A few years ago we paid cash for our van. Since buying a van we have purchased two other cars for cash. These days having a car payment seems like a way of life, but let me encourage you to have a car payment!

Do we drive brand new cars- No
Do we drive reliable, clean, and paid for cars- Yes

If you want to rid your life and your budget of a car payment here are 5 simple ways (or not so simple) to make that happen.

5 Simple Ways to Not Have a Car Payment

Pay Off Your Current Vehicle

When we owed money on our vehicle we started adding extra money every month to the payment. To make sure we paid extra we made the deductions automatic. Any extra money that came in went to the payment.

Side note: if you still have credit card debt or other high interest loans, pay off those first! When we were getting out of debt we only had a car payment left, so all the extra money went towards paying off the car.

When Your Vehicle is Paid For, Keep Driving It!

After you pay off your vehicle, don’t trade it in for a newer model, keep driving it. According to The Simple Dollar, the average American family spends $300 a month on a car payment. If you drove your paid for vehicle for 2 years and saved that car payment money you would have over $7000 CASH saved for a new vehicle.

When I think back over the cars we have owned throughout the years, I noticed that we drive them until they wear out or we don’t need them anymore. We drove our suburban for twelve years, then passed it down to one of our kids. My husband has been driving his car for over eight years now. The longer you can drive your car after it is paid off, the more money you are able to save. Even if you have to spend money on repairs, it’s usually cheaper than purchasing a new vehicle.

Sell Your Current Vehicle and Buy a Clunker

A few years ago we needed a “get around car” nothing fancy, just something for my husband to drive to work. We researched the most reliable older vehicles and narrowed our search. After looking for a few months my husband found a car for $500! This was in the D.C. area, where prices are not cheap. Since purchasing the car we have put another $300 into maintaining and making repairs.

After ten months of owning the car we spent a total of $800. That equals an $80 a month car payment, which is significantly less than the national average of $300. Even if this car lasts us a year or two we have accumulated a large savings for another vehicle.

That car ended up lasting us about three years. We spent around $1000 in repairs to maintain it during that time. So the car cost us $500 a year to own, which is less than $50 a month!

Drive Your Vehicle Until it is Ready for the Junk Yard

We never had new cars growing up. My dad’s philosophy was to drive a car until you have to pay someone to take it out of your driveway. That meant we would have the same car for years. But it was years of not having a payment. Yes, there were repairs (although my dad always found inexpensive mechanics) but they were less than payments. By the time our cars were ready to be towed out of the driveway (and yes, this did happen) my parents had saved enough money to replace our vehicle for cash.

In 2000, we bought a two year old minivan. We took out a loan and paid it off in 3 years. Then we continued to drive this car for 6 more years. During those six years we were able to save our $250 car payment. When we finally sold the van (for about $1000) we had saved around $18,000 for a vehicle. Do you know that you can buy a really nice used car for $18,000? I know this because I am driving it right now. While our minivan wasn’t the prettiest thing to look at we kept driving it because it worked, and it was paid for, and we were savings towards the future.

Go Without

When I wrote about owning only one vehicle a few years ago, people told me it just wasn’t possible. I still disagree. For years we were a one car family, and I have many friends who are still a one car family. Can it be inconvenient, yes, does it require sacrifice, yes, will you miss out on things, probably. But if you need to get your finances under control this is one way to do it.