payoff car?

kmurphy2131 · October 2014

So I was going through my budget spreadsheet today and was looking at what i have left to payoff my car and I'm so tempted to just pay it off today, despite the fact that logic is telling me that I probably shouldn't. So I am here looking for MM input. Here are the facts:

- payment is 221.56/month, scheduled to be completed in July 2015

- the interest is 0% (so no financial incentive to pay off now)

- The final payoff if I did it today is ~2000

- KBB value if we privately sold is ~$6000

- car has 101,000 miles on (yes, purchased new in 2010, I had a 110mile round trip commute for 2.5 years, now I drive 12 a day)

We have ~$20,000 in savings right now. If all continues as planned (paying my car payment) we will have our fully funded e-fund by January.

Emotionally it would be awesome to be like "yay! I actually own my car after 4 years of payments!" but logically I can't decide if there is really any good financial reason to own it. thoughts?

Xstatic3333 · October 2014

Oh man, I'm in almost exactly the same situation. The only thing holding me back from just doing it is that we want to do an oil-gas conversion and may need the excess savings for that. I don't think it is wrong to do it given what you have saved, and that freeing up cash flow will help you meet your other goals more quickly. The only reason I'm prioritizing my car payment at all in my goals is that as my smallest debt, it is the quickest way to free up cash flow.

I feel you on the high mileage, too. My 2012 Fit has 96,000 miles on it. If only the city would take that into account when they send the car tax bill...

vlagrl29 · October 2014

don't do it. I had 0% interest on my car too and felt the urge to pay it off early and glad I didn't

JoanE2012 · October 2014

We always finance our cars for 5 years but try and pay off in 3 years. Interest rates on our 2 cars is/was 0.9%, so, like you, not really saving much. But, our savings are built up and I just hate having payments on things when I don't need to.

lifeonthehill · October 2014

If you used the money for your car payment could you still have the whole e-fund saved by Jan. or would this set you back?

Personally if you could still have the E fund fully funded at the same time I would do it just for the YAY moment and to not have to worry about minimum payments if something went wrong between now and July 2015. If not then I would just hold off.

Erikan73 · October 2014

I totally get where you are coming from, it's nice to have that feeling of the car is paid off & totally mine but then do you delay having a fully funded e-fund? I say go on the path you've already determined. Once your e-fund is fully funded in January then you can take the money you had put aside for that each month and put that towards your car payment & then pay it off early.

Sisugal · October 2014

Pay off the car and then boost the e- fund savings to keep the e - fund on track. The satisfaction of getting rid of the debt is worth it. It is not like you have no savings and as long as you stay disciplined with the e-fund, I call it good.
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kmurphy2131 · October 2014

Thanks everyone. I think we are going to wait until the e-fund is fully funded and then we will reconsider paying the car off in full. Find a best of both worlds type of situation, get the e-fund funded then pay off the car early to still get the "yay! it's actually mine!" feeling

brij2006 · October 2014

Pay off the car and then roll that monthly payment into your savings to finish up the E-fund.

uncreatedsnow · October 2014

I would pay it off! I'm itching to make a lump payment on mine and it's killing me not to!

payoff car?

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