Rules for Buying a Car
First determine if you're broke. We define "broke" as having a negative net worth and not having anything saved for retirement. If you are broke, follow the rules in Phase 1. If you're not broke follow the rules in Phase 2.
Explore alternative options.
Have a "Point A to Point B" mindset.
Don't buy for features.
Buy a vehicle between $2,000 - $7,500.
Stick with a reliable brand.
Get an inspection before buying.
Pay as much as you can in cash.
Remember that Phase 1 is temporary.
Take pride in your vehicle.
Have a net worth mindset.
Spend no more than 10% - 20% of your annual income.
Plan on driving your car for at least 10 years.
Take care of your vehicle.
Be cautious about splurging.
More money (spent on a vehicle), more (expensive) problems.
Don't count on luck to bail you out.
Shop 3 year old cars.
Evaluate transaction costs.