Bought a car last summer and I still owe about $18,000. Interest is 4.99%. $518/month for 48 months with 40 months left on the loan. I have been paying an extra $400 instead principle for a few months but stopped recently. I hate paying it every month to know I can save an extra $518. Also planning on buying a house this year or by next year. I have less than $100grand saved up. I make about $6k a month. Should I dip in that savings to pay off the car or at least a more portion of it even though the potential plan on owning a home?
Posted by scream4cheese
3 Comments
Just follow this: https://www.reddit.com/r/personalfinance/w/commontopics
Pay as much per month as you can on the car loan without doing into savings.
What car make/model/year? Doesn’t seem that crazy of a modern new car loan but you could always go cheaper with a decent used car bought in cash. At that interest rate, I probably wouldn’t worry about the extra payments if you are planning to keep the car for 4+ years to finish the loan payments which seems reasonable. I don’t think paying the car outright in cash makes sense to deplete your savings for a home down payment.
What is the cost of a house that you’d be looking at? Is $6k/month pre-tax or post-tax? I’d say think about the price of a house 20% down payment you’d be interested in plus some extra savings for new homebuyer fixes and work backwards to land at a savings number you can shoot for.