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      02-07-2007, 10:06 AM   #1
Juggs
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Should i just go ahead and pay off my car?

i owe a little over 20 grand on my bmw and I signed a very large contract last night with my business that I run on the side for some serious IT consulting work. I was going to do the usual " invest half in stocks, put the other half towards savings" routine but I really want to just pay off the damn car and get rid of the note.

so should I or should I just invest it? Thanks!
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      02-07-2007, 10:10 AM   #2
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i owe a little over 20 grand on my bmw and I signed a very large contract last night with my business that I run on the side for some serious IT consulting work. I was going to do the usual " invest half in stocks, put the other half towards savings" routine but I really want to just pay off the damn car and get rid of the note.

so should I or should I just invest it? Thanks!
if the interest you're paying on the car financing is greater than what you think you would make on your investments...I would pay it off.
I am pretty sure the interest is greater than what you get back for keeping your money in the savings acct, however, the savings is also the money in case of emergency, so...

good luck
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      02-07-2007, 10:14 AM   #3
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Originally Posted by dr325i View Post
if the interest you're paying on the car financing is greater than what you think you would make on your investments...I would pay it off.
I am pretty sure the interest is greater than what you get back for keeping your money in the savings acct, however, the savings is also the money in case of emergency, so...

good luck


well yes the interest accrued definitely would be more than the car note, im just sick of the monthly deduction from my checking account to be perfectly honest

i dunno, should i give into this impluse buy? Plus the damn car retains its value a lot more and knowing me, i'll be in a 335 by this time next year if i did this
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      02-07-2007, 10:55 AM   #4
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well yes the interest accrued definitely would be more than the car note, im just sick of the monthly deduction from my checking account to be perfectly honest

i dunno, should i give into this impluse buy? Plus the damn car retains its value a lot more and knowing me, i'll be in a 335 by this time next year if i did this
yep, I agree...I paid for mine cash and now I am debating --
1) well...I would "only" have to add about $20k for the 335
2) I am happy with what I have and it is fully paid...
3) But again...that 335 + Xede...hmmmmm
4) M# is coming
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      02-07-2007, 11:07 AM   #5
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yep, I agree...I paid for mine cash and now I am debating --
1) well...I would "only" have to add about $20k for the 335
2) I am happy with what I have and it is fully paid...
3) But again...that 335 + Xede...hmmmmm
4) M# is coming
yeah.... to be honest though i am so torn between the new M or a porsche cayman S. The price of the new M is a little much if the reports are true
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      02-07-2007, 11:43 AM   #6
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Invest and save - don't put more money into an asset which looses value every day!!!!

The only circumstance would indeed be if your investments actually provide you will less return than the interest on the note (which you indicated is not the case).
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      02-07-2007, 11:56 AM   #7
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I got a pretty good rate when I bought my car (4.75%), but my finance guy still advised to pay the thing off as quickly as possible.

While conventional wisdom suggests not tying up your money in a depreciating asset, by keeping the loan open, any profit you make you make is offset by the money you are loosing on the loan.

This is a personal decision, so do what feels right. If you have financial advisor that you trust discuss it with him. We're not exactly financial experts here - we bought a car for $40k+ when you buy perfectly good transportation for less than half that
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      02-07-2007, 12:01 PM   #8
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I got a pretty good rate when I bought my car (4.75%), but my finance guy still advised to pay the thing off as quickly as possible.

While conventional wisdom suggests not tying up your money in a depreciating asset, by keeping the loan open, any profit you make you make is offset by the money you are loosing on the loan.

This is a personal decision, so do what feels right. If you have financial advisor that you trust discuss it with him. We're not exactly financial experts here - we bought a car for $40k+ when you buy perfectly good transportation for less than half that

that's actually a very good rate and part of my reasoning here, and its very hard for a guy like me with a little financial saavy to admit, is that i bought it through bmw with a higher than i should have paid interest rate. While its not horrible like 8% or something, its 6.25 and for a guy with a credit score close to 800, that's AWFUL!

So that's partly why i want to clear the debt of the car. I dropped 15 grand when picking it up, putting another 20ish to finish it out isnt too bad and plus it will get rid of this embarassing " sure i'll sign on the dotted line without thinking about it" mistake i made :mad:
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      02-07-2007, 12:07 PM   #9
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take a 3% secured loan on yourself that way your money is still there in 3 years and u earn credit and my other investments clearlycover this 3% no problem.
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      02-07-2007, 12:11 PM   #10
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take a 3% secured loan on yourself that way your money is still there in 3 years and u earn credit and my other investments clearlycover this 3% no problem.
i have thought about this but then my reasoning comes in saying

