Yeehaw! Readers of my blog know that I have been letting a small balance linger on my auto loan for a few months now. I have had the savings to pay off the loan all along, but darn it if I wasn't engaging in some mental accounting and allowed my emotional side to make a decision that I knew was not rational. The interest on the car loan is obviously higher than the interest that I am making on my savings, especially on an after tax basis.
I had knocked my car loan down to under a thousand bucks, and finally decided that I was being silly. I pulled some money out of my ING Direct account and sent a payment off to the kind folks at American Honda Finance Corp. I expect to receive title for my car in a few weeks.
Now the trick is to see if I can drive car payment-less for the next ten years!
Great job LAMG! I paid off my car after 1-year of payments (to build credit score). It's great to be debt free, huh? Congrats!
Posted by: Tim | September 21, 2006 at 10:30 AM
Congrats!!!
I remember those feelings well. We are going to try to not have a car payment for as many years as possible. It is such a freeing feeling!
Hazzard
Posted by: Hazzard | September 21, 2006 at 11:42 AM
No car payment is a sure sign of wealth. Seems like car financiers make a ton of dough off of the car buyers.
Hope your next car is bought with cash. In the mean time run that thing until the proverbial wheels fall off.
Congrats!
Posted by: D | September 21, 2006 at 11:43 AM
No car payment is a sure sign of wealth. Seems like car financiers make a ton of dough off of the car buyers.
Hope your next car is bought with cash. In the mean time run that thing until the proverbial wheels fall off.
Congrats!
Posted by: D | September 21, 2006 at 11:44 AM
Congratulations!
I'm really hoping that my car has a few more years to go, so that I can postpone a car loan of my own. Actually, that reminds me that it will be due for a checkup pretty soon.
Posted by: HC | September 21, 2006 at 11:49 AM
Great! Good for you! It's awesome not having a car note!
Posted by: mapgirl | September 21, 2006 at 11:56 AM
Hooray! That is such a good feeling, not having that bill every month on something that is always losing value. :)
With that in mind, I'll pass along my dad's advice to me years ago - his suggestion was to keep paying that money to some sort of savings account, to either save up the cash for another car, or to use it for any service/repair on this car.
Posted by: Emy | September 21, 2006 at 12:25 PM
Good for you!!!
Posted by: Amanda | September 21, 2006 at 12:29 PM
Good job! Was wondering why you were keeping that sitting around. I paid off my auto loan 2 yrs early, haven't had a payment for 2 years. Now you can take that monthly payment you used to make and save/invest it.
Posted by: Todd | September 21, 2006 at 01:18 PM
Wow, thanks for all the kudos! I'm glad to be done with it. I plan on putting about half the payment into an account for future repairs as Emy suggested.
Posted by: lamoneyguy | September 21, 2006 at 02:21 PM
Congratulations!
Posted by: Flexo | September 21, 2006 at 02:49 PM
About time!!
Posted by: financial freedumb | September 21, 2006 at 03:51 PM
mmm.. now to drop a turbo into that TSX. If the RDX can boost fine, so can yours! Do it!
Posted by: Cap | September 21, 2006 at 11:42 PM
Excellent lifestyle personal strategy. What's interesting was when I last "stretched" into a home loan in the mid 90s and had three vehicles and no car payments the banks "assumed" I had 2 car payments for qualification purposes. Got that? Having paid off vehicles was a negative. Things change eh? Paying cash for our Civic in April was a great deal. Gas savings and resaleare still in the plus category. Yep, drive it until it dies BUT start a replacement fund soon. $80-$120 per month and you can repeat the same when the time comes.
Posted by: Robert Cote | September 22, 2006 at 01:08 PM