My Car History

I purchased my first car in 2003. It was a 2001 Kia Sephia. I remember paying $2500 cash, and it only had about 45k miles. The day that I purchased it I think my sister drove it home. lol I was around 20 y/o, and brand new to Houston. The freeways scared the living daylights out of me, and I wasn't familiar with driving on the right side of the road.

This car lasted me 5 years. It only started giving me problems towards the end because I was irresponsible, and didn't keep up with the regular maintenance. This was five long years of NO CAR NOTE!!!!

Okay..so with the death of my Kia looming in the horizon, I decided that I was going to upgrade. Why not, right? It was 5 years later. I had graduated from college with my undergraduate degree, and making decent money. In order to financially prepare myself for a new car, I decided to get a part-time job to pay off all my debt (excluding student loans of course). I posted an ad for my Kia on Craigslist, and was able to sell it for $1400. Not bad at all!

Since my sister was having such great success with leasing vehicles, I decided to go that route. (Remember I had never had a car note before) I started looking at all my options, and was really impressed with the 3 series BMW. I think the ultimate maintenance package sealed the deal for me.

A few people shared their horror stories with leasing. I was of the mindset that I wouldn't have to worry about paying for excess wear and tear and excess mileage because I would lease another BMW when my lease ended.

After paying off my debt and feeling comfortable enough with my lease payments, I decided on a car. I leased a 2007 328i BMW for 3 years. My monthly payments were 499.99. It wasn't bad in the beginning at all! I absolutely loved this car. It was such a smooth ride, and I loved the fact that I didn't have to pay to maintain it. Even after carefully researching this decision for a few months, there were some things that I didn't take into consideration. 1) The price of gas to fill this car was much different than my Kia. I think I could fill the Kia for $15-20. With my BMW, it took $40 to fill the tank. Another thing is that I only paid $55 liability insurance with my Kia. With my BMW, I had to pay more for higher coverage, so I ended up paying $135.

As the years went on, my spending increased, my mortgage ballooned, and things were getting a bit difficult. When I received a letter from BMW informing me of my lease end options, I made a difficult decision. I first started thinking that I could finance the BMW because I liked it so much. Guess what? Although I paid 499.99 for 3 years, I still had a $26k residual on the car. That really infuriated me! My credit union quoted me a payment of $585 for 5 years to finance it. I decided right away that I would turn in the BMW, and get something less expensive.

My thought process from there went in extreme directions. lol I told a really good friend of mine that I wanted to get something that I could pay for in cash, preferably about $5,000. After I started thinking about it and visiting dealerships, I was pretty adamant about getting a used 2006 Mercedes CLK500. It was about 23k. My payments would have been around $450. lol At that point, I clearly wasn't thinking logically. I couldn't see myself stepping down from my BMW to a hooptie. (yes, I know that's silly) As much as I searched, I couldn't find the car that I wanted. Somehow I ended up at an exotic car warehouse with a friend one night. I don't even know why the heck I was there. (Remember, I first started off wanting a hooptie).

On my way home that night, I started talking to another friend that talked some sense into me. He said, "why not pay cash for something now? Apply the money that you would have paid for your car note towards paying off your debt. If you did that for 2 years and saved some money, you'll be in a better position to get the car you really want. Why would you go and get another car note when you have debt you need to pay off?" This really resonated with me.

From that point onwards, I decided that I would get a used car for about $3000. This proved to be a very difficult task, but I did find something. I purchased a 2001 Volvo S40 at a used car place. It only had $56,000 miles! This car cost me a little more than I wanted to pay, but the owner worked with me. He wanted $4600, but I talked him down to $3,800. I paid $2,500 down, and set up a plan to pay something towards the balance monthly, and this plan didn't include interest.