I love nice cars and I've had lots of them. I usually buy cars that are 1-2 years old with low miles and I always wait to get the very best deal I can. Patience is always rewarded. Reliable and Economical are the two key factors. Buying new is a foolish waste of money. I financed my first car and have paid cash for every one since (over 50 vehicles). To me the total cost of ownership is what you should focus on and that includes depreciation. I'm shocked at how much some people lose just on their cars during their lifetime. There's a better way.

Here's how I do it...

I take a policy loan from my life insurance and pay cash for the car. The last one I bought was for $35k. Each year i pay an extra $5k on my annual premium (I can pay any amount I want). I usually keep the cars for 3-4 years. when i sell the used car I deposit the entire selling price back into my policy. It always pays off the loan and adds a little extra which goes towards increasing the cash value and death benefit of the policy. The net cost to me of the money is right around 1%. When it's time to buy another car, I simply repeat the process.

By using a policy loan to pay for my car, I'm not reducing the cash value that is in the policy that they use to determine interest and dividends. The policy loan is like getting to use the same money for two things, buy a car and earn interest to build my retirement account. It's my one chance to double dip. The death benefit of the policy is the collateral for the loan, so if I don't pay it off, any balance outstanding would be deducted from the amount paid to my beneficiary when I die.

I figure my retirement account grows by $10-15k for each car I buy over my lifetime. When you consider the compounding on that money, it adds up fast.

Sucks to lose money on cars. I'd rather keep it for my retirement. It may take a few years to build up enough cash in the policy to do this on a car, but if you pay cash for cars there are ways to accelerate it. That's what I did. Works great for me.

I use the same strategy to pay for my kids college tuition. Started paying into the policies when they were in their early teens and there's enough there to cover tuition to BYU when they graduate. I'm on my third kid and it's worked great. If they get scholarships or financial aid, it's that much less I have to take out to pay for their school. I plan to turn over the policy to them when they graduate. If they pay back the loans I took out to pay their tuition and keep making the annual payment (just like a retirement account contribution) they will have a nice retirement account thanks to dad, even if they don't do anything else. Plus they can borrow against it during their life for major purchases