Sailing Terra Firma

Having a car loan seems inevitable, doesn’t it? Like it’s a requirement of life? Most people never stop to ask how much a car payment actually costs, and I’m not talking about the interest rate or the payment; what I’m asking you to consider is the opportunity cost- the true cost. So… have you ever considered the real-life consequences, the financial impact of a car loan on your lifestyle?

I imagine the answer is no. Car debt is normal in our culture, so we don’t really question it or think about it. In fact, according to CNBC:

“Nearly 86 million American – about 1 in 4- carry outstanding auto loan or lease debt.”

You can read the rest of the article here.

But what if you paid off your loan? What if you didn’t finance another one?

To start, you’d probably drive an older car. You might have to budget for maintenance outside of a warranty. You might have higher mileage than you’ve ever had (or had in a long time). You might feel like you’re missing out, or a little jealous when you see a car that’s a little, or a lot nicer than your old paid-off “junker”.

But you might also find something else.

Travel.

Debt Payoff.

A down payment for a home.

Retirement.

Freedom.

And yes, maybe even FIRE, financial independence, retire early. (but that’s another post for a later time)

And I’m not talking about theory. I’m talking about actual financial shifts in just one car loan. Just 72 months.

So are you curious? Are you starting to wonder what your life might look like if you didn’t have a car loan at all?

Or maybe never again?

We’ll I’m glad you’re starting to think about it, because I have a calculator for just those sorts of questions.

Right below, type your monthly car payment, and see what it actually costs you, what else you’re giving up.

Go on.

Dare to find out?

Is it more than you expected?

It usually is.

Because you don’t always feel it, not monthly, not when it auto-drafts, and you go on about your life thinking that this is just how it is. And it is normal, but that doesn’t mean it’s what you actually want that money to be doing. How does it feel, though, once you start thinking about everything you have to set aside to make that payment?

Us? We usually choose not to carry a car loan. On occasion, we have, currently we have one- it’s about $200 a month. It’s uncomfortable. I don’t like it. I prefer not to have one, but for the moment… we do.

But we only have one, and the delta between our payment and the average payment is almost $500. So that difference? It goes to fund other things.

Cruises mostly. That’s something we prioritize in this stage of our lives. But that’s the great thing about having systems in place to steward your money: you choose.

The rest? We pay ourselves first, well, first after our tithe. The money goes into savings. And I promise we’ll dig deeper into that topic too, but we’re not there right now.

It’s important for us to make sure that excess becomes retirement investment, not consumption- because we’ve lived our lives the other way. We’ve spent our money and had nothing to show for it. We are intentionally more careful now, although we’re always still learning.

What’s important to understand is that it’s a choice.

And there is always a tradeoff.

We choose older, higher-mileage vehicles on purpose.

Not because it’s ideal.

Because it supports what we actually want our life to look like.

The scale of this choice is growing, again according to that CNBC article:

“The average auto loan balance was $33,519 at the end of 2025, up from $24,782 in 2018.”

Over that same period, monthly payments rose from $506 to more than $680.

For most people, that’s a lot of the monthly budget and when you consider having two loans? That’s a lot of cruises….

This isn’t about avoiding car loans.

The thing I’m hoping you see is what you’re actually losing by choosing to have the car payment.

For us? We don’t want to wait until retirement to travel more. We want to do it now, with our kids, while they are still little, while we still can.

So I ask you, think about what you want. What do you want to get out of this one wonderful life? Make a decision. Embrace the tradeoffs and make the choices that actually get you where you want to be.

<3 Nik

Nikole Callihan is a Florida-based real estate investor, licensed real estate agent, and co-founder of Sailing Terra Firma. She works alongside her husband, Joseph Callihan (MBA), to build a lifestyle structured around systems rather than circumstance—where work, family, travel, and asset-building are designed to reinforce one another instead of competing for time and attention.

Connect with her on X or Instagram