(Originally published on the Christian Community Credit Union Blog)

If you’re like most people, transportation is one of your three  largest expenses. The other two are housing and food. The larger the  expense category, the more important it is to make good decisions in  managing the category well.

#### Just the facts

Buying a car can be a very emotional decision. Even if you’re not “a  car person,” there’s a lot of cultural pressure around cars. For one  thing, doesn’t it look like just about *everyone* is driving a  newer car? The older your car gets, the more left behind you may feel.  Planned obsolescence only increases the temptation to buy. Car  manufacturers make frequent stylistic changes to their products, wanting  to spur sales by making older models look outdated. When it comes to  buying a car, what’s a well-meaning, stewardship-minded Christian to do?  More specifically, is it okay to take out a car loan?

__Let’s try to answer that question by considering three others.__

#### 1. Why do you want to buy?

Do you actually *need*  to buy a car? If you’re a recent  college grad with a new job that requires you to have a car to get to  work, maybe you do. Or, maybe your car is so old or in such bad shape  that it’s dangerous to drive. Of course, those aren’t the only “valid”  reasons to buy a new or newer used car. But there may be some *less-than-good* reasons  to buy, such as just being bored with your current car, even though  it’s still in good shape, or feeling the pressure to keep up with what  your friends or co-workers are driving. So, the starting point is  determining whether you actually *need*to buy a car.

#### 2. Can you afford to buy?

(Proverbs 22:7)If you’re intent on buying but it’ll require a loan, there are no  biblical prohibitions against borrowing. However, there is this  cautionary note: “The borrower is slave to the lender.”

Take an objective look at whether a car payment will fit on your cash  flow plan (a.k.a., “budget”). The ideal place to begin in drafting a  cash flow plan is with generosity because the Bible teaches us to make  generosity our financial starting point (Proverbs 3:9). It also says  it’s wise to build a reserve of savings (Proverbs 21:20). Ideally, you  would allocate at least ten percent of your monthly gross income to  generosity and ten percent to saving/investing.

After making provision for those priorities, enter all of your  essential expenses (such as your mortgage or rent, food, utilities, and  insurance), and then your discretionary expenses (i.e., entertainment,  vacations, clothing, and gifts). Is there any room for a car payment? If  so, how much of a monthly payment could you afford?

#### 3. What are the best terms?

If you decide to finance a car, be intentional about the details.  There may be some especially long loans available to you, such as loans  that stretch out to seventy-two or even eighty-four months. While  signing up for such a loan will make the monthly payments lower than a  shorter-term loan, you will, of course, have the loan for a longer  period of time. Plus, you’ll end up spending more on interest over the  life of the loan.

From a strictly objective financial perspective, it is best to borrow  no more and for no longer than necessary. That may mean holding off on  your car purchase for a while, if possible, to save for a larger down  payment. Or, it may mean opting for a less expensive car.

#### Make the decision with care.

Remember, the process of buying a car can be fraught with emotional  landmines. “Everyone else” seems to be driving a newer car, and the  latest models can make your car look outdated. So, before heading to the  showroom, pray about the decision and run some numbers. If you decide  to finance a purchase, carefully consider the terms of the loan.

__[Image](https://www.mycccu.com/resource-center/blogs/matt-bell-is-it-biblical-to-borrow-to-buy-a-car/)__ used with permission

FaithFi

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If you’re like most people, transportation is one of your three largest expenses. The other two are housing and food.

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