Right now, I have a $112/month car payment on our 1990 Nissan 240SX project car. While we could have made ourselves cash poor and bought her outright, I decided to go the financing route and use debt to build credit. (Knowing that, if anything ever happened, the loan could be killed immediately.) It’s been a huge joy to have the car, and I don’t regret the $200 a month I put towards her in the least. She’s also the third car in this family of car addicts.

@Gretchen (13): The Civic’s good for another ten years, easy. We sold my husband’s 1995 hatchback with just over 200k miles on her, and she’s still going. (He blew up the head gasket once, but that was him, not the car.)

Don’t feel bad about having cars well into the 200k mile range. Our 240SX has over 284k miles on her, original transmission and engine at that!

I now face a dilemma though. My car has 95,000 miles. My mechanic says it’ll last another 100,000 miles. Not having a payment for another 10 years sounds great but I am a little worried about the safety of driving it versus the newer models. As they say, driving is the most dangerous activity most of us undertake on a daily basis. So I may buy a new car in a year for the safety benefits and plan to own it 10 years just like this one.

I also set up funds for all my periodic bills – Add up your yearly expense for, say, insurance, divide by 12, and make an deposit to the fund each month. When you have to pay, you have the cash set aside.

We set aside funds each month for insurance, prescriptions (because we buy every 3 months), car fund, savings, dental care, medical copays, tax preparation, taxes, auto license and service, our water bill, again because it’s 3 months, and a bulk purchases fund for when we go to Costco every 2 months or so. Using Quicken, I don’t have to set up actual bank accounts. It is one of the best features of programs like this in my opinion.

We never, ever, pay interest on anything – it’s like having 10-20% more money! we only wish we had gotten into this mindset years sooner. When you have no payments, economic downturns don’t bother you so much.

I’ve started on my new car fund but I plan to drive my current paid off car until the wheels fall off.

My next car will be paid for in cash!! Cars seem to run so much better when there is no lien on it.

Cars are one of those expenses (like houses) where the expense is mostly built in as of the day of purchase. Once you sign the paperwork and drive off, there’s no longer much you can do about how much it costs to keep it from that time on.

Currently they are paying 2.75%. I wouldn’t put money in here that you need for day-to-day, but for a larger savings goal, I think it’s a great idea.