Paid off my car

[Kevin Dean]

I've spent the past 3.5 years paying off a car that I've come to hate.

Today, I'm done! Paid off the remaining balance and it's MINE!

 

[Brewiz]

Cool...Not too long and I'll have the SWMBO car paid off, can't wait for that raise.

 

[JustDave]

Nice, it's a great feeling, isn't it?

 

[Melana]

Good deal!

 

[Funkenjaeger]

Yeah, my brewing spending went up right around the time my car payments ended, and pretty much cancelled out the savings. But regardless, at least now I have more beer.

 

[EdWort]

Feels good, no car payment. Now, start sticking half of that payment away in a fund for maintence and repairs. It will come in very handy when you have a $1,500 repair bill in the next year or so.

 

[bigjohnmilford]

Feels good, no car payment. Now, start sticking half of that payment away in a fund for maintence and repairs. It will come in very handy when you have a $1,500 repair bill in the next year or so.

good advice, not everyone has the super fil that I have for car repair.

 

[TexLaw]

:rockin: I hate to be the cold water, but you ought to go ahead and put the other half of that old payment aside so that you don't have a payment at all next time.


TL

 

[Surly]

:rockin: I hate to be the cold water, but you ought to go ahead and put the other half of that old payment aside so that you don't have a payment at all next time.


TL

Yup...it works well. Eventually you pay 1/2 of a new car in cash....then 3/4 then, all of it.

Buy quality cars and replace them only when necessary.

 

[MikeFlynn74]

I paid off my old silverado in 3.5 years. I ended up trading it in on the last payment and Got a 2007 Silverado.

My payments stayed the same and now I have a brand new truck. But several years of paying left to go.

 

[Orfy]

What car is it?

 

[avidhomebrewer]

Yeah, I have a '96 Jetta that I've been driving for (paid for quite a while). Time to save for a truck!

 

[Bobby_M]

I'd never buy a car on a loan. I can't believe how normal it seems to most people to just accept that $400+ car payment. It's one of the fastest depreciating piece of junk we ever buy and people let the bank take money on top of that.

 

[The Pol]

My wife and I live completely debt free (except our mortgage). We carry a large mortgage so that we could use all of the payoff money to place into investments. Interest can be written off, and our interest rate is really low... couple that with what we generally return on our investments, compounding... it is much better than having a home paid off and nothing in the market.

I too agree though, I would not get a loan for a car... I pay $7k max for a car and drive them til they are dead... and we have a household income of approx. $100k. My neighbors who are barely employed own the same size house as we do, and own cars worth about $60k... That seems to be the American way

 

[the_bird]

I'd never buy a car on a loan. I can't believe how normal it seems to most people to just accept that $400+ car payment. It's one of the fastest depreciating piece of junk we ever buy and people let the bank take money on top of that.

One loan is at 1.9%, the other's not too much higher. That's free money as far as I'm concerned.

My last car, as soon as it was paid off, the thing basically died. Could have been fixed, but in the process of figuring out what was wrong they found about a dozen other things that I'd need to deal with before long. On the positive side, the garage taught me how to reset the check-engine light...

Current car, though, I plan to drive a LONG time after it's paid off, but the wife's will need to be upgraded to a minivan if "other" plans work out. But, we intentionally bought cars (both Hondas) that we knew would hold their value better than anything else out there.

 

[Bobby_M]

Yeah, at 1.5% or even anything less than 3% is worth financing if you have an investment return that beats it. Even with the rates crashing down, I'm getting 4.07% in the money market acct.

Of course, I'm talking about having enough liquid cash to pay it off immediately if the investments start going bad.

It seems though that most people financing cars they can't afford to pay cash for also can't qualify for the promotional low rate so they're overstepping their means twice.

 

[Ridge Runner]

Today, I'm done! Paid off the remaining balance and it's MINE!

