This has been a long time coming. I kept wanting to pay off my car but kept putting it off because I liked the extra cash sitting in my bank account. Yes I know, personal finance blogger super fail., finance MBA student super fail, and financial industry analyst fail. However, I was able to pay off my car about 1 year and 1 month ahead of schedule, which I would say is great!
I paid off my car and I never want another car loan!
P.S. Check out my last car post, here, about how we bought a used car for him in cash last month. It's a great feeling and especially knowing that we bought it for less than $3K, spent around $500 with the BF fixing it up and making it absolutely perfect, and now it's worth around $5K to $6K (that's what they go for used around here.
Thinking about how I might still have a car payment if I would have never paid beyond the $400 monthly payment is crazy. I would hate to still be paying for my car in April of 2013.
- Pay for my future cars with cash. This will save money and free up monthly cash flow in the end.
- Buy a used car. It is nice having a new car, because it's reliable and I can control how it's driven (and not having some reckless driven destroying it), but used cars can be reliable too with proper maintenance.
- Not wait over a year to fix a cracked windshield. It's extremely annoying when it's right at your eye level.
- Get something with better gas mileage.
I do have some costs coming up with my car within the next month, but after that, I should be car cost free for quite some time (besides routine maintenance of course). I need to replace my cracked front windshield (someone cut me off on the highway and a rock flew up and hit my window UGH) and renew my plates within the next month as well. I've priced windshields and that will be around $400 and to renew my plates will be around $100. So after next month, I will be pretty happy with having a pretty much free car.
After being tied down to a $400 car payment every month since I was 18 (almost 19), I can gladly say that I can breathe now. I will be putting this extra money into savings (for a future car), paying off debt and towards other similar financial goals.
I'm lucky that my car hasn't depreciated too much either. I bought my car before fees and everything else for around $20K, whereas used they are going for around $15K (yes I realize I will not be able to get the full amount). This is not as good of a value as the car that we just sold last month. Refresher – it sold for the EXACT same amount that we paid for it around 2 years ago. Awesome deal there! And we could've sold it for more, but just wanted it gone as we would have had 4 cars in the driveway then.
Another thing we plan on doing with our next car is making sure we get something with good gas mileage. The Jeep gets around 17 miles per gallon, and my car gets between 24-29, I think. Neither of us have a long drive to work (less than 10 minutes for each of us), but the amount of money saved would still add up over the long run.
Also, another question. Does anyone lease their cars? I don't think I know of anyone close to me who does this. I don't think I would ever lease a car, but maybe some others were wondering? Let me know!
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Savvy Scot says
March 20, 2012 at 1:02 amHey! That is great news that you have paid off your car – congrats. I also think that you are very fortunate that it has not depreciated too much! Any I will always pay for a car upfront in cash or with an interest free credit card! 🙂
WorkSaveLive says
March 20, 2012 at 2:36 amCongrats on getting the car paid off! $400 off the budget will certainly help the cash flow!My wife and I just purchased a new-to-us car last week – paid for in CASH! I've learned my lessons with debt and I will never use debt as a tool to get what I don't NEED again. The only time I consider using it is for a house. Hopefully we can be responsible enough and plan well enough to be prepared to always purchase cars with cash…but I guess you never know what could happen.
financialconfessions says
March 20, 2012 at 3:41 amI don't NEED a car as of yet, so I will not buy one. When I need one, it'll be straight up cash. I won't finance and I refuse to take loans out now that I know how easy it is to get over your head with debt.
Ruthie Hart says
March 20, 2012 at 4:00 amwoot woot!! what an awesome feeling!! We are huge believers in buying used cars we can pay for in cash, a car payment is just an annoying added expense! now you can go spend that money on new tvs, clothes, purses….hehehe jk!
inbudgetswetrust says
March 20, 2012 at 4:01 amCongrats on finishing your payments so far ahead of schedule! PF Blogger win!My car is paid off, too, and I plan to never take a loan to buy a car again! (Of course, that means I'll have to create some good cash savings in the future.) My personal finance professor in college told us she had been leasing cars for years — she wouldn't recommend it to us — but said it made sense when she was first struggling to make ends meet as an immigrant, and at the time she lectured, she was leasing a car because she needed to have a nicer car for her business, but she didn't want to commit to car repairs that happen after you've owned for a few years
Liquid Independence says
March 20, 2012 at 4:36 amGas mileage is key for me so I have a 4 cylinder hatchback. I borrowed from my line of credit to buy my car. Congrats on paying off your loan.
