Never Pay For A Car Again (Car Hacking Strategy) - Fire Movement

The worst part about buying a used car is that you have to spend money on it. If you're paying cash for that car then that means you'll need to save money every single month.

I don't like this and I'm sick of having to set money aside every single month so that I can responsibly buy my next car. I figured there has to be a better way to buy a car where I come out winning in the end.

That's when I came up with what I like to call Car Hacking. I especially like this method for anyone in the FIRE movement. If you're working towards Financial Independence, Early Retirement, Regular Retirement, or just don't want to set money aside every month then this is for you.

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Disclaimer: This video is for entertainment purposes only. Everyone's situation is different so do your own research before making any decisions with your money. If you need help then contact a Certified Financial Fiduciary before trying anything that is mentioned in this video. I prefer a Fiduciary financial advisor that charges an hourly fee as opposed to an ongoing fee based on a % of your portfolio. Always remember that incentives determine the type of advice they give you so one that charges an hourly fee is less likely to be problematic.

#freecars #carbuying #financialindependence

[JarradMorrow]

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[dansadventures]

The math is flawed due to these reasons:
1) You're not taking inflation into account. In 8 years it will cost about $11, 000 (or more) to purchase what you can purchase today with $9000
2) Although index funds are great for long term investments, they cannot be counted on if you need the cash at a particular time (eg. exactly in 8 years). If 8 years happens to be just after a huge recession then you could be down 30% to 50% and that's the worst time to pull your money out. Your plan falls apart if you happen to hit a recession.
3) A $9000 used car is not worth $2000 after 8 years. If you purchased it when it was 5 years old then it might not even survive another 8 years.
4) You're not taking into account the cost of maintaining a car with high mileage (costs go up with age). This cost should be included in your calculation (and also account for inflation over time)
5) Since you'll always be driving old cars, you should expect at least one of them to run into major problems and need to be replaced after only a few years.

Overall, investing is great for financial freedom but you need to be realistic about costs, market fluctuations, and expect some surprises.

[medallonsin]

Excellent video as always, Jarrad. Thanks for the info and will definitely implement it. I also agree that leasing or getting a loan for a car is one of the worst financial mistakes one can ever make, just for the depreciation factor. And if what you're looking for is a vehicle to get you from point A to point B, a used car using this method is a great strategy. Awesome channel, and Instagram content too!

[davitodd]

This is what we are looking at doing. Thanks for sharing the details. We have managed to stay out of consumer debt for 13 years.

[JuanJimenez-vjul]

Really like this strategy! Thanks for making this video

[trinialday]

Great video! Thanks for sharing that tip.

[VixCrush]

The thing I like most about your video here is that it convinces people not to waste their money on a depreciating asset. The key to everything is that people buy cheap used cars and don't waste their money on new cars. That tip alone is more important than the investing piece. I love having a cheap other car because I can smile when I compare myself to people with big car payments every month.

[ace-golf]

This is what schools need to start teaching kids, this should become common sense for people

[danielloyer]

Great video!


I don't think you have to worry about getting too old to drive, by the time you are 80+ the car will drive itself!

[rereAL]

This is a great idea! You just got yourself a new subscriber!

[sha_la]

Hey Jarrad! Great video and advice. AWESOME job on getting a handle on life. I meet with a realtor in about two weeks. I'm looking to purchase a duplex, quadplex or bigger. I really want rental property.

[jongoldenstein]

I can fine tune this even more. Don’t buy a car when the market is down. Instead, repair the one you have and wait for the market to recover before buying your next car.

[ceciliaruns]

Great idea! I have both M1 and Vanguard and will definitely consider this!

[DoctorMcFarlandStudios]

This sounds like a fine way of getting money for pretty much anything. The key is to think long term which is what you are showing the power of. For a TAX FREE method I still suggest the Infinite banking concept which earns 4% compound interest every year.

[johnyramos]

I Loved this strategy but I had to tweak it a little to make it work for me as can't Imagine myself owning a car for 8 years, I would save 35k to buy a 7k car and the remaining 28k invested at 7% div would grow just over 7k within 5 years which Is more acceptable than 8 year Imo.👍

[valerieewing]

This sounds like a pretty brilliant way to keep up on buying cars. I'm going to have to get started because my car is closing in on 250k miles. Still running good for a Ford Focus though.

[abyjohnkutty]

This is exactly what I’m doing. 😀
Started 18 months back.

[phazon]

I don't like the fact that I'd have to wait until I'm 70 to be able to afford a brand new Subaru WRX, for example. By that time, I'll still be able to drive just fine but I won't really be able to enjoy it as I would right now. In terms of new vs. used, I've got a family friend that owns a body shop, and his advice has always been to buy used (of course, he can tell a lemon from a good deal, but I couldn't, although I could always ask him though). The advantage I see with buying new is, more than likely, you're not going to be out-of-pocket on major repairs, it's a brand new car, and it should only require normal upkeep / maintenance (oil changes, brakes, tires, wiper blades, etc). I would take into account the maintenance savings of a new car vs. the ongoing maintenance expenses of a used car. As far as getting the most bang for your buck: toyota, honda, and subaru, in that order, since they are built to last (except the Subaru WRX which has a Porsche engine, and if that goes out for any reason, kiss your savings goodbye, haha). Toyota and Honda vehicles are made to last, so they also depreciate less than other cars. I knew somebody that bought a used, very beat up Honda Civic for $1, 200, a year and a half later turned around and sold it for $1, 800 in less than 12 hours from posting it for sale on craigslist. Overall, great video and good tactic.

[ballerbss]

Love this idea. I do have a question: how do you differentiate the amount in the low cost index fund within your brokerage account dedicated to the car vs other?

[mantiscity]

The tile says, never pay for a car again. Once I start saving money, I’m basically paying for it