That was kind of a bittersweet day for me. My Honda has been extremely loyal to me since I bought it in late 2006, and she’s (I should give her a name ;))been an incredibly efficient and reliable car. On the other hand, 100,000 is no longer fresh off the showroom, and she is officially a middle-aged car now! Apart from the sentimental bond I have with my car, this milestone also has plenty of important financial topics attached to it as well.

I’ve put about 21,500 miles on the ricer in the 19 months I’ve had it, or roughly 1,130 miles a month. At this rate I will pass 150k sometime in 2012 and 200,000 about 4 or 5 years after that. While I certainly believe this car will last well belong 200,000 (it’s a Honda after all), I feel that I need to start preparing for life post-Civic (or very likely post-first Civic).

One of my financial goals is to never have to finance a car. There’s plenty of debt to be had with college and a future home that I don’t want to be indebted to a vehicle- It’s expensive enough to pay for gas, insurance, and upkeep. Besides, cars depreciate in value, and it just doesn’t make much financial sense to take out a loan for depreciable things. All that being said, I need to be prepared to buy a car without financing.

I bought the Civic without financing, but had to pull some money from places that I really didn’t want to, and I don’t want that to happen again in the future. So, I recently opened a savings account on ING specifically for this purpose. At it’s current balance of $34.04, I’ve got a long way to go, but then again I don’t think my car is going anywhere soon.

The only thing that concerns me is the fact that my ING accounts are only earning 3.0% right now, while inflation seems to be running far higher. This is going to have to be looked at in the future as my balance grows. I don’t want money sitting in a car fund for years while inflation eats away its real value. I also need to consider what the typical APR’s are on car loans. If I can get financing for a fixed 6%, but feel confident I can clear more than that in after-tax investing returns, it would make sense to take the loan. It’ll turn into a numbers game for sure, but I’m biased towards writing a check on the spot!

Oh, and before I go. Due to the negligence of the first owner to keep up on basic maintenance, I was only getting 29-30 mpg on my first several tanks of gas. Now here I am over 20,000 miles later on a clean air filter getting well over 35 mpg’s each time. The ROI on that little $15 booger has got to be incredible!