So Simply Chic says
March 20, 2012 at 4:57 amI haven't had a monthly car payment yet, and I couldn't imagine paying hundreds of dollars every month for one! I will always use cash! (New follower by the way and I love your blog)Xox ohttp://sosimplychic.blogspot.com/
debtntaxes says
March 20, 2012 at 5:03 amCongrats on having no car loan. Both of our vehicles are now paid off. I financed 100% of my car when I bought it back in 08', her vehicle we paid half cash and half financed. Hopefully those loans will be the last vehicle loans we have. We pay payments to ourselves now instead of the bank, so when we buy our "nused" vehicle next time it should be all cash. I'm pretty sure I will never lease a vehicle, just doesn't make sense for my situation.
Sarah says
March 20, 2012 at 5:08 amCongrats for paying it off so early!! I'm actually in the market for getting a car this year. I'm gonna have to go back and read about your car posts so I don't get myself into trouble.
This That and The MB says
March 20, 2012 at 5:09 amI did the same thing you did to my jetta. I bought it and sold it for 200 dollars less than I bought it for new. I love how they hold their value. I also drove it 2 yrs and put about 35k miles on it. Way to go for no car payment. $400 is a big bonus to put to something else now. My wifes car is done in july i cant wait. it is only 150 though.
Girl Makes Cents says
March 20, 2012 at 5:18 amI bought my car from my mom for $1500 back in 2007. I am in the market for a new-to-me car soon though. I have saved up enough to buy something new in cash. Yay for no car payments!
Laura @ No More Spen says
March 20, 2012 at 5:40 amCongratulations Michelle! I never want to borrow money for anything ever again…even a house.
Angella says
March 20, 2012 at 5:59 amWe leased my car in 2005, then bought it after the lease. HUGE mistakes there, but we were young, stupid, and felt like we had no other options at the time. I'm still paying on it, until 2015!! Although I hope to pay it off much sooner. That's 10 years of car payments on one damn car! After that we swore to never buy new (or ever lease) again. All our other cars were paid for with cash!
Bryan says
March 20, 2012 at 6:26 amThe only person I've ever known who leased a car was my high school football coach. He was early 30s, single, and loved driving this huge blue pickup truck. To be honest, I sort of like the idea of leasing (pf blogger fail, I know). There's just something about always driving a new car every year or two that excites me. I'll probably never lease a car, though, as my wife thinks the idea is ridiculous.
Newlyweds on a Budge says
March 20, 2012 at 6:29 amI would love to be able to pay for my cars with cash, but frankly if I did that, I'd never be able to save up for a house. There's only so much cash to go around…
hklover86 says
March 20, 2012 at 6:35 amWhen i got my car I took a 6 yr term with plans of paying it off sooner. I have yet to make any extra payments and it has been almost 3 years. :(Now that I am done contributing to my emergency fund, I am putting aside some money each pay and I plan to pay a lump sum payment once I have a nice chunk saved up. I wonder if it is better to do that, or to just keep paying little bits as you go??
Jeremy @ Personal Fi says
March 20, 2012 at 6:47 amBoth of our cars are paid for. I hope to never have a car payment again. After being without a car payment for almost 2 years – I couldn't imagine going back to writing that check each month. We have enough cash in the bank now that we can pay cash for our next car when one of our current ones kicks the bucket.
Rafiki says
March 20, 2012 at 6:57 amCongratulations in deed. That freed up cash flow will feel so good despite the huge dent paying it off made on your savings.I have some routine maintenance that is due that I am not to happy about. My insurance and road tax are coming up soon as well. Happy about none but I am already preparing for them. I also have to buy a tail light because I broke mine. Sigh. Cars are so expensive.
