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Old 12-16-2012, 10:12 PM   #1
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Pay it off now? Or wait til tax time?

Dh and I just realized we have enough in savings to pay off our car! even more exciting, we just bought it in June!!!

but we cant decide whether to pay it off now or keep making payments until tax time and pay it off then, to continue building DHs credit.

If we paid it off now, we'd have $1500 in the bank total leftover. Which isn't much (especially for our comfort level) but we have minimal bills, so it would work. Plus it would free up $200/month. Then, come tax time, we could put it all in our savings and use it to move with as well. Our savings wouldn't be HUGE, but we'd be debt free...

On the otherhand, if we keep paying on it until February/March, we'll knock off another $600. Then we'll pay about $6500 out of taxes, and have the remaining amount (going off last years, about $2000) plus whats in savings to pay for the move...

WWYD?

Part of me says pay it off, throw the car payment into savings and bulk up savings until we move and try to stay under $5,000 for it (totally do-able, i think). That would leave us with $5k in savings when I move home, and with the way its looking, we'd be easily able to throw $1k into savings a month then. We could also possibly drop from full coverage to liability, but i'm not sure we'll do that, since its our main family car and we'll be driving it cross country in March

But the other part of me is terrified to have ONLY $1,500 once its paid for. I keep thinking "what if it breaks down" or "what if (insert crazy thing) happens"...

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Old 12-16-2012, 10:16 PM   #2
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Re: Pay it off now? Or wait til tax time?

How much would you save in interest between now and taxes if you paid now?
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Old 12-16-2012, 10:34 PM   #3
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Re: Pay it off now? Or wait til tax time?

....that is a good question. I have no idea what the interest rate is... ::scurries off to find the paperwork::
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Old 12-16-2012, 10:41 PM   #4
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Re: Pay it off now? Or wait til tax time?

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Originally Posted by WyattsMommy09 View Post
....that is a good question. I have no idea what the interest rate is... ::scurries off to find the paperwork::
For that number would be the determining factor. If its a small number that seems worthwhile for the security of keeping your savings intact, delay paying it off. It's a significant amount that you could put towards something else, pay now.

Your bill should say how much you pay to principal and how much goes for interest to give you a good idea. X3 or 4 months.
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Old 12-16-2012, 10:41 PM   #5
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Re: Pay it off now? Or wait til tax time?

The paperwork says we have an APR of 4.79%, and we'd pay a total of 13xx in finance charges.

After our payoff amount changes (in a week), we have to add .90 onto it each day for our new payoff amount. So I guess a rough estimate would be ~$50? Idk LOL
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Old 12-17-2012, 06:14 AM   #6
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Re: Pay it off now? Or wait til tax time?

I'd just pay it, but I get hives if we have too much debt. I hate owing on anything.
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Old 12-17-2012, 06:19 AM   #7
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Call for a current payoff. Not all
Loans are configured the same. So it may save you nothing to pay early.
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Old 12-17-2012, 06:36 AM   #8
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Re: Pay it off now? Or wait til tax time?

I would pay an extra 100 each month. You will still have money in savings and you will pay it off faster.
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Old 12-17-2012, 06:57 AM   #9
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Re: Pay it off now? Or wait til tax time?

I guess if building credit I would leave it. Longer it sits & u payoff is better til closer to end of loan. If u weren't building its up to your comfort level. Only worry on repairs really if used older car not new.....
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Old 12-17-2012, 06:59 AM   #10
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Re: Pay it off now? Or wait til tax time?

Pay it off and don't look back
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