Wednesday, April 22, 2015

How to Pay Cash for Cars - Lesson 2: Thinking Differently

Thinking Differently

What if we got really radical, as scripture teaches, and came up with a plan to make our money work for us?

Let's think out of the box for a minute, and look at an example of how this might work. Say you want a new truck with a payment of $475. If you pay your self that same payment you will have $4,750 in ten months. If you add that to the $2,500 your old truck is worth you can pay $7,250 cash. I bought my last pickup with 80,000 miles for cash for under $5000, so I know this can work.

If you kept going at this rate you'd have another $4,750 saved in 10 months. Chances are, less than a year later you can sell your current truck for about what you paid for it and if you add the $7,250 to the $4,750 you saved, you can step up to a $12,000 truck.

Now let's go crazy with this. For 20 months you have been paying yourself a car payment. You don't owe the bank anything, and you are driving a great $12,000 truck. Remember, you were ready to sign up for 6 years of a $475 car payment.

So just for fun, let's carry out our new plan for the full 6 years, paying ourselves a car payment and investing it. Our $12,000 car/truck has just about run its course and we need to upgrade. No problem, you have a mutual fund for purchasing that next car. At the stock market average of 12%, you'd have $32,000 sitting in that fund.

Next lesson...Drive Free Cars.

Brian and Lisa Petersen, lead the Financial Peace University course at Autumn Ridge Church. Many concepts like the one discussed in this article are taught in FPU. Brian and Lisa want to help you be successful with “Paying Cash for Your Car”, and welcome your questions and dialog. They can be reached at

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