combfilter

iTrader: (3)

1. why throw any money into something that depreciates like a car? Buying any car is never an investment. Yes you are eventually going to have to finish paying off that depreciating asset but there is no reason to tie up ALL of you money into something that depreciates as fast as a car. Keep your money

2. like the dude from austin asked, do you have enough emergency money if something happens after you pay it off?

3. take half of that savings you have and invest it. CD's are not great right now, but there are other options. Go talk to someone about this

sammy5001

Here's a 3rd option: take the $24k to a casino -- double or nothing. If you double then get a new car. If not then well...you're screwed.

In all serious though, I think the worst financial decision I've ever made was paying off the first car I bought within 2 months of getting it. I was in the same situation and I put in $25k in one shot. If you're paying <6% interest, then you can easily earn back the 6% interest if you invest the $25k into virtually any instrument. Even the wamu online savings account gives 4% interest.

hihi410

Figure I will put in my 2 cents.

If you can find a good savings/money market/CD which gives you a decent interest in return, than you can invest the $24k; at the end of the agreement, use that money to either put back into investment or car payments.

You can also reuse the investment money to pay down your car loan and refi the loan if you can get a better offer on the interest rate.

Honestly, its how wise you are with your money. If you paid off the $24k car loan, which frees up at least $560 which you can save. Although you will have $2k left in your checking account now, but if you stash away the $560 a month in a savings account, you will have better gain later on.

There are positive sides to everything, it all narrows down what you will do with your money. Burn it or save it, all up to you.

sykocus

iTrader: (1)

One way to look at it is unless you can find an investment that will give more more then 6.25% return you will lose money by continuing to make payments. Having money set aside for an emergency is important too. Though IMO if you have $26K cash in your account right now, you should probably see some sort of financial planner on how to best put it to use.

greg0723

well dont use all of it pay off like 16k then make some monthly payments that way its still early and you have money in the bank

T-Rex06

iTrader: (12)

With the current interest rates, if you choose to put your money in the savings, you will not find anything that'll give you even close to 6% APY. Paying off the car sounds favorable especially if you have emergency cash saved up.

Or if you're willing to take a risk, you can invest the money somewhere else instead of high-yield savings. It is more like a long term investment but you can make decent return in 3 years if you put your money in the right places. But if you choose to keep the money in the savings, I'd rather pay off the car and not have to worry about spending extra $560 a month.

Terrance

Brian231

Not to nit pick Nighthawk, but you may want to make the below corrections for your vehicle profile description:

Mods to date:
3M Clear Bra by AeroTech
Brake Light Red-outs
Bumper reflector smoked
35% Formula 1 Tint

myculito

iTrader: (1)

I don't know if I would pay off the car so quickly. Having $24k to pay off a depreciating asset just doesn't make sense. Why tie up your cash like that?

Even if you could pay it off, the money would pay you higher dividends in other investment areas. Yeah, CDs aren't good right now, and the best you're gonna get in a savings acct. right now is in the 4% range. But in an unstable economy, you're better off holding on to cash right now if you have it.

Check out today's New York Times, and take a look at the retail outlets filing for bankruptcy (Linens N' Things, Berlitz, Sharper Image, etc.). Things aren't looking too hot right now.

TonySwank

Exactly. If you have 24k just sitting in a savings account then you can afford to go meet with a financial adviser. They will pay for themselves tenfold in the long run.

MLIAISON

Oh god here comes the grammer queen

Brian231

Queen has some female connotation; I want to be a king like Simba!!!!

APBT4Me

between inflation and the falling dollar (with respect to other paper currencies) it is a much better decisions to keep the money. Even if all you do is put it in a savings account earning 1% you are better off. Assume you are paying 7% on the borrowed money, inflation and the falling dollar mean the value of your dollar is declining roughly 10-11% annually. Meaning you are 3-4% better off borrowing and keeping cash under your mattress. Your car nut will not increase after the contract has been signed so you get to pay in devauled dollars. now if you can find a safe investment even if it has virtually no yield (like the previously stated 1% savings account) you are even better off.

The bottome line cars are NOT investments and never pay them off if you can avoid it at least not with the current economic conditions we are facing here in the US.

MLIAISON

Keep your money! Its better in your pocket than anyone elses. Just keep doing what you're doing. It will work out.

kickin8

iTrader: (1)

spelling king/queen whatever you name it

Brian231

Thanks for the understanding kickin8 (LOL)!!!