Wednesday, August 24, 2011

Car payoff plan!

I am SUPER DUPER PUMPED! I have an awesome plan to pay off my car really fast!

Already I have been paying more every single month. Sometimes a lot more, sometimes it's just 5 bucks more... but either way that is what I am working my little heart out to pay OFF! I HATE having a car payment. There was a time in my life when all I could think about was new cars. I HATE the car business... the sales people...the squirly people that sell the cars, but I LOVE trading my car. Or I should I love having a different car but i DESPISE the entire process.

Anyway, I finally reached the point in my life when I don't care. I have a nice car and I like it. It's good to me, i'm good to it. We get along well. But I DESPISE having a car payment. Hate it. don't want to do it anymore. And i'm breaking this viscious cycle.

I started doing the math and I have had a car payment since I was 18. Now my first car only had a car payment of $156 a month (MAN do I miss that civic), but it was STILL a car payment. After that my car payments doubled(when I traded in) and have remained the same ever since. So I did some math.

For two years I drove that awesome little civic. My payout: $3744

Then I turned around and traded it in but still did good on the trade... but frankly that statement is ALMOST an oxy moron. No one does "well" on trades.

Next car the payments were $336. So for 1 year I paid: $4032
NEXT car was $385. I had it 2 years: $9240
NEXT car IS $372 a month. I've had it 27 months: $10044.
That comes out to $27000. and I own NONE of these cars. It makes me sick at my stomach. WHY WHY WHY? Why was in this viscious cycle?

That is TOO much money to now OWN something. Good LORDY! I could have bought that first car 3 times over by now! AGGGHHH!!! I want to scream.

I realize that some people may pay TONS more for their cars. I know my own husband does. "To each his own"...but MY "own" is now to OWN my vehicle. I am on a crunch plan.

I have some student loan money that charges 3% interest AFTER I am done with school. Currently I am paying 7.6% interest on my car loan. And I have 3 years left on it. So my plan is this...

Take the student loan money and PAY DOWN my car loan. Continue to make car payments at the same time. My car will be paid for in 21 months instead of 36 which has me paying off my car a year early. Now I KNOW that doesn't sound like much early but that is ONE WHOLE YEAR!

But what about the student loan money,  you may be asking.... WELL, when I get out of school I will have 3% interest on this money. But as long as i'm in school I have no interest which means EVERY SINGLE dime that I pay down will go STRAIGHT to it and not interest. I have 4 years left of school. That means I will have plenty of time to pay it off before ANY interest occurs.

Yes, it's kinda like taking from Peter to pay Paul or whatever the phrase is. BUT if the math makes sense... why not? Why not take advantage of a HUGE difference in interest and get the car stinkin' paid for!!!

What are your thoughts? Is there anything like that in your financial situation that you could do to save money, interest, and time?

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