Small Vehicle Debt Brag

[kanewtz]

Well folks...last week my wife and I were in Florida on vacation (great to get away from the cold winters of Canada).

Upon on our return...I made the final payment on our 2013 Ford Explorer LTD.

This means...we have zero debt on our two vehicles (other being a 2007 Civic).

Feel great not to have to pay interest and to completely own your vehicles.

Now...to make that neglected lump sum mortgage payment that I should of done in Nov.

Cheers,
Matt

[lilo0003]

Feels great doesn't it.. We have not had a car payment in 10 years. We save to replace them and then buy a decent used vehicle.

[Brad]

Yep me too! I think financing cars is one of the biggest drains on middle class peoples' finances.

[kanewtz]

I was pretty smart about it this time though.

Took an open HELOC at Prime+0.5%. Smartest IMO as there are no penalties for putting extra money down. Sure, it was 1.5% higher...but I would of paid A LOT more in interest as I knew I was going to pay off the loan within 6-7 months. Bought the truck in July 2012.

[Natalka]

Wowsers! Very cool. So, payments of $15k a month?

[Shwa Girl]

Congrats OP. Bet the car "drives better" now that there are no payments.

Yep me too! I think financing cars is one of the biggest drains on middle class peoples' finances.

Guess the only way around this is to save a new car as soon as you have paid off the car loan. So OP would be putting a monthly amount in the "ING New Car Account" (example), starting in March. So when the time comes to replace this paid off car, OP can pay in cash, negotiating a discount for paying in full, of course.

[wifey]

Congrats OP. Bet the car "drives better" now that there are no payments.


Guess the only way around this is to save a new car as soon as you have paid off the car loan. So OP would be putting a monthly amount in the "ING New Car Account" (example), starting in March. So when the time comes to replace this paid off car, OP can pay in cash, negotiating a discount for paying in full, of course.

That what we are doing. I just payed off our line of credit. Now i opened an account and am putting the exact amount i was putting weekly on the line of credit into the new "used" car account. I am going to drive my current vehicle until it dies (it a '98)! When it does, i'll be ready

[Brad]

The idea is that once you get your card fund up to a certain amount, the interest earned by that amount would be enough to buy
you a car every 5 years, so you'd be getting "free cars".

Say you have $20,000 in your car fund invested in something earning 8%. In 5 years you'd have 30k. So every 5 years you can spend 10k on a car. Assuming you have a 20k car that depreciates to 10k in 5 years, you can trade it in for a 20k car every 5 years. Of course you'd have to adjust this depending on what interest rate you actually earn, eg if you average less than 8% over the last 5 years you'd have to either settle for a cheaper car or delay getting a new one.

This was explained by Dave Ramsey: http://www.daveramsey.com/media/flas...ee/player.html

Although he's a bit optimistic in his example because he assumes your money will earn you 12% a year, and also neglects to take into account taxes you'd have to pay on the interest and the likelihood of repairs your car might need over those 5 years. But it's still a good idea.

[suziehenderson]

Congrats on paying off your vehicles! I hope we can get our van finally paid off this year as well.

[walkonby]

nice going!!

[kanewtz]

Wowsers! Very cool. So, payments of $15k a month?

Paid half cash and borrowed half. Not sure how much the payments were a month as it was open and I put as much as I could at the time without putting strain on my finances.

[vesper]

Far out! What a smart choice you and your special lady made. Mortgage will gone soon to?

Yahoo!!

[oddduck]

Wow, good job. DH and I bought 2 cars in a 8 month period last year (a 2011 Ford Fusion and a 2012 Dodge Grand Caravan). We paid off the car quickly (within 4 months), but we still have a good chunk of the van lingering. Finally got around to making a lump sum payment on the weekend... We weren't exactly planning on buying 2 cars so close together, but it got to the point where our older vehicles weren't worth the repairs.

[kanewtz]

Far out! What a smart choice you and your special lady made. Mortgage will gone soon to?

Yahoo!!

Mortgage is well on its way. I have been aggressively paying it down as much as I can.

Waiting for my Tax Refund to put a lump sum payment.

[vesper]

Mortgage is well on its way. I have been aggressively paying it down as much as I can.

Waiting for my Tax Refund to put a lump sum payment.

Yahoo!!!