Splurging for Bells and Whistles on a Car

The following is a blog swap post from Kay Lynn at Bucksome Boomer, where she writes about money and life on the way to retirement. Check out the post I wrote: I Spent How Much?! My Birthday Trip to the Bahamas over at her site today! Entrepreneur Fridays will resume next week.

A few years ago we needed to replace the oldest vehicle and decided it was time to buy our next new car. The last car we had purchased was pretty basic.

I wanted a minivan to cart the kids, their friends and surfboards around in. Who knew that gas gauge lights were not included in the base model?

After years of putting the kids’ needs first, I was going to spend some of my hard-earned money on what I wanted.

Dream Car Specifications

My list of must haves included features many of may take for granted such as automatic locks, air conditioning and that gas gauge. But it also included two things I’d wanted for a long time which were a sunroof and leather seats.

I also was ready to downsize vehicle size. No more minivans, SUVs or station wagons now that the kids were grown up.

Paying the Price

We compared all the brands and test drove several. My husband let me make the decision since it would be “my” car and then we did a pretty good job negotiating.

But suddenly I was $25,000 more in debt on top of increasing our insurance premiums and annual licensing fees. I couldn’t see stretching out payments too many years so asked for higher payments over a shorter time period. It might have decreased the dollars in interest paid over the life of the loan, but it left us with a lot less pocket money.

I could never get the credit card balances down to zero despite having a good-paying income and lower than average house payments.

Lessons Learned

A couple of years ago I had enough with debt and living paycheck to paycheck. Attending a Dave Ramsey course at church let me see I never have to have car payments again — once I got the current car loan paid off.

It became one of the priorities in the debt snowball plan. I added any extra dollars that came around to the car payment and it was paid off in December 2009 which was six months ahead of schedule.

Once I get rid of the remaining debt within the next year, I’ll begin saving money for my next new car in a car replacement fund. Oh and it will be new to me; not necessarily brand new.

I don’t regret splurging on leather seats and the sunroof, but I do wish they didn’t come with a loan.