Excellent! We just sent in our last payment on Monday. Bought a Mazda Protege for my wife back in 02'. Got 0% financing. This has been a great car. Just replaced the original battery after 67 months of service. Nothing but brakes, fluids, air filters, for this one. When we were looking at different cars I told my wife about someone I knew who was still driving the Mazda they had in high school 15 years earlier. Hope we get that kinda longevity. +1 on putting at least half of the new $ back. We were looking forward to the "raise" as well but decided to build a maintenance/down-payment fund instead. I'm still pretty lit up about our good news. Congrats to you again.

 

[the_bird]

Incidentally, it was a Protege that basically died on me after I had it paid off....

 

[joejaz]

Feels good, no car payment. Now, start sticking half of that payment away in a fund for maintence and repairs. It will come in very handy when you have a $1,500 repair bill in the next year or so.

You're right about that. My car is in the shop right now and you can't get anything except oil change for less than $300. I lease a Honda Accord for SWMBO, after 3 years get another one. Only thing you change is oil. I figured out all the costs and is actually cheaper than doing anything else. And you know what feels better than no car payment? No house payment, paid last payment yesterday.

 

[Kevin Dean]

What car is it?

A 2003 Chevy Malibu

I'd never buy a car on a loan. I can't believe how normal it seems to most people to just accept that $400+ car payment.

I was a starving college student at the time I got this car and it was all I could do to pull together a down payment. When you have a certain amount of income and an immediate need that risk assesment swings quite a bit.

and we have a household income of approx. $100k. My neighbors who are barely employed own the same size house as we do, and own cars worth about $60k... That seems to be the American way

I'm not a fan of rampant consumerism either. That said, the main reason I hate my car is because it's "nothing special". My wife and I are really shifting into that "cheap car" mentality though we're making the added switch that the car we buy has to be "fun" for us (we've each got different criteria on that one).

Yeah, at 1.5% or even anything less than 3% is worth financing if you have an investment return that beats it.

My grandparents co-signed on this (it was supposed to be a guarantor but the dealer filled it out incorrectly) and I managed to get 2.5 APR on it.

My car is in the shop right now and you can't get anything except oil change for less than $300.

Radiator flushes shouldn't be that much. :cross:

I lease a Honda Accord for SWMBO, after 3 years get another one. Only thing you change is oil. I figured out all the costs and is actually cheaper than doing anything else.

The idea of taking out a car loan is abhorant to Bobby_M and the idea of leasing is even worse to me! He thinks in terms of "asset" and I don't, I consider it a very expensive consumer good so depreciation doesn't really matter much to me and I don't ever plan to sell it unless my goal is to get it off my hands. that said, the idea of paying to use, but not own, the car really doesn't sit right with me.

For everyone who suggests putting the car loan into a fund, I agree... Sort of. Several months ago we started moving towards living debt-free (not an easy thing) and managed to pay off all of our credit cards. The money from that went into an emergency fund which grew at a very decent rate. I feel confidant at this point that I can manage any severe auto failure or any combination on several smaller ones.

Paying off this car is a mixed blessing. We didn't just send in our last payment, it was an early payoff. The money from this, however, is rolling right back into a new vehicle. Say what you will, I've been a Honda Element fanatic for a while. (See, my Honda Element Photo Gallery) In a search for "cars for big guys" I test drove a TON of them but fell in love with the Element. (For all ye big guys out there, the results of my test drives blew me away...) My wife hasn't had a car in almost a year, and while I actually do enjoy driving her to and from work every morning, it really sucks for her not to be able to take a lunch break unless she can borrow someone's car. We've spent the last few months searching and searching for a car for her and didn't find it. Having finally given up, or at least been worn down, she said 'Get your Element" since I knew what I wanted and would have little issue getting it. The decision to pay off the Malibu allows her to have that car, and since we own it she's welcome to trade it or sell it to get a car she likes better, but eliminates the (dangerous) desire to have a car quickly.

And you know what feels better than no car payment? No house payment, paid last payment yesterday.

Have to have one first. It's on my list.

