Many people shop for cars with one of their main goals being to find a car that has a high resale value. There is the Kelly Blue book site to give you a good idea of what you should expect to get for your car, based on make, model, and condition, when you try to sell it or trade it in. While I think this is a good thing to take into consideration when researching a car sale, I don’t believe it should be a high priority for the frugal and debt-conscious.

Do Your Homework

I absolutely believe in doing your homework before even STEPPING on a dealer’s lot or calling someone about a private sale. I just think the order of consideration is a bit different for those that want to get and stay out of debt. My own priorities come down to;

1. Dependability – I mainly buy a car to keep, and to run a LONG time, so having a dependable auto is my first decision criteria.
2. Gas Efficient – Again, because I’m going to keep it long, the amount of fuel it uses becomes a factor. I’m not sold on hybrids or electrics yet because of the price break point, but with them coming down in price, I see one in my (near) future.
3. Price – This is third on the list because I’m willing to pay a little more for a car that will last longer and use less fuel. Be CAREFUL of the sales people that try to talk to you about the "payment you can afford!!" Save up and either pay for it entirely in cash (ideal) or get a pre-approved auto loan through your local bank. The option of LAST resort is to finance it at the dealership. Rates are higher and there’s a lot of ‘hard-sell’ for extras.
4. Re-Sale Value – As I said, I keep it for the long run. The last two trade-ins I did, I had to have them towed to the dealership, so I wasn’t too concerned about a good trade-in.

Buy to Keep, Not to Re-sell

By keeping in mind that you want to keep the car, you can also keep in mind that you want to PAY THE CAR OFF SOON. Not having any car payment(s) is a feeling only second to the not having a mortgage payment. The feel of driving around in a car that you don’t own is entirely different than driving around in one you do. Don’t believe me?? Try it out and see.

One of the biggest recurring bills most people get is the car payment. It runs anywhere from $200-600+ per month and can last for up to six years. Getting rid of that bill can accelerate your financial plans considerably.

Run it Into the Ground

Once you get your vehicle, then you get to play "How Long can I Get it to Last?" The idea is to keep the vehicle in as good a shape possible, without having to spend more than you would have in (regular) car payments.

If you normally spend on average $100/month on repairs and maintenance, you’re miles ahead (pun intended) of the person paying a $500/month car payment AND $50/month maintenance. When the ratio starts to change (say, after the first transmission you have to replace) only THEN should you consider putting ole’ Betsy out to pasture.

Buy the Bumpersticker – "My Other Car’s Paid For"

The car companies market heavily to try to get consumers in new cars every few years, so they can sell more cars, not necessarily because the existing cars have problems. They appeal to the ’status-conscious’ that needs a new car to ‘Keep-Up-with-the-Jones’. That’s a lot of money for a one-time "Gee Whiz, that’s a cool car" from your friends. You’re going to be paying on that car years after everyone stops thinking it’s cool.

Remember, the new status symbols are the paid-off bills. Drive your way to a better financial future.