Blog 6: How to hold off on buying a new car

Hopefully you’re here because you read my blog earlier in the week about what other advisors get wrong about car buying. Maybe you’re actually in the market for a car or will be in the next year or two. Personally, Melissa and I are in a great, but uncertain, position car-wise. We have two fully paid off cars: a 2011 Mazda hatchback and a 2014 Ford Explorer. They’re each ‘only’ at 100k miles and, knock on wood, they haven’t given us many problems. We’re likely going to replace the Mazda with a bigger family car (minivan or third row SUV), but it’s hard to take on those payments when we don’t need that car right now. So how do you delay a car purchase?

1. CLEAN. YOUR. CAR! Make your car nice again. Whether it’s washing the exterior of your car or wiping down the inside, make your car look good so you feel good driving it! Throw out all those gum wrappers, dust the screens and panels, and vacuum out the back seats. Dog slobber on your window? Windex that sh*t! Put some pride back into your vehicle and appreciate it for all that it can be.

2. Buy something for your car. “Tom, I thought this article was about saving myself from spending money??” It is… Maybe your driver seat is coming apart and a new cover would spruce it up! Maybe your black interior car gets too hot in the summer, so buy a sunshade. Or you see new cars with all their new tech, then buy your car a new phone charger. Maybe your car feels a bit too small and longer trips to see family or vacations means not being able to cram everything in. Your next car is going to be larger, right? Then make your current car bigger by buying a roof rack or a tow behind hitch. Buying something for your car can revitalize how you look at something you’ve been looking at for the last decade. And those things you bought for it? You can always take them with you when you do eventually buy a new vehicle.

3. Start a ‘sinking fund’ for your next car. Some banks (like Ally) allow you to create ‘buckets’ within a single checking or savings account. If you have $5,000 in an Ally savings account, you can divide it into as many buckets as you want which gives definition and reason to specific amounts of money. If your bank doesn’t do this, it might make sense to open another account to specifically keep this savings properly labeled: My Next Car Purchase. Make a plan to put a specific amount, say $150, into this account each month. You can go one step further by establishing an amount that you have to get to before you’ll even consider car shopping again.

4. Reward yourself for accomplishing a good financial goal. Every month you put off buying a new car you should take your current car and go drive to Starbucks to treat yourself to a latte. Or every six months without breaking down and getting a new car, you buy yourself a new shirt. You were probably going to get that coffee or clothing item anyway, might as well attach it to a good decision you made and reinforce your good behavior. One $5 purchase a month isn’t going to sink you the way a brand new $700/month SUV will.

5. Think of the flexibility you’re giving yourself. Are you thinking about moving, changing jobs, losing your job, or buying a house any time soon? These are all potential reasons to NOT sign yourself up for a big car payment for the next 48-72 months. Keeping an older car gives you flexibility to change your life and feel less pinched. So every month you keep your car raise a toast to you and relax a bit knowing you’ve got more options without a car payment.

To be completely truthful, I haven’t always loved my little Mazda3 hatchback. The front seat is uncomfortable, it doesn’t have any technology in it, and it’s not that great on gas (19 mpg). I wanted to get rid of it back in 2015 but I’m really glad I didn’t. In fact, the moment my payments ended I started to like that little car more and more and more. Likewise, our Explorer which we bought used in 2018 was paid off in the summer of 2023. I don’t love it, but I like it a LOT more now that it’s paid off. We’re a no car payment family, for now.  I know that’s going to change and the way that cars are more and more expensive I know I’ll have sticker shock when we do eventually buy. If you have questions about your car situation, reach out to me and ask! And if you have a topic you’d like to see highlighted in my next blog, let me know!