Every single car we have owned we have bought with cash.
To be honest, that wasn’t the plan when I dreamed of buying my first vehicle; I just got denied for the first (and only) car loan I applied for. Back then, 2006 to be exact, we weren’t putting much thought on our finances. Thinking back, not getting approved for that loan was a blessing in disguise. Car payments have never been part of our lives and we like it that way.
So far, I still remember how much we paid for each car we have owned and roughly how much we spent on repairs. I wanted to share our car-buying history in this post as it may be useful if you are considering saying “no” to car payments.
I understand not every aspect of our experiences is fully reproducible. However, I hope our journey shows that buying cars with cash is totally possible and it doesn’t necessarily mean holding doors and windows with duct tape or pouring a fortune on repairs.
If you commit to not borrow money for cars, it won’t all be as easy and convenient as walking to a dealership, signing a few documents, and driving away in your new (or new to you) ride. Buying used has its uncertainties and may not be for everyone but it was totally worth it for us.
Let me tell you how we did it along with a few facts including year and model, price, buy/sell year and estimated repair costs (excluding general maintenance such as oil changes).
#1: Saturn SL 1999
Year Purchased: 2008
Purchase Price & Mileage: $1000 / 99,xxx
Year Sold: 2011
Estimated Repair Costs: $450-600
Fun Fact: For the first few days of having the Saturn I only made right turns to go places. I was new at driving manual transmission and was terrified of stalling in the middle of traffic when making left turns. Feel free to laugh 😊
In 2006 we moved cross country so I could start graduate school. Our apartment was very close to the university so I could walk there during the week. Mr. Fimigrant was able to bring his motorcycle in the moving truck and the weather allowed him to use it year-round. Public transportation was also accessible so having a car wasn’t a real necessity.
Every so often there would be a trip that would get tricky without a car. However, luck was on our side as one of my college friends, who also lived in the same apartment complex, always offered us to borrow her Saturn if we needed it. We would get her groceries in exchange for the favor and always returned the car with a full tank of gas.
Shortly after my car loan application got denied, she upgraded her vehicle and offered us to buy her Saturn for $1000. I didn’t know how to drive stick shift at the time but I wasn’t opposed to learning. We decided to go for it and buy it as we didn’t want to pass on the opportunity to buy a vehicle we knew well at a price we could afford.
Over the years we owned the car, repairs included replacing a cam sensor, starter motor, and ignition coil. Mr. Fimigrant was often handy for the repairs (with the help of YouTube videos) which saved us on labor.
When I graduated and we decided to move cross country again, we sold the Saturn for $900. In hindsight, selling it for the higher price suggested by Kelly Blue Book or taking it with us would have been a much better decision.
#2: Subaru Forester 2001
Year Purchased: 2012
Purchase Price & Mileage: $6000 /79,xxx
Year Sold: 2017
Estimated Repair Costs: $800-1000
Fun Fact: This was the vehicle that made me love driving manual transmission and it is still one of my favorites when it comes to how it handles in the snow. It was also my first car that played CDs! 😊
We had saved a little money to buy car #2 and it helped to have my company help with relocation costs. I called a friend whose dad worked at a dealership to check if he had anything that could fit our budget. He told us about the Forester which had just come in as a trade in. It had a few rusty spots here and there but aside from that, we trusted his mechanical assessment.
Right after purchasing it we had to replace and O2 sensor and repair the front axle which was a bit disappointing. We were able to negotiate with the dealership and they agreed on helping us with some of the cost as we had just bought the car. Eventually, some welding work was required for the exhaust and the tires had to be replaced. After that, no more repairs were needed just general maintenance.
We sold it for about $4500 when I took a field position that included a vehicle benefit. It took us a while to decide if the Forester or the Corolla (described below) should go; at the end we kept the one with the lowest mileage.
#3: Toyota Corolla 2006
Year Purchased: 2014
Purchase Price & Mileage: $6800 / 58,xxx
Year Sold: 2019
Estimated Repair Costs: $600-750
Fun fact: Buying this car taught me that having patience is so worth it.
We had managed with only one car (Forester) for a few years but the winter months made it a bit of a pain (as using the motorcycle wasn’t very practical then). At this point, we were completely debt free and we had managed to save about $6k for a second vehicle.
