Never have had a car payment. Always paid cash for used cars, generally Japanese, that were 2-4 years old. Keep it simple - I excluded all maintenance and fuel expenses. Yes - maintenance expenses can be more with older cars, but with hondas and toyotas the maintenance expenses outside of warranty can be minimal, especially if you buy certified pre-owned.
Say you pay $17,500 versus $35,000 and drive for five years. Saving $17,500 every five years for 30 years, as an example, totals $105,000. Please note this excludes all the income you have earned from investing an additional $17,500 every 5 years and future compounding. Now take that times two cars......$250,000 is light.
Key assumption- buy 1/2 of what you can afford in homes and cars and invest the rest. It works.
You can use this formula on.leasing cars, lease 1/2 of what you can afford and invest the rest.
I drove a car I bought for $1,000 when I was 16 and drove until I was 26. Paid cash at 26 for 1/2 of what I could afford and started the cycle.
