'Underwater' car trade-ins are at a 4-year high: What that means when buying a new vehicle

[MineralMan]

9. Well, maybe not.

What I refuse to do is pay interest on a loan for a car. If I did that, I'd be paying far more than even the sticker price by the time the loan is paid off. Why would I do that? I have always bought cars for cash. I started off buying cars for $100 in the 1960s. I bought them, cleaned them up nicely, drove them, and then sold them for $3-400. Over time, I paid more for newer cars, funded in part by all the older cars I had purchased and then later sold for more than I paid.

In 2012, I bought my very first brand new car. It was, at that time, the least expensive new car you could buy. A base trim KIA Soul. I paid cash for it. I never made any payments. In 2019, I replaced it with a 2020 KIA Soul. At that time, I paid about the same as I did for the 2013 one I bought in 2012. Again, a base trim model. Again, I paid cash. I still have it. I also bought a 2021 Chevy Trax in 2021, the cheapest AWD compact SUV on the market at that time. I still have that car, as well, so my wife and I each have a good car to drive. Paid cash for the Trax, too.

No interest on a depreciating vehicle. I don't pay interest on depreciating things. I pay cash or don't buy the thing. I bought used cars until I could buy new ones. But I refuse to pay interest on a car which loses value every year. I have had mortgages on three houses, but paid those off as well as soon as possible. The last house I bought, though, I paid for in full. No more mortgages. That has always been my goal. I didn't reach it until I was 75 years old, but I did get there.

If you can avoid paying interest on things you own, you will stay ahead. If not, you will always be falling behind eventually.