I'm dumping an annoying debt - the car payment
The average American makes a car payment each month.
I am no longer one of those people!
That's right, today I made my last car payment. And by last, I mean my last car payment ever.
Why did I have a car payment?
|My car looks like this one. I love it! Image from here.|
So, I put 35% cash down on the car and financed the rest at a decent interest rate for five years. The rest of the money went into my investments. I drove off the lot with my new Volvo V70 and the smug feeling of someone who thought she beat the system. Or so I thought.
Having a car payment really wasn't a good idea.
I have never regretted buying the car I did. I love my practical Volvo wagon! But I quickly came to regret financing it.
It annoyed me to have to remember to pay the car payment each month. It annoyed me that I didn't own my own car (technically, the bank owned it). It annoyed me despite making extra payments, the bank would not allow me to pay off the car more than six months early without charging me a stupid prepayment penalty fee.
Oh, and did I mention that the stock market did more tumbling in the last five years than a gymnast at the Olympics? That really annoyed me! So much for my dream of using the excess car money to earn large capital gains in the stock market!
Today is the first day of the rest of my life!
Today, I own my car. Woohoo! No one can take it away from me, regardless of my financial situation. That feels GOOD.
Steve Diggs (No Debt No Sweat Financial Ministry) says that 22% of all cars and trucks are bought with cash. That means, a whopping 78% of auto purchases are financed! I will never again be part of that 78% that finances a car, and in a future post, I will go into more detail on my plan to make that statement a reality.
How do you feel about automobile financing? Have you found it to be as stressful and annoying as I did? Or do you find it beneficial financially for your personal situation?