Why We Paid Off Our Car In A Month

About a month ago, one of my worst traveler dreams came true.

Keaton and I have both been driving old cars for a while. We always joked that we would pat our Blazer, affectionately called Bess, and tell her she was doing a good job from time to time. She had a new transmission, new tires, and overall had gotten us through some tough financial times when Keaton was finishing up grad school and we were still living on one income.

When Keaton started his first job, we discussed the car issue. There was absolutely no discussion of a car payment, but we were trying to decide when would be a good time to save for a new car in cash. Tentatively we had planned to pay off my student loan balance this assignment, and then try to buy a car within the following six months. We had shopped around a bit, and had an idea of what we would spend when the time was right.

Welp. The Universe had other plans.

About two months into my assignment, I was on my way to work. My commute is about 50 minutes away, kind of in the middle of nowhere Wisconsin. I noticed our dear Bess wouldn’t accelerate past 60 mph on the interstate. I got off on the state highway, and stopped, shut the engine off, and restarted. Making my way down the county highway, she decided not to go more than 45 mph.

At this point I called Keaton, and told him to be on standby to come get me. I knew at the very least I was going to be late, since I was being forced to drive 15+ mph less than I normally do for the last 20 miles of my commute.

15 miles from my job I hit the last small town before the town I work in. At this point, the spedometer read 30 mph and I could smell the fumes as I was accelerating and the fuel was going nowhere. I could also see that I had gone through about 1/4 tank of gas in 15 miles. I called Keaton, told him to head out, and called work to tell them I’d be late.

Side note: everyone at work were angels about it. No one was grumpy or rushed giving me report when I showed up late, and the charge INSISTED I take her offer for a ride to Enterprise the next morning. Couldn’t ask for better coworkers on an assignment.

Bess met her end that chilly night on a Wisconsin back road. AAA towed her to a shop in town, and then she went to her final resting place in a local junkyard. Between new transmission issues, radiator issues, and some serious oil leaks, it was really too much to justify another fix.

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Saying goodbye to Good Ole Bess

Cue a mild (okay, maybe extreme) panic attack. We had some very specific financial goals for this assignment, and all of our money was set to go toward something.

We sat down, and started doing some math. Luckily, we had been saving to make a large payment on my loans, so we had a decent chunk of accessible cash. In addition, we totaled up how much we could save within the month if we had to. There were three options for how to tackle the car problem from there:

  • Buy a beater. Find another older, used car in decent condition.
    • Pro: Kept money in our pocket right now to use towards debt, etc.
    • Con: Fairly good chance something major could still go wrong. Likely to have higher mileage as well.
  • Rent a car for a month while we continued to save.
    • Pro: We would 100% have our full budget in our pocket when we went to shop. No need to short term finance.
    • Con: The cost of the rental would basically be going nowhere.
  • Put what cash we had down, pay the rest in a month
    • Pro: We could walk out with our car, and just be done shopping. No cash lost on a rental, etc.
    • Con: Dealing with short-term financing, including associated fees and potentially interest if we didn’t pay it off in time.

Ultimately, we plan to be traveling for the next 5+ years. We will probably average 25,000 plus on our vehicles per year. Knowing that if we bought an older car, we’d be looking at 150,000 miles or more already on it, this option was basically ruled out. We wanted to be able to focus solely on debt, and not have to worry about another car breakdown six months from now.

So, we started online shopping. We found a handful of cars that satisfied our requirements for a new car: low mileage, less than 5 years old, and all wheel drive. The following weekend was the only free weekend we had for a while, so it was decided we’d go out and test drive a few cars, consider options, and go from there. Our mindset was this: we would not purchase unless we were 100% satisfied with a vehicle, and we were totally fine with option 2 if none of the cars worked out.

After a long day of shopping, we found a car that hit all of our markers. With less than 30,000 miles, it was the best we could hope for in our price range. It was marked below the Kelly Blue Book price, and drove beautifully.

We did walk away with a car that evening, and paid it off within the month. Every decision we made this month was made with that payoff in mind, and we hit our goal last week.

Many people would argue that having a car payment isn’t that big of a deal. It could easily be fit into our budget, and we could have paid on it no problem. However, our goal is to be debt free by next fall, and we decided for us it was better to buy a reliable car and pay it off as quickly as possible in order to keep our eye on the prize of financial freedom. We don’t want our paychecks each month to go towards this payment or that payment, we want to spend our money on things we really want, and experiences we will treasure.

Although we didn’t exactly follow the Dave Ramsey suggestion for purchasing a used car, we did make the decision that was best for us and our circumstances. Being stranded on that Wisconsin county highway, with no Uber or taxi to rescue me, really engrained how much we need reliable cars as we are traveling to new places with little or no help around to rescue us. Our cars are our tickets to our debt-free plans, so we had to make the best decision for us with the options we had.

Hopefully, this helps someone else in a sticky car situation. I don’t know how many times I wished I could just live without a car in the last month, but it is a necessary part of life on the road. We are still making progress towards our debt free goals, and enjoying life in between!

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Our new beauty, Ruby. 2013, AWD, 29,000 miles. She’s a funky looking thing but I’m kinda loving it.

❤ Alex

 

 

 

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