If you’re new college graduate, getting your finances squared away is a priority. I want to share a tip on how you can reach your financial goals quickly. I’m suggesting that you avoid having a car payment as long as you can.

It’s not feasible for some situations, but it can make a huge difference with one adjustment.

Advantages of No Car Payments

No car payments has freed up our monthly budget a bit and we’ve redirected the funds to other financial goals. We have fortunately had a decent track record with car repairs. Even when we had to replace the clutch and had electrical work done for my husband’s old car, the monthly average of owning the car was about $150/month, much less than the average of car payment of $479 /month.

The extra money can be reallocated to other goals:

• paying off credit card debt
• building an emergency fund
• investing more in your 401(k) and/or IRA
• saving for a vacation
• house down payment

You can also use the money to bump up your lifestyle. You’ll have a bit more to eat out for example or go on some more mini-vacations. The flexibility of having that money available is a huge advantage.

“I Don’t Want a Clunker!”

I completely understand that people don’t want to buy cash for a car because they worry about getting a beater or worse, a lemon. It is possible to find a solid used car for you. It pays to do your homework when you’re hunting for your car.

• Create a list of your must-haves and wants for the car
• Decide on your budget for the car
• Use Consumer Reports and similar sites to find a list of vehicles that are on your list
• Check Kelley Blue Book to get an idea of the cars you can afford

When you buy from a private seller, you should be careful to ask questions about their history with the car and have them provide paperwork. Anyone can say they’ve maintained the car, but having the documentation shows that they have actually done it.

Check with CarFax for the vehicle’s VIN for when you find a car that you like. Take the car to your regular mechanic to have it thoroughly checked.

Save for the Next Car

While you’re saving on car payments, don’t forget to transfer some of it into savings for your next vehicle. Depending on how long your current vehicle lasts, you may have a sizeable car fund in place. If you’re interested in seeing how you can upgrade your cars with cash, Dave Ramsey has a video explaining how it works in detail.

Your Thoughts

Buying a car with cash isn’t an option for some, but I think it’s something to seriously consider as you start off in your career. I’d like to hear your thoughts on it. Did you pay cash for your car? What are the pros and cons of it?

I rarely admit it. In fact, I try to avoid admitting it most of the time. But today, I have to stand up, look straight in the mirror and tell myself:”I am the perfect example of a procrastinator”.

I know I am good at a lot of things. One of them is that I am very effective in everything I do. The downside of being so productive is that I have the tendency to procrastinate. For things I don’t like, I always postpone them until later on. And this is what this article is all about.

A month ago, I fell in love

I was looking for a second car. Since I moved one hour further away from work, I needed to get a sound, reliable second car to drive to work each morning. On the other hand, I was also looking for a car that would make me feel good about the additional driving of such a long distance everyday. This is why I opted for a Mazda RX-8 (okay… it’s a 2004 but it still rocks!).

So, I started to shop around and found this great deal: The car was in great condition (I bought it in May and was inspected in February 2010), the guy was trustable (he was the VP of a real estate firm) and he gave me a second set of wheels with brand new winter tires on it. Since I really wanted the car, I decided to buy it right after a test drive with my father. I must say that the car drive smooth and life was perfect back then.

2 weeks ago, I was disappointed

2 weeks after my purchase, driving this car was still awesome but the front brake pads were finished and I scrapped the 2 discs. Along with an oil change, regular maintenance, I splurged another $1,000 during thes weekend to bring my car back  to “new”.

I was disappointed in myself as I should have asked for another inspectionby an independent mechanic on the car just before I bought it. I would have been warned that the brakes were finished and I could have:

#1 bargained a lower price for the car

#2 had the brake pads replaced before I had to pay for brand new disks!

This was, again, the price I had to pay for my procrastination. I knew I should have had an inspection but I thought I would wait until my first oil change to have my car checked over (once it is obviously too late) and have the “little things” fixed at the same time.

This morning; I am pretty darn angry

Once again, I let the procrastinator in me take control of my actions (or should I say lack thereof?). 2 days ago, the check engine light went on but since my car was running smoothly, I didn’t call the garage right away and thought it could wait until next week (since I had more time to go to the garage and take care of it). So I drove my car with the light on for 2 days without any problems. In fact, I didn’t notice anything different and I was still very happy to drive it.

This morning, the darn car didn’t start! So I had to take my main car to go to work, leaving my wife with a broken (but nice looking) sports car in the driveway.

So now I am left with my bad habits and a broken car… How much do you think procrastination will cost me in this situation?

I think I should add “procrastination” to my monthly expenses!

Image source: Mrak75

This weekend wasn’t good for me. My beloved VW Jetta had to get towed Sunday and I’m waiting to see what the mechanic’s diagnosis is for it. Yesterday he said he just got it and from first check, it appears as if my Jetta spat out a spark plug. if that was the case, it’s an easy (and non-costly) fix.

Unfortunately it can be worse and he’ll let me today what he finds out. My VW Jetta has been pretty well and I hope it stays that way for a few more years. I’d hate to spend a ton of money on the car.

We’ve been trying to take care of our vehicles to avoid a car payment. We’d like to pay cash for our next car, so we look for ways to cut done on car costs as much as possible without taking up too much of our time.

Keeping Your Car in Shape

The best advice I received on keeping car expenses low is be vigilant about maintaining them. It does involve spending money, but it’s usually much, much cheaper than spending on a huge repair due to negligence.

Staying on Top of Your Gasoline Bills

If you want to cut down on your gasoline bills, you have to become a more aware driver. Keep mind some of the following tips and you may see some savings at the pump.

