Finance Tip Friday #27: How to Purchase Cars in Cash

Car Dealership Car Car Showroom  - mohamed_hassan / Pixabay

Want to buy cars for cash? Then this is how you do it:

Open a bank account.

Deposit $500 a month into it.

Do this monthly and stay very disciplined. Essentially, treat this as a car payment.

In 4-5 years’ time, you will have enough to buy a car CASH.

This takes some time, and it takes discipline, but it is what I am doing. I never want to finance a vehicle ever again, so this is how I build up my “new car fund.”

I paid off my current truck and have no car payment at present, but I still act like I have a car payment. I deposit $700 a month into a separate account. In about 5 years (or longer, depending on how long I want to keep the truck) I will have enough to go down to a dealer and buy a car CASH. What does this do? It saves you the interest and the finance charges which can be in the thousands!

This also gives you the opportunity to buy cars for cash at auctions. There are usually a few car auctions in any given area every year. If you have cash, you could find an amazing deal! My uncle in law does this and he finds amazing deals, but it usually requires cash to do so.

Additionally, if you use the vehicle for business, you can obtain a lot of upfront depreciation from the get go. Talk to your CPA about that one and it is explained in the tax course.

If you want to have the cash to purchase a new vehicle every 5-6 years, then follow this simple tip and you will always have the funds to buy a new car!

4 Responses

  1. I agree with this! My husband is purchasing a truck in cash today. The weight of not having a payment is huge! We will depreciate it this year for taxes as well.

  2. Love the idea. Wonder if I take my monthly savings to stock market investment instead then sell in a few years when I’m ready to buy a car? Just thinking about the inflation and cash depreciation. What are your thoughts on this? Will I maximize my money’s worth? Thank you.

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