I kept sending Mr. Fimigrant to check out cars I would find in Craigslist since we had about $2k saved but he refused to let me buy in a rush before the right vehicle came along. He convinced me that we should keep saving until we could buy something a bit better.
We were told often that what we had in cash would be a great down payment for a new vehicle and I was tempted to follow their advice ,ore than once. However, I knew how freeing it felt to not commit to a car note.
Eventually, a colleague put me in contact with a retired car salesmen that would hunt used vehicles in dealerships and auctions based on the buyer’s preference and charge a $300-500 fee after finalizing the transaction. My colleague was very frugal and told me that this guy had saved him thousands on his last two vehicle purchases.
Our budget was on the low end for what he was used to working with, but he decided to help us out. It took about 3 months for him to find what we were looking for which was a corolla or civic with less than 100,000 miles if possible. The vehicle he found was from an older gentleman who kept the car in a garage and only used it to go to the grocery store; he could no longer drive and was hoping to sell the car as soon as possible. We looked at it and decided to buy it on the spot; it was in excellent condition and the mileage was way lower than what we expected to find with our budget.
While we owned it, we had to replace the battery, tires, and exhaust. Aside from that, it drove well, and it felt so new even though it was over 10 years old.
We sold it this year to my mother in law for $3500 and it still had under 80,000 miles on it and looked as beautiful as the day we got it.
#4: Toyota Rav 4 2014
Year Purchased: 2019
Purchase Price & Mileage: $4800 / 120,xxx
Year Sold: Current vehicle
Estimated Repair Costs: none so far (as of Sept 2019)
Fun fact: This was my best negotiation up to date! I still can’t believe I pulled it off.
I drove this car brand new out of the dealership as it was my first company car. I kept up with all the maintenance and most of the mileage was done on highways so having the chance to buy it was ideal.
I knew our company had a program that allowed us to buy our vehicles at the end of the lease. However, a new merger led to corporate changes that affected the program. When I asked for a quote, the price I was offered was quite close to the sticker price at the dealership for the same vehicle.
I couldn’t shake the disappointment as I really wanted to buy this car. I re-read our company handbook and vehicle buying tables; if applicable, one of the price tables indicated that I could buy the car at 20% the original purchase price based on the age and mileage. However, the company reserved the right to change the policy at anytime and, as we got bigger, this benefit wasn’t what it used to be. I still figured something could be done and it seem like the right time to get politely annoying.
It helped that I have a good relationship with our HR team, and I kept insisting that letting me purchase the vehicle at the discounted rate would be a win-win situation. It took time but eventually they agreed (with the caveat that I had to pay taxes on the Kelly Black Book value).
Part of me still wonders if keeping the Corolla would have been a better idea as the insurance and repair costs were very low. However, the SUV is very comfortable and handles way better in the snow plus we can always sell it and make money on it if we decide to.
Buying vehicles with cash has been a great exercise of planning ahead, being patient, and learning how to negotiate. Finding the right car at the right price takes time but I will certainly recommend it if you want to eliminate debt and have more cash to fund other goals.
10 tips when buying used cars with cash
Here are a few suggestions that can help you have a successful car-buying experience with cash:
- Automate saving for your vehicle as if you had a car payment.
- Once you decide on your budget, do your research to determine what is a fair price to pay for a car that meets your needs.
- Be flexible! There are great deals that may not exactly fit you wants but that can provide everything you need.
- Trust your gut and if you feel something is off run the other direction
- Be patient. Having cash to purchase is very helpful when negotiating but you will always get the best deal when you aren’t the one desperate to close it.
- Ask for references and take your time to find a good mechanic, this is a MUST especially when buying used vehicles.
- Build a car repair fund to help you manage expenses; don’t wait until a repair is needed to find the cash.
- Let people know you are considering buying a car; people are willing to sell at a good price to skip the hassle of finding a buyer.
- Negotiate! If you are not comfortable with it, buying an used car is the perfect opportunity to learn and practice. Most people expect a buyer to negotiate so don’t assume you have to pay the advertised price.
- If you are really planning to buy a vehicle with cash keep yourself out of the dealership! They are experts on changing your mind and they will if you go check out the new vehicles.
Overall, I love that we decided to use cash for our cars, and at least by my standards, they have been awesome vehicles so far.
Do you buy your cars with cash too? Feel free to share any piece of advice in the comments 😊
