pay off car or save?

Question

Okay i'm 19 and i live at home with my family and i have a car payment. should i double my payments and get the car paid off earlier or make my regular payment each month and save money for home? i financed car for 5 years i have about 2 years and 7 months left. i would like to move out without a car payment.

i finanaced 16 grand for 5 years and my payment is $320.29

Answer 1

Pay off the car. Once you get used to paying this amount, you can then save half of the money that you were paying to the car and have a nice nest egg for your home. If you only have lets say three years left on your car note, doubling your payments will shave that down to less than a year (you are cutting interest payments too)
Wish there were more 19 year olds like you in the world. I am sure that you will have an awesome home.

p.s. If you keep this up, you will have a 30 year mortgage paid off before in 10 years too! You will be the envy of all of your 'so called' peers! Kiss your parents, they have obviously done quite a few things right!

Answer 2

Anytime you have a choice to pay off bills or save the money, there is one standard question to ask. Which will get you a better return on your money? If you can save at 2% while paying 6% on your car, you are losing money. If you have an investment that you will believe make you 10% and the same 6% car loan, you come out ahead (disregarding the fact a 10% investment return would most likely be very risky).

Answer 3

Pay off the car.

By doubling up the payments, you'll owe a lot less interest. I did that with my car. I actually took out a 6 year loan but paid it off in 2 1/2 years. I got a ton of interest back from the bank.

Answer 4

Get the car paid off then put the amount of the car payment into a savings account each month. Since you will be used to not having that money to spend anyway, you won't miss it.

Answer 5

some people gave you the perfect answer then other people followed that with dumb answers.

Bottom line---depends on the interest rate

you can get abotu 6% on your money now
if your car is more than that pay it off 4 sure

if its less than that....like mine thats 1.9 it makes no sense to pay it off faster, plus it does build credit.

save up for a down payment on your house, which is way more important. The sooner you can buy the better, after you move out that is.

Answer 6

You have to do some calculations - figure out how much money you owe on the car (including interest). Now, figure out if there is any savings plan that will allow you to make this much money (or more) in the same amount of time. If the answer is yes, I would save. If not, continue to pay off the car at your regular pace.

Answer 7

I'd say SAVE cash in the bank while you continue to make your payment. You'll earn a dividend if you put it into a smart savings..
BUT....
Check your interest rate on your loan and weigh it out....

How much can I put in the bank and make interest on or is my loan interest so high that I'd be better off getting the vehicle paid for?? Begin by doing the math and answering that question....

Answer 8

There really isn't enough information here. What you have to look at is the interest rate on the vehicle note verses what you would earn if you invested the extra money over the same time. Whichever has the best return is your answer.

Answer 9

at your age establishing a good credit rating is a must paying the car off early would not help you establish that. if you have the extra money put it in savings and earn the interest on it.

Answer 10

Paying off the car is saving.

Get out of debt ASAP than get aggressive on saving money.

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