To payoff my car, or to not - what would you do?

[Ryan]

I owe a little under 7K on my Scion xB. I have about that much in my savings account - and figure by the end of summer I should have about 10K. I figure that should leave me with a decent amount leftover in my savings account, if I did decide to pay it off.

What are the benifits of paying the car off early vs normal payments on my loan? I'm financed through USAA, interest rate isn't very high (3.9%).

 

[AgaBoogaBoo]

If you put that in an ING Direct savings account you can get more than 34-5% on it, might want to consider that

 

[PhoenixOrion]

Big benefit=one less debt on your plate.

If you don't have any other need for that 7K sitting in your savings accounts then you should pay off your car.

 

[jagec]

Calculate your loan payments back to May 2006 dollars, and compare that to how many May 2006 dollars you'd have at the end of the summer. There's your answer.

 

[TheLonelyPhoenix]

I believe your insurance drops a bit after you have the title in your hands (a.k.a completely paid off). Someone else can feel free to correct me on that if I'm wrong.

 

[Aimster]

your pizza job makes u a lot of money doesnt it

 

[CTrain]

Originally posted by: AgaBoogaBoo
If you put that in an ING Direct savings account you can get more than 34-5% on it, might want to consider that

Nah.....don't forget taxes on the intesrest so you're really earning only 3%.
Pay the car off....if you're feeling brave, you can also lower your insurance converage and save some moola.

 

[MichaelD]

Originally posted by: CTrain

Originally posted by: AgaBoogaBoo
If you put that in an ING Direct savings account you can get more than 34-5% on it, might want to consider that

Nah.....don't forget taxes on the intesrest so you're really earning only 3%.
Pay the car off....if you're feeling brave, you can also lower your insurance converage and save some moola.

By dropping Collision off your insurance, your payments would drop by 50% if not more. But having no Coll. is a double-edged sword. ESPECIALLY with a nice, newer vehicle. Who cares about a dent/cracked windshield on a 10-year old beater? But on a nice, 3-5 year old car...diff story.