The "All Paid Off" Thread

I paid cash. I hate paying interest. It's all money down the drain.

Tom

 

I've never borrowed money. This means I lived very simply for most of my life. But it also means my Prius and all my other possessions have always been mine, never the bank's.

 

I was going to pay cash up front, but I asked about finance in case they were going to offer a 0% interest deal. I was interested in keeping some cash back in case I decided to buy a house (hey, this was March 2008, at that stage UK housing market falls were small and we didn't know how deep it would go). Somehow I managed to get talked into a Personal Contract Purchase scheme - here, you pay off a smaller amount monthly then, at the end of the period, the option to just return the car, to have the remaining amount owed taken as part exchange, or to pay the remaining lump sum and keep the car.

However, on re-reading the paperwork after making a few payments, I realised it was actually costing me £5000 more than just paying it off (or 1/3 the principal), so I paid it off early. After 5 payments of £260 = £1300, the principal had dropped only by £500, so it ended up costing about £800 more than just paying cash up front.

Dealers' finance staff are pretty good at playing games with numbers - I'm a software engineer with a pretty good Bachelor's degree, and very good maths grades at school, and they managed to con me.

 

PIF....paid in full for my "Eleanor!!!" I am saving the money that would be used for a car payment and paying myself rather than someone else. Don't owe anyone anything and want to stay that way!!!

 

I've been a cash buyer for years. I admit to taking a loan on my 2007 Prius, but it was necessary to qualify for a State "rebate" for purchase of the car. I paid off the small loan in two months.

I've preferred to save money and buy later. A $20,000 loan for 4 years could cost $2,545 in interest ($474/mo. at 6.5%). Instead, you could raise the $20,000 in less time or by saving a lesser amount each month. Even if you can earn only 1.5%, you can save more than $70 each month by putting $404/mo into savings for 4 years. If you were to save the same amount as the planned payment, you would need to save for 41 months, not 48.

It is hard the first time you do this, but if you keep cars for 5, 6 or 7 years, you'll be ready before you know it.

 

I admit I took a loan for mine while waiting for a rather large check to clear. It cleared the next month and I paid it off then.

 

Paid cash up front for my Prius and previous cars (with one exception). Hate paying interest. Even paid cash the one time I bought an apartment.

 

i paid cash for both of mine... well, actually my 2006 was paid for in cash but was not my cash... that came from the insurance company of the lady that hit me...

boulder, as long as you dont pay interest or loan costs you did as well as me.

i always try to plan my purchases. now this special buy program my mess up my plans a bit. i have a CD earmarked for a car purchase (was hoping for EV ) but it does not mature until july 2010 which was when i was predicting that a viable EV would be available.

but this 2010 offer is tempting, but its a one year interest penalty for early withdrawal which would be over $1000, so, i may try for that zero interest loan and pay it off next july.

 

bought mine slightly used, but still paid in full, no loan

 

Paid cash for both of ours. No use having monthly payments with interest if you don't need to.

 

well, that is how i got my money but in reverse. i took advantage of the housing bubble in my area. i bought land, built a house, lived in it for 10 years, sold it, paid off my loan and walked away with $160,000 in cash

now, had not really planned on buying another house because was unsure of whether or not i would be staying in the Puget Sound region. houses are ridiculous around here.

but now that the bubble is deflating, i think i will wait until the market is starting to turn and see what is available.

 

I have a lot as I've been renting for four years and lived with my parents for three years before that after graduating (they did charge rent, but only about half the going rate), while earning pretty well and living relatively frugally. I wasn't tempted to get into housing as the market was overheated in 2002-3 when I could have afforded it at sensible prices; it was then ludicrously overheated and is still higher than 2004 prices. There's a long, long way to come back down.

Having paid off the car loan I never should have taken out in the first place, I'm able to save at a moderate rate. My next car will be another cash purchase. I don't know if I'll keep this one for six years like the last one, though.

 

A pretty good rule is that borrowing money is expensive. Occasionally there are limited-time zero percent offers to lure you in, but unless you pay in full before any interest or penalties accrue, you'll pay through the nose.

And any time there are numbers that are even the slightest bit odd or confusing, you're paying through the nose.

My first car was used. I was young and my dad gave me good advice: Start making "payments" into a bank account towards the next car. The money earns interest (well, it did back in those days!) and by the time you are ready for another car, you pay cash. Then you start again making "payments" for the next car.

Saving up means doing without for a while. But then forever after, you pay no interest, and you have more money to spend. A few years of doing without while you are young frees you from debt for the rest of your life!

The opposite view is to borrow as much as you can and die in debt and you never have to pay it off. But the interest you pay over a lifetime is probably more than the debt you leave behind.

Lenders are not philanthropists. They make money off of people's impatience to get stuff now rather than saving up until they can afford stuff. A Prius is a great car. But it's not worth going into debt over. If you cannot afford to pay cash, you're better off with a cheap used econo-box.

 

Used home equity line (prime +1). Paid off in two years.

 

I'm not so sure. Money's pretty cheap these days. A well-built and reliable car will outlast several 'el cheapos', and cost much less to fix. I'm paying less for a loan than I did in repairs on our previous car.