I paid off my car!

[phil5185]

Until I bought my currant car I never had a car payment. Now I don't know why people do it, I can't wait to be done and I keep telling people NEVER again!!

OTOH, be sure to study cause & effect of car financing. Several posters accept the conclusion that car payments are bad simply because they are 'bad'. Yet I am retired, relatively wealthy, and I always finance our cars for 100% of the cost and for 60 months.

[debtheaven]

I don't think they are bad per se, Phil. All I know is I'd rather stretch myself for a rental than for a car LOL!

Money is still very finite in my house.

[phil5185]

Why do you finance?

Say that I want to buy a $25,000 car. Two choices:

1. Sell $28,000 worth of stock, use $3000 to pay capital gains tax on my profit and use $25,000 to pay cash for the car.

2. Leave my $28,000 in our fund (where it has averaged 11%/yr for >30 yrs and let it double to $56,000 over the next 6 or 7 yrs. Borrow $25,000 from the credit union at 5% for 60 months and pay $472/m ($28,306) for the car. True, I spend $3300 for the use of the $28,000 - but I earn nearly $28,000 with that money.

[RoadToRiches]

Hmm, I dunno.

I think it just comes down to thinking of "I don't owe anyone any money" and have this peace of mind I guess. Personally, I am glad I don't have car payment anymore, but at the same time, I was never in position of thinking like you Phil simply because I was always broke because of taking on loans lol ... Damned if I do, damned if I don't I guess.

So, if I followed your plan right now...I would have to save that 28k to put it in a fund. By the time I save it up, I will need replacement car. So, I have a choice... to spend that 28k and pay cash for my car and have no debt or take out a loan, keep the 28k and make payments.

I know what you are saying though. If you look at numbers, yes it makes sense with what you are saying. But to get to your point and do things like this, first, the person needs to actually save that money. lol

Soooo...I am gonna pay my next car cash, so I can save money to be in your position for car after this one lol

The big difference is, that you have actual MONEY to pay that car loan off if something crazy happens. Most of people (me) wouldn't have any cash to cover it if , say, I lost my job or something.

[phil5185]

The big difference is, that you have actual MONEY to pay that car loan off if something crazy happens.

True - but how do you think I got like that?

[2kids10horses]

Phil,

Instead of the Credit Union, if you took out a HELOC that interest would be tax deductible.

[Frappuccino]

Yay! I can't wait to join you. I am moving to an apartment next month, so that I can finally pay off my debt. My goal is to have all of my debt paid off by April 2013. Posts like yours inspire me!! Congrats!!!!

[piratesparrot]

Congrats! I have 4 more payments to go and can't wait. Don't want to finance a car again. I'm going to be banking the payment money to get my next car. ( hopefully years from now since I want to run the tires off this one)

[RoadToRiches]

Mar 15, 2011 21:16:20 GMT -5 phil5185 said:

The big difference is, that you have actual MONEY to pay that car loan off if something crazy happens.

True - but how do you think I got like that?

You were driving paid for car without making payments and saved up 28k???

[cookiemonster]

Congratulations, it's a great feeling!

I paid my car off last year and was expecting my car to break down right away. It waited 5 months. Then my mechanic told me I would probably only get another year out of it because of rust damage. I'm just hoping I can get through another inspection (in May). It's 11 years old, but only has 117K miles on it.

[RoadToRiches]

Cookie, that is the thing I fear with my car. Rust. I know frame will be ok because it's all alluminum, but the body on the other hand, it's already starting to rust in the back. I am trying to decide, once I pay off my debts, if it would be worth to fix it. It would probably cost about 3k.

[phil5185]

but the body on the other hand, it's already starting to rust in the back.

Are you in an area where the City uses salt rather than sand in winter? Or are you on a coast where salt fog damage occurs? My dad (in the midwest) bought a new pickup in 1970, kept it garaged at night, didn't take it into town after snow storms because of salt. It's still good, no rust, saw it last week.

[RoadToRiches]

I am in Ohio and they use salt here. The reason why it's rusting it's because my car got hit by someone while it was parked and they ran. Since like a dummy, I didn't have full coverage, everything came out of my pocket (which is also part of my credit card debt). I was trying to save as much as I could, so I opted out for bumper from the junk yard, straighten out quarter panel instead of new one which would require a lot of labor. In reality, I saved about 2-3 grand. But now, it's starting to rust. It's just that one side in the back. For past two years it's been worst and worst. Now, I see rust color bleeding through around rear wheel.

Other than that, there is absolutely nothing wrong with my car. It has 140k miles on it, all freeway...maintenance is up to date and I really take care of it. Paint looks awesome otherwise when I wash and wax it. It's just that driver's side rear panel that's ugly.

I figured, I know I can make this car go 250-300k miles (ebay has many of them with 300k miles). So let's say, 3-4 more years?

Mechanically awesome car..would it be worth to spend say, 3-4 grand to get this rust fixed the right way (replacing qp) and possibly re-spraying hood and front bumper?