• Use a gasoline spreadsheet. My husband has one he’s created. He keeps his receipts and enters the information in batches.
• Be consistent with your driving. Switching back and forth between the brake and accelerator constantly eats up gas more than if you maintained your speed.
• Turn off your car. If you’re picking up someone and it’ll be longer than a minute, go ahead and turn off the car.

It’s not rocket science, but these tips have helped a bit. We also try to get our gasoline at Costco to save about 7-10 cents a gallon compared to surround gas stations.

Your Thoughts on Keeping Your Car Running

What’s your maintenance schedule for your car? How have you saved money with your car(s)?

If you’ve been watching the news, you may have been confused about what is happening with the Car Allowance Rebate System. What is the Cash for Clunkers program about? The program is designed to stimulate car purchases from participating dealers and remove gas guzzlers off the roads.

Has Cash for Clunkers been popular? Apparently so. While the bill has been planned to run until November 1, 2009 or until money runs out, the allotment has almost been spent!

Chrysler dealers have had their inventories reduced due to the program’s popularity. 

Cash for Clunkers Ran Out of Money

Last week, it was reported that the Car Allowance Rebate System, better known as Cash for Clunkers, was running out of the billion dollars allocated to it.

Double check to see if your clunker qualifies for the CARS program.

Wall Street Journal made this report Saturday:

Even Friday, officials weren’t able to calculate how much money remained in the clunkers’ kitty, other than to say that the National Highway Traffic Safety Administration, which handles the rebates, has processed $250 million in vouchers. 

Legislators are Trying to Continue to Fund Cash For Clunkers

I’m looking at the news today and I saw that the House has passed the additional funding and Senate is working on the bill this week.

 George Stephanopoulos, a politcal analyst, made the prediction that the  additional funding bill will pass. If you decide to make a purchase on a new car with the program, the cash for clunkers rebate will be honored through  August, 4. 

Is this Program for You?

We’re personally going to pass on the program for a couple of reasons. First off, we are saving up to buy a home soon so we would not like to divert funds from that goal.

I also looked up our vehicles to see if they qualify as clunkers and as expected, they do not. We have a 1994 Acura Intregra and a 200o VW Jetta and both get decent miles per gallon. 

If you ran the numbers for yourself and were already considering getting a car, then you should definately try to take advantage of the program. Just don’t buy a new car and end up getting a large car loan because of the program.

Your Take

Do you think this program is beneficial in the short or long run? Will you pass on the program or are you taking advantage of it?

Related Blogs

• Related Blogs on What’s Happening with Cash for Clunkers Program?

I was watching Good Morning America today and noticed something interesting mentioned. Last week the EPA changed the ratings on  a hundred models or so of cars, some with higher mileage reported and some with lower mileage. They added 86 models to the list that can now qualify and updated 76 models that no longer do.

10 of the Newly Cash for Clunkers Qualified Cars

• 1987 Buick Regal
• 1987 Cadillac Brougham
• 1987 Chevrolet Caprice
• 1987 Chevrolet G10/20 Van 2WD
• 1987 Chevrolet R10 Pickup 2WD
• 1987 Chevrolet T10 Blazer 4WD
• 1987 Chevrolet T10 Pickup 4WD
• 1987 GMC G15/25 Vandura 2WD
• 1987 GMC R15 Pickup 2WD
• 1987 GMC T15 Jimmy 4WD

Source: USA Today

See the rest of the list here.

10 of the Newly Cash for Clunkers Ineligible Cars

• 1987 Alfa Romeo GTV
• 1987 Alfa Romeo Milano
• 1987 BMW 5 Series
• 1987 Chevrolet S10 Blazer 2WD
• 1987 Dodge Caravan/Grand Caravan/Ram Van 2WD
• 1987 Dodge Shadow
• 1987 Ford Aerostar Van
• 1987 Ford LTD Crown Victoria
• 1987 Ford LTD Crown Victoria Wagon
• 1987 GMC S15 Jimmy 2WD

Source: USA Today

See the rest of the list here.

Here’s the government’s complete  list to see if your clunker still qualifies. As you remember from the post last week on the Cash for Clunkers and common questions, there are eligibility requirements for your car to be considered a clunker.

You need to check to make sure your car meets the guidelines.

• Your vehicle must be less than 25 years old on the trade-in date
• Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements)
• Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in

If your clunker was close to the 18 MPG threshold, you may have been affected by the EPA updates. Double check  your car’s mileage numbers with the EPA. Your car may now qualify even though you didn’t before, or it may no longer qualify at all. If you have more questions please check out the government’s website.

There are over 16,000 dealerships participating as of today. Please be aware of any scams that involve your social security number. The Cash for Clunkers/ CAR Allowance Rebate System does not require your social security number. Call to report fraud or a scam at 1-800-424-9071. It’s a toll-free 24-hour hotline.

Photo Credt: jamcp

Related Blogs

• Related Blogs on Check to See if Your Car is Still a Clunker

The best way to save money is to prepare for emergencies. A couple of years ago, we went down to vist my mom and the tire went out. I had a spare tire to put on, but it was a little flat. We had to drive some miles before we hit a gas station that had an air pump. Now I try to check on the spare tire to make sure it is properly inflated.

Being prepared is usually a very good thing.I decided to include a list of things you might need for your car.

• First aid kit (A good one can be found for $10)
• Flashlight (Wal-Mart has a large one for only $3)
•  Fix-a-flat
• Jumper cables (this has helped me numerous times)
• Rags (old T-shirts, etc.)
•  Road flares

If I forgotten something, please add it with a comment.