Owning the same car for 12 years has saved me thousands

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I didn’t always plan to keep my car this long. 

As excited as I was to go to the dealer nearly 12 years ago and buy the silver Acura I adored, I never thought we would have this kind of longevity. But keeping my car — the first I ever bought — has been one of the best financial decisions I’ve made. 

We may think a car payment is a fact of life. A thing we have to have, especially if we live in an area without great transportation options. In fact, transportation is the second-leading expense for American households, behind only housing, according to a 2019 report from the US PIRG Education Fund and Frontier Group. “More Americans carry auto debt, and they owe more on their loans, than ever before,” the report notes. 

The average auto loan amount is also at a record high, according to a 2019 report from Experian, with the average loan amount for a new car exceeding $32,000. Meanwhile, the average monthly payment is $550 for new cars and $392 for used cars. 

What if we could have more freedom by making different choices? Think about all of the other things we could be doing with that money.

When I made my big purchase, I chose a make and model that I loved, and that also had good ratings. I ended up choosing a car that had briefly been a loaner to avoid a “new car” sticker price; I also secured a low interest rate and put down about $9,000 (more than I needed to).

But I still had a note. For five years. 

In hindsight, that luxurious car, with its supple leather seats and moonroof that flipped the breeze through my hair, was technically too much for my magazine editor salary back then. But I was comfortable with the payments. So it worked. 

Back to the story. When I made my final payment of about $275, I was happy. As time ticked by, I liked having the extra money each month. And my insurance payments were reduced, too. 

Nearly seven years after paying off my purchase, keeping that car — and having it regularly maintained by the dealer — has saved me thousands of dollars in new car loans, interest, and insurance. 

Here’s why I don’t want a new note any time soon. 

I can pad my savings and investment accounts

Instead of paying a small fortune to a car financier, I’ve put money into my emergency fund. And into after-tax equities that can grow, instead of depreciate, over time. And into my 401(k), when I had a staff job. Even when I had to pay a maintenance bill of more than $3,000 — justifiable around the 10-year mark — it was still cheaper than starting all over with a new car loan and higher-priced insurance. 

I can splurge and travel guilt-free

I’ve written about my go-to savings strategy and confess: It’s helped by the fact that I don’t need to pay for a new car. So instead of staying home and managing payments, I’ve gone back and forth to Europe, and flown to Asia, without stressing over the cost. When we’re free to explore the world again, I’ll have the funds to do it. 

I’m free to make creative life choices

This is a sweet takeaway. Being free of car debt has been one reason why I haven’t felt financially tied down. And one reason why I’ve been able to make independent career choices and take risks that would have otherwise been difficult. 

I’m content

This matters. While I’ve been no stranger to ridesharing and Metro, I still appreciate my driver’s seat. And though new cars can be cool, and their tech can be quite nice, I don’t actually need one. Especially not now, when I’m driving even less during the pandemic. I don’t need to impress anyone but myself. And I appreciate what I have. 

These days, my car remains in great shape and fits my life. If I want a glimpse into my future, I can look at my mother: a former nonprofit executive who retired early and is still driving her Accord … from the late ’90s. While I’m not sure I’ll make it to two decades, I’ll keep my silver beauty as long as I can. 

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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