RID YOURSELF OF NEW CAR PAYMENTS FOREVER

Enlarge Image Image Gallery Left: 1990's 4x4 Extracab by Toyota Middle: Dodge's 1991 Minivan, Right: A 1990 Toyota Corola [LEFT AND RIGHT: COURTESY OF TOYOTA; MIDDLE: COURTESY OF CHRYSLER]

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YOUR MONEY'S WORTH

How to save $5,000 per year on your transportation expenses... and love doing it.

by Roy Green

Maya is the word for illusion in the Far East. In the West it is called Consumerism. Back when my wife and I were making decent salaries, it seemed like we were making more than enough money on paper, but had little to show for it at the end of the month. We simply spent too much, like the good consumers we were. I felt as if I was the recipient of a David Copperfield disappearing trick. "Where did it all go?" I continually wondered. I never wanted something for nothing, but was gradually becoming convinced that I was getting nothing for something.

So I did some very thoughtful analysis of my financial situation. I discovered that a major black hole in my wallet was the money I poured into automobiles-money that I would never recover.

I discovered, by default, that 90 percent of the money I spent on cars evaporated in a haze of depreciation and interest expenses. I paid about $250 per month for each of our two cars, plus comprehensive insurance payments of about $100 a month, costing a total of $7,200 per year. I had to earn over $10,000 (before taxes) in salary to cover those expenses. The AAA statistics indicate that the average person pays $5,916 in car ownership cost per year, so I was getting a good deal, comparatively. That cheered me up about as much as when the doctor told me I didn't have a fatal disease; I was just gradually wearing out.

Three years after my wife bought her car, we were tired of it and ready to sell. The dealers and banker all let me know that I could sell it for just about what we owed on it. In other words, we were paying for merely the pleasure of driving, not building any equity in the car at all. If I could just manage to buy two $3,000 cars that would last more than a year, I would begin to come out ahead. That is what I was determined to do.

It's all too easy to suggest that buying used is always the answer, and it was more than a little difficult for me for three reasons: a) my ego, b) finding a good used car seemed impossible, and c) I was afraid the repairs would offset the monthly payments savings. So buying the right car was essential to make the plan work. High maintenance costs would eat up any savings in short order, so I did a good deal of research. I read Consumer Reports, spoke with mechanics, and read a lot of classified ads over the course of a few years. I suggest you do the same to verify my

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