 

[Bobby_M]

It's not so much the loan but moreso buying a car way outside of your means (which is perpectuated by the ability to borrow the money for it). People have shifted their mentality to feeling like they're entitled or even required to have a nice new car regardless of their financial situation.

A coworker of mine bought a BMW 527 in 1997 while living in a garden apartment and earning less annually than the car cost. I think he was paying $650 a month on a 72 month loan. He's still in that garden apartment while everyone around him owns a home. So much for impressing everyone.

 

[joejaz]

Here's why a lease works for me. Three year lease, Honda exl approx. $25000 fully loaded, $300 per month nothing down, sign and drive (12000 miles per year). To buy would cost $483 amonth for 60 months @ 6% interest with nothing down. The equivalent time to pay off this vehicle @ $300 a month @6% would be 9 years. Then I own a 9 year old car with 108,000 miles on it. After the first three years you start to put money into the car for maintenance, tires, brakes, trans and radiator flushes, tuneups ups etc. Otherwise I can have a brand new car every three years.

 

[The Pol]

Or you can own a used one that you arent paying interest on and that is yours to keep. Leasing is like renting, it is throwing money out the window as far as I can tell. You pay $4000 a year to "own" a car basically... whereas it costs me about $1500 a year to actually OWN one that I can sell whenever I like, because it is mine. After paying $12000 over three years you return the car and still have nothing, you have to go get another...

 

[joejaz]

Here's why a lease works for me. Three year lease, Honda exl approx. $25000 fully loaded, $300 per month nothing down, sign and drive (12000 miles per year). To buy would cost $483 amonth for 60 months @ 6% interest with nothing down. The equivalent time to pay off this vehicle @ $300 a month @6% would be 9 years. Then I own a 9 year old car with 108,000 miles on it. After the first three years you start to put money into the car for maintenance, tires, brakes, trans and radiator flushes, tuneups ups etc. Otherwise I can have a brand new car every three years.

PS. I drive a 97 Ford Taurus. Last year I spent $2800 on the trans. Over $500 on the coolant system. Over $300 on brakes. Right now my Taurus is at R&S getting the radiator flushed and the heater fixed, also backfiring --- I have 108,000 miles on it. Wow, I own it. Lucky I only drive 15 miles to work. You will always have a carpaymt whether it's a lease, new car or used becuse you have to maintain it. The lease eliminates the major maintenance.

 

[Bobby_M]

At the "practical" vehicle level, I think some of the low end cars carrying 100k/10 year powertrain warranties are a nice sweet spot. As an example, the Mits Lancer is under 14k. Sure, it's not a great looking car, can't tow a boat, and you won't impress anyone. Even if you had to finance 100%, pay it off in 3 years and you have 7 more on warranty. What I see more happening is someone that can buy this car and pay it off in 3 years would rather buy something like an Acura TL and rationalize that they can make the same monthly payments and have a nicer car. The part they ignore is that same payments means a 72 month loan and by that time, the car is just about worthless and ready for an overhaul.

 

[The Pol]

$4000 a year can rebuild a car... if you pay that EVERY YEAR, then you have a lemon... I always drive cars with >100k miles on them and own them for 5 years or more and only have to pay for regular maintenance. Both of our cars are 100k+ mile cars and we have owned them for years and the most we have spent in any given year was $400... that was last year, out of 6 years on each car.

We all have our own philosophy, but I think we can agree as a whole that the American way is debt... we have less savings and greater debt in the history of our nation at this point than ever before. I never saw my parents buy a new car, never saw my grandparents buy one either... I also never saw them carry any debt other than a mortgage. Which is MUCH more than I can say for my coworkers and neighbors today, who make three times as much annually.

 

[knarfks]

No offense Joe, but you are talking about a taurus. They are known for being pieces of crap, especially the transmissions.
The other thing is, after 3 years a honda accord is still worth close to 12 grand, therefore your still paying the same money if you were to trade it in, and you would be gaining equity on a car. The other thing is a honda accord from my experience if taken care of can be a nice car for at least 180k miles. Then the sad thing is it is still worth around $3-4k then.