" well now you're paying interest on the original principal and now interest on another loan"

so basically double interest
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      02-07-2007, 12:17 PM   #11
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well not necessarly i dont think!!!
lets see here! u got lets say a 20k payoff !! u have 20K in the bank!!!
your probably paying over 6% on your car loan???
Take the 20k from your bank and tell them u want a secured 3%loan on that 20K!!
they will take the 20k and basically make it 40k u leave 20k at the bank in the secured account and u go take the check for 20k u just got to go pay off that 6% loan...when u pay off loans early u dont pay the full finance charge so know u will not be paying all that intrest!!! all u need to do is call and find out what your payoff as of TODAY is not the end of your loan as your statement shows!!!
in the end that 6% loan will be diminished!!
you will only be paying the 3% loan basically with cheaper car payment AND u get your money back in 3years once the loan is done!!!
Correct me if wrong but i think itd be to your advantage for there is only one loan left in play???
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      02-07-2007, 12:22 PM   #12
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Quote:
Originally Posted by Juggs View Post
that's actually a very good rate and part of my reasoning here, and its very hard for a guy like me with a little financial saavy to admit, is that i bought it through bmw with a higher than i should have paid interest rate. While its not horrible like 8% or something, its 6.25 and for a guy with a credit score close to 800, that's AWFUL!

So that's partly why i want to clear the debt of the car. I dropped 15 grand when picking it up, putting another 20ish to finish it out isnt too bad and plus it will get rid of this embarassing " sure i'll sign on the dotted line without thinking about it" mistake i made :mad:
You did something impulsive - you signed because you loved the car and it's not like you couldn't afford it. So don't be too hard on yourself - it's just money. To be in a position to buy the car and then to be in a position to pay it off means that life is good for you my friend.

I should be in a position to pay off mine within the next couple months. This will be the first time in 8 years that I won't have a car payment.
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      02-07-2007, 12:23 PM   #13
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well not necessarly i dont think!!!
lets see here! u got lets say a 20k payoff !! u have 20K in the bank!!!
your probably paying over 6% on your car loan???
Take the 20k from your bank and tell them u want a secured 3%loan on that 20K!!
they will take the 20k and basically make it 40k u leave 20k at the bank in the secured account and u go take the check for 20k u just got to go pay off that 6% loan...when u pay off loans early u dont pay the full finance charge so know u will not be paying all that intrest!!! all u need to do is call and find out what your payoff as of TODAY is not the end of your loan as your statement shows!!!
in the end that 6% loan will be diminished!!
you will only be paying the 3% loan basically with cheaper car payment AND u get your money back in 3years once the loan is done!!!
Correct me if wrong but i think itd be to your advantage for there is only one loan left in play???
OH! I see what you're talking about now...... now that's an interesting concept there adhd, good thinking. I'll definitely consider that, thank you
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      02-07-2007, 12:24 PM   #14
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You did something impulsive - you signed because you loved the car and it's not like you couldn't afford it. So don't be too hard on yourself - it's just money. To be in a position to buy the car and then to be in a position to pay it off means that life is good for you my friend.
yeah true, its just one of those things that gets under a guy's skin ya know? Definitely one way or the other I think i really am going to just pay it off and get done with it. Although ADHD's idea is pretty good too
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      02-08-2007, 11:33 AM   #15
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OH! I see what you're talking about now...... now that's an interesting concept there adhd, good thinking. I'll definitely consider that, thank you
its basically my way of still gaining credit just at a lower percentage!!!
U have to have money to make money!!! I also invest in VANGUARD profits are through the roof this quarter
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      02-08-2007, 11:50 AM   #16
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its basically my way of still gaining credit just at a lower percentage!!!
U have to have money to make money!!! I also invest in VANGUARD profits are through the roof this quarter

whats the ticker name?
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      02-08-2007, 12:00 PM   #17
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To make it short out of a long deal... if you have a "poor" or a short credit history and your score isn't as high as it could be... keep paying of the car monthly... it will boost your credit score and give you a better history... making it more likely to get a loan for a better deal in the future... if you already have a good credit history and have a good enough credit score... go ahead... pay it off... you'll save a lot of money...
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      02-08-2007, 12:09 PM   #18
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To make it short out of a long deal... if you have a "poor" or a short credit history and your score isn't as high as it could be... keep paying of the car monthly... it will boost your credit score and give you a better history... making it more likely to get a loan for a better deal in the future... if you already have a good credit history and have a good enough credit score... go ahead... pay it off... you'll save a lot of money...
agreed.

FYI - i am on my third house purchased ( i rent 2 other properties out) and i've done the payment thing on 3 other cars and paid them off. my credit score is extremely high

want to know something funny though? I only keep one credit card in my wallet and a debt card, and the limit on my CC is only 3k ( because i dont want a higher limit).
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      02-09-2007, 12:48 AM   #19
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Quote:
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To make it short out of a long deal... if you have a "poor" or a short credit history and your score isn't as high as it could be... keep paying of the car monthly... it will boost your credit score and give you a better history... making it more likely to get a loan for a better deal in the future... if you already have a good credit history and have a good enough credit score... go ahead... pay it off... you'll save a lot of money...
IM 25 so yes i have very short credit history!! so for me this is feasable.
YES i completly see your point!! someone who is older does not invest the same as me!!
I hat CC cards and dont have 1 i spend what i have not what i dont!!!
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      02-09-2007, 10:23 AM   #20
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