This is the second of a “My Debt History” series this week. If you missed Part 1, check it out here!
As I said yesterday, after I paid off my student loan debt, I quickly went into debt again with a new car.
I’m an avid Toyota and Honda fan since they are so reliable and we’ve had a loving and respectful car-owner relationship over the years. I think buying one of these cars is one of the smartest financial moves you can make. But since this isn’t a Car Tips Blog, I’ll move on to the point. 😉
I drove a cute little old Honda through the latter part of high school and all of college. Even though my Honda was fast approaching the 200,000 miles mark near the end of my college days, I was really hoping that I could keep her for at least another year or so after college.
Hope as I might, my little Honda just couldn’t make it that far. Bless its heart, it made it about 6 months after college before the ‘ol speedometer went out. And then the RPM-ometer (rev-ometer? I don’t know.) went out. And then the car itself went out. She was the little Honda that couldn’t – anymore. After a couple hours of mourning, I went new car shopping! Hooray!
I know there are some folks out there that absolutely swear by used cars and will only buy used cars. That’s fine and I think that works well for a lot of people. My next car will probably be used. However, I had always driven used cars, and just once in my life, I wanted a brand-new car. I think buying a brand-new car is just fine if you plan to pay it off quickly AND you plan to drive the shiz out of it (excuse my slang). I mean it, I am a firm believer in driving a car until the day it absolutely won’t move forward without someone pushing it. I’ve said it before and I’ll say it again – cars are a horrible investment and should be treated just so. Don’t go out and buy the newest and latest edition every year – you’ll only be digging your financial grave!
Ahem. Now, where were we? Oh yes, I had just decided I wanted a new car. After about a week of courting several models, I picked my dream car-mate (kinda like a soul mate, only mechanical). Of course with my shiny new ride came a heaping load of debt – $17,000 to be exact on a 5-year loan. My first car payment was December of 2005 for $320. My original plan was to pay my car off as quickly as possible – which is very easy to do when you live with you parents…
I plucked down the minimum monthly payment for a couple years and my total loan amount inched downward at the pace of a snail. It was frustrating to say the least. Here I was again with a mountain of debt! I wanted to get this paid off – fast -because who knows how my life would change in FIVE years – that’s a long time!
But I couldn’t pay it off. And there was a reason why – I moved out on my own in April of the next year and found myself funding my new independence with credit cards and a lack of self control…
Stay tuned for Part 3!