checked out of the conversation, gathered our items, and left with the wife.  I couldn’t believe what I had just heard and was frankly saddened that this was the type of “advice” that was being given out.

This type of mentality is something that I hate.  The idea that “debt is just a way of life” and “if I can’t afford something, I will finance it” are some of the most troubling ideas in our day to day society.  Just because the ability to take a larger loan and pay it over a longer period is there, shouldn’t mean that you now have the ability to purchase something you otherwise couldn’t afford.  According to Experian Automotive, in Q4 of 2013, the average new loan balance crossed over $27,000 for the first time, while the use of 6 or 7 year terms hit a record 20% of all new loans.  This data correlates perfectly with what I saw during our car search.  Between the audible gasps when I informed our salesperson that we would be putting down 50% cash and the “advice” that we should buy more car than we wanted since they could offer us more financing and a longer term, my eyes were opened to the types of challenges out there.  But these are challenges that can be avoided.  Saving money for big purchases and not taking out extra debt just because it is offered to you are great ways to set yourself up to succeed financially.

Debt is not a way of life.  If your goal is to be financially independent or wealthy, a “keeping up with Joneses” mentality is never going to work, no matter what terms a salesperson is willing to give you.  We might not be able to change the opinion of those around us, but we know the secret.  Debt brings us down, while saving opens up countless opportunities.

Have you ever been told that debt is a way of life?  Do you finance or pay cash for your vehicles? Or a combination of both?

Photo Courtesy of: Stuart Miles,

Linking up with: Friday Jet Fuel

*Part of Financially Savvy Saturdays on Femme Frugality and
Debt Discipline*