Buying a brand new 2010 Chevrolet Silverado was the best and worst financial decision my wife and I ever made. I’d just received orders for Germany at the time, and we were preparing for the move. The Army would pay to ship one vehicle, but we had two.
I had an F-150 (her name was Marleiya) and my wife had her Jeep Compass. We both loved the vehicles we had, but we compromised on a “family friendly” truck. Ironically, we didn’t have any children at the time (but wanted to) and wouldn’t have our son for another six years.
Buying Our Big Mistake
We sold my wife’s Jeep and then traded my truck in on the new Silverado. It was a crew cab, 4-wheel drive, Z-71 and all the other goodies I wanted. It was a nice blue-gray metallic color (blue is my favorite color).
We got some really good discounts for being in the military, but after taxes, negative equity from my F-150, and the extended warranty, we financed just shy of $40,000. This was the most debt we’d ever had, but we decided we could “afford it” because the payments were about the same as both of our other two vehicles combined.
Since we rolled the taxes into the loan too, I used the money to get my dual exhaust (which a dear friend paid half of as a gift) and got a spray-in bed liner.
Trouble From the Start
I didn’t know it at the time, but if you have a loan on your vehicle and are trying to take it overseas, you actually need permission to do so from your bank. The bank we’d gotten the loan from through the dealer wanted six months of payments up front before letting us take it overseas!
We ended up refinancing the loan through USAA who allowed us to take the truck to Germany without any extra payments, etc. In the end, we actually got a better interest rate too, but they made us lower our credit limit on our credit card first before approving the loan. This was the first time I’d ever heard of an underwriter, by the way.
Made it to Germany
Soon we were in Germany with a brand-new truck and I was immediately put on orders to deploy to Afghanistan. The truck didn’t fit most of the places we went to in Germany. We ended up buying a little Jetta (The Goat) for $1,250 to drive around base and take short trips.
The only big trucks like that in Germany are generally driven by Americans. Fuel was much more expensive and rationed too. So the truck sat most of the time.
To top it all off, our insurance almost tripled because, in Germany at the time, you had to carry 7 million euro in liability coverage. At this point, my truck was costing us right around $1,000 per month to own and operate. That was about half of my entire salary at the time.
Time to Think and Nowhere to Go
It wasn’t long before I was in Afghanistan. I work in communications, so I had a lot of time monitoring the network and general shift work. This left me with a lot of time to think and analyze things.
Sitting in a cold, smelly tent in Afghanistan, I had an epiphany of sorts while looking through bank statements (how you know I was bored!). I was crazy! I was going to be paying $7,000 in interest over the course of my truck loan. Seven thousand dollars!
I could have almost bought my old truck, Marleiya the F-150 I’d loved, in cash.
Debt Free Temporarily
We’d been debt free once and it felt great, but it was short-lived. That was after my first deployment to Iraq. That gave us a critically needed reset, but we didn’t learn from it. I think that’s because we didn’t have to struggle much to pay it all off (I got paid an extra $1,000/month tax-free at the end of my deployment).
We’d already used up 15 months’ worth of extra deployment pay. This time was different; there was no way we could pay off all our debt in this nine-month deployment. My wife had student loans, I had some credit card debt, and then there was the truck.
I Started to Learn
I stumbled upon a blog called, Get Rich Slowly. It was on some internet list of ten best blogs of the year or something of that nature. I was bored, in a very cold tent with a slow internet connection.
I read one article which had links to other articles, so I opened those in new tabs. Then I read the new tabs and opened more tabs with more articles. I spent the better part of two weeks reading what I think was almost all the articles on the site!
We Got on the Same Page and Became Determined
I had made up my mind. I was going to get debt free and stay that way. When I returned home, I talked with my wife, and she initially thought I was a little crazy. “How are we going to have a nice vehicle if we don’t take out a loan?” she said. I just knew that one day she’d understand.
We ended up buying Dave Ramsey’s book, The Total Money Makeover and read it together. I would read a chapter, and then she would read a chapter. We would discuss the chapters together and decide what we would implement, what we felt was important, and how we would accomplish those things. Pretty soon we were both determined to get debt free.
Our First Budget
We made a budget, a tight budget, and started attacking our debt. We stuck to the budget and cut extra expenses everywhere we could. We limited when we would go out. We cooked at home every night other than maybe once per month.
Before we knew it, we’d eliminated all our debt except for that truck. We’d tried selling the truck, but we couldn’t because we still owed too much. With the negative equity and sales tax we’d financed into the loan, we didn’t have the cash to make up the difference.
We actually use a very similar budget even to this day. The main component is an Excel spreadsheet and envelopes. We decided to save our money, go on trips while we were in Germany, and hold onto the truck until later.
Back in the United States
When we moved back to the states, we bought a little SUV for my wife (with really high miles) in cash. We still had the truck, but we decided the truck needed to go. In reality, we had the money saved up by then to pay the truck off, but we would have liquidated our emergency fund and education fund.
Getting Rid of the Truck
We went to dealerships and tried to trade down, but they just won’t give you a deal unless you finance something through them.
We finally decided to check with CarMax and they offered to buy the truck at a price we couldn’t refuse. It was a really hard thing to do. In some ways we felt like we were stepping down in status, but I knew we were just fooling ourselves.
I knew stepping onto the path less traveled (going debt free) was the best way to true wealth. We sold the truck and they wrote us a check for the difference of what we owed. We used that money and bought my wife a Jeep Compass just like she had before – we wrote the dealer a check in full.
Remembering the Best and Worst Financial Decision We Ever Made
We cut ties with the worst financial decision we’d ever made – that truck. Still, I’m thankful for that truck as it will be remembered as one of our best financial decisions because of what we learned from it. Seeing the interest we were paying on that truck opened our eyes to our foolish thinking of vehicles as investments. They are simply tools for our use.
Now I understand that the automotive industry and banking industry (especially when they work together) are designed for the consumer to lose every time, no matter what. We are extremely excited about what the future holds. We’ve been (slowly) building our wealth ever since.
Long-Term Changes
We’ve saved money in a separate vehicle fund ever since we got rid of that truck. We’ve purchased several vehicles in cash since then. Let me tell you, if you’re going to buy a minivan, the coolest way to do it is by swiping a debit card.
We’ll continue saving like this into the future so replace vehicles and pay for their maintenance. After we buy our next car, we’re going to start funneling part of our vehicle fund into a taxable brokerage account to invest that money and grow our vehicle fund.
There are times I’ve missed that truck, but I’m glad we woke up to how much we were losing to the bank. We’re so much better off because of it!