Unless you have a transmission, a motor or something really major going out every single year you would still be saving money over car payments.



Oh, well. I'm one of those people who buy older cars for around a thousand in decent condition, or needing a repair that is mostly labor, then do it myself. I drove my last car for 2 years, I spent a grand total of $600 in 2 years including oil changes. The transmission did go out, but I just junked the car and got $150 back on that. The car looked nice, good interior, just needed a timing belt when I got it.
Went to a used car lot, found a decent car for $1500 yesterday, buy them before the car place repairs them, they will sell them for 100-200 over what they traded them in for. If it lasts 2 years I'm essentially paying $60 a month, and I save money not having to pay full coverage insurance. If it gets totaled I replace it with another reliable used car. Basically I'm paying 240 a month less in car payments, and 100 a month less in insurance, no to mention there is no interest.

Not directed at Joe or anyone in particular, just a soap box moment:
I'm not out to impress people. My cars have always been ok looking, but mechanically sound. It's a mode of transportation, not a compensatory mechanism for inadequacies with a boring life or inability to get women(if single or in midlife crisis) or to impress a neighbor who doesn't give a crap anyway, and if they do it is a sad sad thing. If you can afford to pay cash for a car that you like great, go for it, but if want to buy something that will keep you in debt well beyond when the car is worth anything, think twice about it.

 

[The Pol]

"We will pay off your OLD car!!" Yeah, we will roll it into your NEW loan and send you out of the lot upside down on the loan already! Heh... gotta love the American way... funny how fiscal mismanagement is driving our economy into the pooper, yet everyone can justify thier debt... becuase if they couldnt, they wouldnt have it would they? Phenominal shift in society.

 

[Bobby_M]

It doesn't end with cars. My idiot sister bought an overpriced house with no money down and went upside down on the same day. Not only that but the market started a slow downward turn and now she's got to be upside down by at least 50k. Sad.

I don't think I know a single person (in real life that is) that isn't carrying a car loan (if not two) and 10k+ in credit card debt. People who have owned their home for 10 years likely have already rolled a huge debt into their home refinance a couple years back and have already built it back up. All it takes is a minor turn towards a recession and we have the highest level of bankruptcy and foreclosure since the depression. WTF.

Why? A bunch of spoiled brats who think they deserve everything they want. There are so many brand new cars I'd love to put in the garage. I've got my eye on an 08 GT500 and the new Challenger. I could buy both in cash but I don't really think I need the cars. I think knowing I can do buy them is almost as cool as actually owning them (ok, that's a lie I tell myself).

 

[The Pol]

I like you Bobby... I do. You are correct... I love it when I have banks or CC companies try to sell me on thier credit cards because they have such a low APR... I am like, why do I even care what your APR is? I dont know what my current one is! Why? Because I pay off the card monthly, like you are supposed to. We use Discover because of the cash back rewards and charge almost EVERYTHING. Credit cards are great, many of them offer great rewards, and I travel 4 days a week so they are super convenient... BUT you have to be a big boy or girl and pay off what you just purchased.

It is amazing to me all of the ppl that I meet who ask me how my wife and I can plan to retire early on what I make alone... well we dont have all of the crap that they have and we dont drive new cars like they do and we dont buy anything that we cannot pay for. A great quote from a wise man "If you want to live like no one else, you have to live like no one else!" You cannot build wealth if you are trying to keep up the APPEARANCE of wealth... aha...

I fly with flight attendants that make 1/5th what I do, and thier cars alone cost 3x what mine does. I listen to them bit#$ all week long about thier dire predicament... no kidding?! But of course they deserve the car, the house, the $1500 laptop etc... because ppl in debt can justify it in thier own way. If they couldnt justify it, they wouldnt be in debt, it is the justifying that gets them in trouble. It isnt a $30k debt on a car, it is only $600 a month! HA No, it is your soul...