Thursday, January 22, 2009

Cash is King

Today we did something we've talked about for quite some time.

We bought a car with cash.

Real cash.

It's not new. Or ultra fancy.

But it's kind of fancy.

And it's ours with no car payment.

We were nervous about this you know. Paying with cash-real cash. Who really walks around with an envelope full of one-hundred dollar bills?

But Dave Ramsey promised that it would get us a better deal on a car.

When the bank teller counted the money back to us I had to hold back laughter. It just seemed so crazy. We were entirely terrible at acting like nothing was up upon exiting the bank- suddenly very suspicious of our surroundings. Dashing Boy really wanted to come home and throw the money up in the air like in the movies. But I said no. What if we lost one? That would not be good.

Let me just tell you that car dealerships are practically begging people to come buy new cars right now. $99 down payment!!! $159 monthly payments!!! Think you can't afford the car you dream of? THINK AGAIN!!!

It was slightly tempting but ever so out of reach to get the new Honda Fit that we both love.

But it was more tempting to put our budgeting skills (and hard earned savings) to use and buy a car that we can afford.

We did tons of research and actually ended up going for a car that was listed out of our price range-oh yes it's true. But don't be alarmed, because we purchased it in our price range.

First, we got the Kelly Blue Book quote for the car we were interested in as well as an appraisal from Edmunds for a second opinion. The price we got back on both searches was under the asking price. So we called the seller and asked them if there was any reason the car was listed above blue book. "My wife actually said she listed it high," he said. This was our first clue that these people might be willing to work with us.

Second, we checked out the car and took it on a test drive. We also looked at quite a few other cars similar to this one (my oh my, there are some bad and smelly cars out there!) So we knew what a good car would look like.

Third, Dashing Boy and I are lacking in the car mechanic knowledge area. So we arranged to take the car to a mechanic for a pre-purchase evaluation. We also reviewed the Consumer Reports guides: Inspecting a Used Car and How to Spot a Lemon. These were very helpful (and well worth the $25 yearly membership fee for Consumer Reports). In addition we got a carfax report on the car to make sure the history was clean.

Fourth, we sat in the car shop and read exciting magazines while we waited for the verdict. (see above picture.)

Fifth, We got a positive verdict from the mechanic, so we decided what price we thought the car was worth and put the appropriate amount of cash (minus a bit for bargaining room) in an envelope.

Finally, it was deal time. We were nervous. We sat down with the sellers and gave our first offer.

And you know what?

They took it! "That sounds very fair," they said. And it was.

Would we have payed less if we started lower? perhaps. But it was a deal I felt good about.

Unfortunately, It was such a smooth transaction that the cash didn't even come into play. But it was still kinda fun to have it- and it definitely made us stick within our price-range.

We filled out the papers and then I counted the cash out bill by bill.

"Did you want to throw the money up in the air when you got it from the bank?" the wife asked.

"Yes. Yes we did."

I hope they do. Someone should. It's pretty dang exciting.

And so is buying a car for cash. Full down payment!!! No monthly payments!!! Think you can't afford to buy a good used car for cash? THINK AGAIN!!!


Heidi said...

So? What type of car is it?

Mrs. Olsen said...

Exhilerating! We finally paid off our cars last year and it felt amazing. I agree with Heidi...what kind of car is it?

MEvans said...

Congratulations!! We are running "the jet wing" into the ground until we have some more cash saved to do the same thing. I hope we have the same self control you guys do!
I drove past your old green house the other day and it made me sad to think how long it's been since we've had a pasta night together!

Jeremy and Susie said...

You guys sound like Dave Ramsey fans! ;)