House of Sykes says
March 20, 2012 at 6:58 amCongratulations! We will pay my car off next month – 2 years early!!
Whitney @ Everything says
March 20, 2012 at 7:15 amI've never bought a car before. I've been driving the same car for 10 years. It was the car that I received when I was 16 years old. My grandma died, and my mom used some of the money to buy me a car. I have been driving it ever since. I was recently in a bad accident that almost killed me, where I was driving my husband's car. Whatever we receive from the settlement, we are using to purchase a car. We are just going to pay cash. I don't think I will ever finance a car. Right now, I have too many credit card payments. If all goes well, 10 years from now, I'll be driving the same car that I am getting ready to purchase.Congrats! I bet it feels amazing!
Live Simply- Live We says
March 20, 2012 at 7:15 amCongrats! So excited for you.
McVal says
March 20, 2012 at 7:23 amCongrats!!!!! We have two car loans right now… Not fun.
Michelle says
March 20, 2012 at 7:54 amThat extra money is going to be so sweet! I've never leased because I drive too much and would owe a ton in fees for going over the mileage.
Marianne @ Preservin says
March 20, 2012 at 8:05 amCOngratulations! We bought our first car at 18 and my parents co-signed a $5000 loan to purchase it. We paid that off and shortly after were rear-ended and bought another car with a car loan. We paid that off a couple years ago and it was awesome! I love not having a car payment! We purchased our truck with cash a couple years ago- that wasn't too difficult because it only cost us $1500. It was a fixer upper and my husband did all the work to it and now it makes us money <a href="http://(http://wp.me/p2fbFM-h)” target=”_blank”>(http://wp.me/p2fbFM-h)! We plan to purchase all of our future vehicles with cash and have been saving up for this for the last little while. I have about $4000 in our car fund right now. We have never bought a new vehicle and probably never will. I am very fortunate to have a very mechanically incline husband who does all of our own car maintenance and repairs. Because of this, buying a new vehicle isn't very beneficial for us.
Michelle says
March 20, 2012 at 8:05 amCongrats, I paid off my car three years ago and Lexie is now 7 years old. I'm trying to get at least three more years before I even think of buying another car. Definitely buy a used car, Lexie was a used car from a dealership and she came with a warranty and she still runs like new.
Pamela says
March 20, 2012 at 8:22 amAwesome!!! Congratulations!! 🙂 I am SO ready to have mine paid off!!
Nichole says
March 20, 2012 at 8:29 amThat is SO awesome!
Erin @ Currently Cov says
March 20, 2012 at 8:35 amCongrats, that's a big deal! I was lucky enough to have my parents get me a car when i was in college (a used one) but I live in the city now and metro everywhere so although its old it really doesn't get any miles put on it so it's lasted me a very long time!XO,Eri nhttp://erinscurrentlycoveting.blogspot.com
SavvyFinancialLatina says
March 20, 2012 at 8:38 amMy hubby's car loan gets paid off this summer. I am going to buy a car this summer with cash. Hoping to have that baby for a longggg time….C
Fashion Meets Food says
March 20, 2012 at 8:49 amWe are trying to get a house and need a new vehicle so I feel a lot of financial disasters will be headed my way. Congrats on paying your car loan off! xo
Katie says
March 20, 2012 at 9:01 amI paid my car off early last year. I am so glad to be rid of a car payment and I will never take out another car loan again.
femmefrugality says
March 20, 2012 at 9:43 amYou rock! PA has this stupid emissions test so I have a non-problem that's going to become a financial problem here shortly….we just did a major repair on the BF's, too! Blah.
CeCe @Frugalista Mar says
March 20, 2012 at 9:59 amI bought my last car with cash. A late model used honda with excellent gas mileage. Best thing I ever did! I hate car payments. I also leased a car and paid the 3 year lease up front so I haven't had a car payment in…oh 7 years.
