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!