Last year, my car broke down a step from my parking space after two years of almost constant use on my part.
The car was older than I am, and had numerous issues. Most of the issues we could fix, or at least live with, but when it finally died, I went out the next day to shop for a new (to me) vehicle.
At the time, I needed a car for a few reasons:
- I worked, went to school, and lived in 5 different cities (two of these did not have bus service from the main routes)
- I went to school in a somewhat dangerous area, and my night classes didn’t end until 9:50 PM.
- I would have had to leave at 4:35 AM to arrive at work by my 8:00 AM start date (3 buses, 2 trains, and a half an hour walk)
- My job required a car.
I didn’t want to buy a car that would leave me stranded on the side of the road, so I had a criteria set out for when I did buy a car. When I went to buy the car last year, I got a decent deal on a 2008 Honda with only 42,000 KMs on it.
I financed the car at 4.99% over a five year term with the intention of paying it off quickly, and did a debt payoff plan in February 2012 that projected my car loan payoff date to be “the middle of 2013”. It looks like my accounting was perfect, because:
By July 1, I’ll have my car completely paid off.
This is actually not that huge of a deal, because the payments were not high, nor was the interest, and I hardly even noticed the money coming out of my account each month.
I’ll be rerouting some of the money that’s landed in my emergency fund as a result of my $10,000 emergency fund goal. This will leave a little more than $5,000 in my emergency fund, and I’ll have an extra $220 (the amount of my car payment) at the end of each month.
I have plans for that money already, but if I really wanted a $10,000 emergency fund, I could have it in 22 months (not taking into account interest accrued on the balance) by rerouting what would have been my car payment into my EF account.
This isn’t going to happen, though, because I just don’t feel like I need a $10,000 emergency fund right now, and I have some financial responsibilities coming up that I have to consider, which I’ll be blogging about later this week!
Anyway, it’s always nice to see a debt paid off, even if it didn’t make that big of an impact to your life.
Yay, even if it isn’t that big a deal to you!
Congrats! That’s great!
That’s awesome! Congrats! I bet it’ll feel good to get rid of that payment.
Yay! Congrats! Less debt is awesome.
*Happy squeal and clap* for no more car loan! 🙂
This is no small matter, Daisy. Any debt that is paid off is great – no matter how small. We are looking forward to paying our car off by December. It’s looking very possible, and we’re just giddy about it. Thank you for sharing your experience. We’re SO going used next time – in 40 years when our Honda Fit finally dies!
Good for you! My goal is to pay off my car loan by the end of this year- I find it to be one pesky piece of debt!
Always a good thing to see when a debt gets wiped out. Nice work Daisy!
WOOHOOO! 🙂
Congrats! Sometime a car is a necessary evil. During most of the year mine just gets me to and from the park and ride and I’m on the bus to downtown. And great planning on the debt payoff, it’s always nice when a plan comes together as it were.
woot woot, congrats!
I think it’s a big deal! Avoiding 4.4% interest in this low interest rate environment is a pretty good return on your money. Congrats!
Awesome! Sounds like we are in the same boat! I bought my new-to-me car after my old one was totalled, it’s a 2007 VW Golf that only had 48,000 km. I’m on track to pay it off in October, and I’m so excited about that!
Congrats on paying off your loan…no matter how small the loan is it always feels good getting your debt (credit card, student loan, car payment or the big mortgage to zero).
Congrats! I love having paid off cars and am not looking forward to seeing which one dies first…
Congrats on paying it off, Daisy! It may not feel like much, right now, but I’m sure there’ll come a time when you’ll notice the little bit of extra cash. You know, when you need more mulch. 😛
Good for you! Both of our cars are paid off and it is a great feeling. I know we will need to buy something newer in the next year or so and I hate the thought of what it will cost us!
Woot! Even though it doesn’t seem like much to you right now, an extra $220 a month is pretty awesome. Since you already have plans for it, clearly the extra cash will help you out in a significant way so kudos! I hope to have my car paid off in another year. We’ve been putting an extra $150 per month toward the 0% interest loan in order to get it paid as soon as possible.