Becca Christensen says
March 20, 2012 at 10:42 amCongrats! That's so awesome. I paid off my car in a little over a year after I graduated college and I've been putting aside money every month to pay cash for my next one (which hopefully I won't need for a while since I bought a toyota and it only has 70K miles on it now). But yeah, paying cash is king. : ]Love,B
Christa says
March 20, 2012 at 10:50 amWe have always bought used cars, but the last car we bought was brand-spankin' new. Now, I wish we had bought a late model used, but at the time, it was so nice to have 15 miles on the odometer. I'm totally with you, though — we'll save up for our next car so we can buy a used one in cash.
Maldivian Finance Bl says
March 20, 2012 at 11:10 amCongratulations! That is such an accomplishment.
Maldivian Finance Blog says
March 20, 2012 at 4:10 pmCongratulations! That is such an accomplishment.
Sincerely Sara Cate says
March 20, 2012 at 11:57 amCongratulations! My husband and I bought a car a few months ago. We were lucky enough to get a 0%interest, 60mth loan. We were happy because this way we keep more of our money in our pockets/investments without sacrificing interest on our loan! However, we'll be working on our student loans for what seems like forever!
Daisy @ Add Vodka says
March 20, 2012 at 1:40 pmCongrats! That's amazing!I got a loan for my car. I don't hate it. It's only $220 a month and a pretty low interest rate; plus I have the ability to pay it off at any time without a penalty.
Shilpan says
March 20, 2012 at 1:57 pmCongratulations!! I can imagine how proud you must be. I agree with your thinking not to buy another car without CASH. That's good thinking as paying interest on asset that falls faster than a rock is not a good financial decision.
MessyDirtyHair says
March 20, 2012 at 2:07 pmcongrats on paying off your car!!! that is such a huge accomplishment! im still dealing with college loans…blahhh!! i actually lease my car & i like it alot better!!! xx Kelly <a href="http://www.MessyDirtyHair.com” target=”_blank”>www.MessyDirtyHair.com
Analytical Planner | says
March 20, 2012 at 2:10 pmGood news! It feels so nice not to have a car payment, doesn't it? My car is all paid off. It's a 2004 model bought in 2006 with a loan. We paid it off a few years early. Two years ago both my husband and I had paid-off cars. Then he decided he couldn't live with his car anymore. I tried to convince him to hang in there for another two years and then we could pay cash for a car. No can do. We compromised by trading in his car in and paying some cash. Turned out we paid roughly 1/3 and financed the rest. He would like me to have another car, but I'm not willing to buy another car for me unless we can pay in cash. When you are married, sometimes you just have to compromise.
Tabitha Mahoney says
March 20, 2012 at 3:41 pmWoohoo, congrats on paying off your car, thats awesome. My aunt leases, she loves it, she only drives her car around town and the likes getting the new version of her car every two years. Tabmy-cliffnotes.blogspot.com
Krista Lynn says
March 20, 2012 at 4:48 pmCongrats!!! I'm currently saving money for a car…My plan is to pay cash only, buy a few years used and run it until it dies.
End The Insanity says
March 20, 2012 at 4:53 pmGiven what's happened on Twitter, I'm not sure if it's appropriate any longer for you to read or comment on my blog.If you have an acceptable reason for what you've said, we can talk about it, but otherwise, I see no reason to have anything to do with you anymore.A wise person once said something to the effect of: Just because someone has a problem with someone else doesn't mean you need to get involved. My problems with that person are just that, my problems with him. There was absolutely no need for you to step in and say unkind things about me when I've never said a bad word about you.
Simple Rich Living says
March 21, 2012 at 4:09 pmNice work!!! I am try my absolute best to save enough to buy my next car with cash as well. My care is currently 10 years…I need to start saving immediately but the reality is that this is not currently not a priority of mind. My priority is a home down payment fund. Car will be next.
Tanner says
March 22, 2012 at 5:23 amBelated congrats on paying your car loan off! I'm on my last $5k for my father's car, and I wish I could say I am never getting a loan again, but I'll need one for when *I* get a car of my own. But paying it off early is my goal. Maybe I'll try to race ya and pay it a year and TWO months ahead. 🙂
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