Kosmo wrote:Now what you really need to do is to keep making that monthly car payment to a savings account so your next car can be bought in cash.
This is exactly what I was going to post, and it's exactly what I'm doing.
Keep that "future vehicle" money separate, otherwise when the time comes for a new ride, you're going to end up financing again!
Me too. However, I only keep a mental accounting, lumping it in with taxable investments. After 7 years between car purchases, it let's me choose to buy 2 new cars or a very nice luxury car. I'm probably going for the latter.
Besides the car payment, it's avoiding paying the bank interest AND earning a return on the cash.