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Which seems like the more responsible financial plan?

M

MikeMike

Lifer
i have accumulated some savings that i would like to spend, this is not nearly 5 digits in savings, just a few grand.

i have the ability to do multiple things but i have limited it to two.

i have a $200 a month car payment, for the next 4 years, and owe about 8 grand on it.

should i

a: save up, and make a full payment and pay off the car quickly.
b: continue with the $200 a month payment, spend the money on a motorcycle (cash sale, no finance), and then begin saving back up, in order to pay off the car next winter...
C: pay it off, thne begin saving up money, place name on the Camaro pre-order list, and trade in the car on the camaro when it comes up, and then have a new $350 a month car payment... 😀
 
Originally posted by: Baked
0% 60 month finance on the car?
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5% finance on the car, financed $10k on it, around Feb of this year. its about a $190 payment, i pay a minimum of $200 each month some months i pay $300, etc.

the motorcycle is for commuting, fun, saving gas, saving the car.
 
It's pretty obvious what the smartest move is finananically - A. This assumes you are disciplined enough to actually save that $200 a month. Some people spend whatever they take in, so $200 more a month in cash will just be spent.

I just did the same thing, paid off my $9k car loan. I take the money I save each month and put it into my Capital One high yield savings account and earn 5% interest.
 
Originally posted by: Dunbar
It's pretty obvious what the smartest move is finananically - A. This assumes you are disciplined enough to actually save that $200 a month. Some people spend whatever they take in, so $200 more a month in cash will just be spent.

I just did the same thing, paid off my $9k car loan. I take the money I save each month and put it into my Capital One high yield savings account and earn 5% interest.
Click to expand...

i spend very very little.

my main expenditures are...

gas, car... thats about it.

i am lucky, and still live at home, i am 20, have a decent paying job, and easily make the $200 a month payments, and still have a lot more money after the payment
 
Clearly, most likely the best financial plan is A.

You didn't give details of your car loan. It may (in some cases) be cheaper to pay off as much of the car loan as you can pay off now. Then keep making monthly payments until it is done. However, your loan may not function that way, so it may be better just to pay it off in one payment at the end.
 
Originally posted by: tfinch2
None of the above? What's APR on the car payment?
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5.75 or so, i dont exactly remember, nor do i have the policy where i feel like grabbing it...

and for those of you talking about insurance for the bike, its about $1000 a year, if i dont do collision coverage, and thats assuming i insure it for 12 months, even though i can only ride about 9 months, or less, a year. this is through geico, and i know my insurance company is cheaper.
 
Originally posted by: MIKEMIKE
Originally posted by: tfinch2
None of the above? What's APR on the car payment?
Click to expand...

5.75 or so, i dont exactly remember, nor do i have the policy where i feel like grabbing it...

and for those of you talking about insurance for the bike, its about $1000 a year, if i dont do collision coverage, and thats assuming i insure it for 12 months, even though i can only ride about 9 months, or less, a year. this is through geico, and i know my insurance company is cheaper.
Click to expand...

at that % you'd be better off putting the money into the market. hell, savings accounts are up to 5% now (which isn't where your money should be, as 5% is less than 5.75%).
 
It's pretty obvious that the answer is A. Your question is about the more responsible financial plan....it's a no brainer. It might not be the most fun but it is the most responsible.
 
Originally posted by: ElFenix
at that % you'd be better off putting the money into the market. hell, savings accounts are up to 5% now (which isn't where your money should be, as 5% is less than 5.75%).
Click to expand...
The market has gone nowhere for a long time, and with just a few thousand $$$, the fees will kill him. I really don't think there is anything wrong with a guaranteed, risk free, tax free, fee free, 5.75% return.
 
Originally posted by: thomsbrain
if you have less than $10K in savings, the last thing you need to be doing is buying more brand-new vehicles.
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it isnt a brand new vehicle i would be buying 😀
 
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