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2 Bumps

Which would you choose to do with your money?

We all know tax time is coming up.. Let me give you a little scenario..

If you ended up with just ENOUGH to pay off your car loan completely but there were bills and other needs that DESPERATELY needed to be caught up and paid NOW.. which would you choose? In the long run paying off your car note would keep you from making a $400 a month car payment.. So do you take that option, or get yourself caught up NOW?

 
Ctink8189

Asked by Ctink8189 at 12:58 PM on Nov. 22, 2010 in Money & Work

Level 21 (11,991 Credits)
This question is closed.
Answers (14)
  • Bills will always be there I would knock that $400.00 a month off real quick. IMO
    Butterfly1108

    Answer by Butterfly1108 at 5:45 PM on Nov. 22, 2010

  • I'd get caught up - the car doesn't cost you any less if you pay it off now or in the future (except you can lower your insurance to liability only, which would reduce that bill.) I would assume that other bills (credit cards for example) likely have interest that is calculated every month, so you save money by paying those off as soon as possible.
    Scuba

    Answer by Scuba at 1:02 PM on Nov. 22, 2010

  • From my experience, car loans are usually at a lower interest rate than other credit cards. Take care of the necessities NOW, groceries, electric, mortgage. If you have much left over, you can make larger payments (or a single lump payment) that will go directly to the principle on your car, ultimately paying it off faster.
    DMac08

    Answer by DMac08 at 1:01 PM on Nov. 22, 2010

  • I would pay my bills and keep paying the car if you can't afford to keep paying $400 refinance it or sell it and get something cheaper..I want a new car but do I have $400-500 payment heck no you have to put into consideration the insurance,the taxes,licensing,repairs if needed I'd rather drive my 02 stratus that's paid off!
    chica679

    Answer by chica679 at 1:06 PM on Nov. 22, 2010

  • How fast would the extra $400 a month catch you up? if you coulld be caught up witin a monthor 2 that may be the option I would pick. If you get the chance pick up the ramsey book about paying down debt...I and several others I know find that helpful to get organized in paying down debt
    rebeccadac

    Answer by rebeccadac at 1:08 PM on Nov. 22, 2010

  • If the other bills are so desperately behind that they may cause you to have power shut off or something more seriously, then pay them to the point that they are okay for a month or so... then pay as much as you can on your vehicle note. Then hopefully you can kill two birds with one stone. :) Yes, it means paying that car note for another month or so... but if you pay up to only have one or two car payments left AND you ensure nothing negative will happen with the other bills while you pay those last two notes, then that frees up $400 a month for you, catches up the other bills to a point that they can easily be completely caught up very soon and in a matter of 4 or so months you are back to having some moeny each month! :)

    Good luck! This is my plan with my tax money too! :)
    Memigen

    Answer by Memigen at 1:14 PM on Nov. 22, 2010

  • i guess it would be depend on how much those bills needed to be paid NOW. if they really needed to be paid now i would pay them now. if you catch up pretty quickly with the bills with the extra $400, then i would pay the car.
    shoot4thestars

    Answer by shoot4thestars at 11:51 PM on Nov. 22, 2010

  • I would get caught up on the other bills that needed paid now!
    BeautyFromPain

    Answer by BeautyFromPain at 1:01 PM on Nov. 22, 2010

  • I woild pay off the car and free up the 400 a month cash.
    okmommy08

    Answer by okmommy08 at 1:04 PM on Nov. 22, 2010

  • I am pretty confident that with the extra $400 a month we could catch up fairly quick..maybe 2 or 3 months. It would be a rough 2 or 3 months but should be easy sailing after that. It's just a tough decision for us to make at the moment. Thanks for all the opinions so far =) Keep them coming
    Ctink8189

    Comment by Ctink8189 (original poster) at 1:15 PM on Nov. 22, 2010

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