Well as the title says, we paid off our car loan. I can’t tell you how thrilled I am to be able to write that! I know that we have a long way to go in order to be debt-free, but the fact that we have one less creditor, one less account to worry about, one less person or company to say that we owe money to, is an amazing feeling.
We Finally Paid Off Our Car Loan!
I have to admit that just looking at the letter that came with out title is sort of anti-climactic. I’ll insert a picture of it here’s you can see what I’m talking about:
See what I mean? It’s a generic letter with only a few lines. However, it’s enough to put a smile on my face every time I look at it or hold it. As the time for this loan to be paid off came closer, my wife and I decided that the best thing to do was to take the money that we were paying on this loan and use it to build up our emergency fund and then pay off our next debt account with the highest interest rate.
The monthly payment wasn’t that much, only $161.05; but being able to put that much extra into savings will help us get to our goals much faster. Once our savings account is built up and we begin to pay off credit card, this amount would knock down our debt even faster!
Reality Smacking Me In The Face!
Looking at the contract, which is now stamped “paid in full canceled”, makes me a little disappointed that we paid over $3,000 in finance charges over the time of this loan. It’s frustrating to know that we were in a position where we had to buy something which we couldn’t afford, and therefore, had to take out a loan and pay more than $3,000 extra for a car that barely works now.
More Financial Changes Based On This Loan
The good thing about this situation is that we can now consider changing the insurance coverage on this vehicle. You may well remember that I’ve been documenting our car troubles on this website for the last 6 months or so. With the car having so many mechanical problems that have not been fixed to this point, it may make more sense to drop our insurance coverage down to liability only, and apply those savings to our emergency fund and debt repayment as well.
I will let you know in a future article exactly what we decide. If the savings from removing the collision, theft, and other items included in full coverage is minimal, then it may not make sense to drop the coverage.
Yes, I’m still excited by the fact that we no longer have to send in payments for our car; however, that excitement has been tempered by the fact that we paid more for the car than we should have (when you include the finance charges), and the fact that we still have more financial decisions to be made concerning this vehicle.
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