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Message
Paid off my car today...what next?
Posted on 6/16/15 at 10:31 pm
Posted on 6/16/15 at 10:31 pm
First time in my life I bought a car and paid it off. Other two cars I had in HS and college were bought used.
So, my $375 monthly payment is gone. Paid it off 16 months early. Now, do I need to apply for a title? Do I change insurance? What are the 'norms' in this instance? The car has about 65k miles on it and is in great condition. I financed a complete maintenance plan with Nissan when buying and have never had a hiccup on it. I am trying to make sure I am doing the right thing.
So, my $375 monthly payment is gone. Paid it off 16 months early. Now, do I need to apply for a title? Do I change insurance? What are the 'norms' in this instance? The car has about 65k miles on it and is in great condition. I financed a complete maintenance plan with Nissan when buying and have never had a hiccup on it. I am trying to make sure I am doing the right thing.
Posted on 6/16/15 at 10:37 pm to rpg37
Your insurance should be comp without collision coverage
Posted on 6/16/15 at 10:38 pm to Paul Allen
quote:
Your insurance should be comp without collision coverage
What exactly does that mean?
Posted on 6/16/15 at 11:39 pm to Paul Allen
quote:
Your insurance should be comp without collision coverage
Not necessarily.
Weigh out the cost to protect the vehicle versus the cost to replace it.
Under the cost to protect... include your collision premiums per year and add the collision deductible.
Posted on 6/16/15 at 11:42 pm to rpg37
quote:
What exactly does that mean?
Comp protects your car from what are typically not your fault and not someone else's fault occurrences. Hail, theft, vandalism, falling trees, hitting a dog/deer, etc.. This isn't expensive.
Collision covers other claims on your car (most often associated with driving and hitting something other than a live animal).
Safe drivers can avoid collusion claims, typically. Comp claims are being at the wrong place at the wrong time.
Posted on 6/16/15 at 11:47 pm to meansonny
Awesome, great info. What about my title now - what is the process of that? Will they just mail it to me, do I notify someone, etc?
Posted on 6/17/15 at 12:36 am to rpg37
I've always had mine mailed to me automatically and immediately.
If it doesn't come quickly, someone else may be able to offer advice.
If it doesn't come quickly, someone else may be able to offer advice.
Posted on 6/17/15 at 12:40 am to meansonny
Did you have to request it or was it sent automatically?
Posted on 6/17/15 at 7:28 am to rpg37
Make and model? I wouldn't drop comp/collision if the car is still worth a decent amount. If it's only worth $3k, I'd take my chances and drop it, but at $10k, I'd keep it just in case
Posted on 6/17/15 at 8:22 am to rpg37
I commend anyone who can pay their vehicle off early to avoid potential interest charges. however, always remember that there's no "building" equity in a vehicle. if you're vehicle is worth 10k this year, it will be worth 7500.00 next year.
enjoy "no notes", however.
enjoy "no notes", however.
Posted on 6/17/15 at 9:15 am to rpg37
And paid off early? That means you aren't living large enough. It's time to upgrade. Now, you need to go and trade that puppy in on something you don't need and really can't afford to maintain. Make sure your note is pretty high so you can't pay it off early this time. THAT is the American dream!
Posted on 6/17/15 at 9:32 am to rpg37
1) Congrats!
2) Start saving that $375 a month in a dedicated account somewhere so you can make a huge cash payment when you buy your next vehicle.
3) Title - depends on the state. Some states require a new title to be issued without the lienholder, others the title stays the same and the lienholder issues a letter releasing themselves from the title. Would not hurt to call the finance company and ask them when you will receive the paperwork.
4) Absolutely keep comprehensive. As far as collision, if you only have 65K miles on it, and you paid it off early, my guess is the car might still have a lot of value to it. Yes, collision is something you should be able to "control" but accidents happen even if you are a super safe driver... tires blow out, etc.
I would look at the actual cash value of your car, and if that number is a number that you can't easily replace with other savings... I'd keep the coverage until your savings go up and your ACV goes down.
2) Start saving that $375 a month in a dedicated account somewhere so you can make a huge cash payment when you buy your next vehicle.
3) Title - depends on the state. Some states require a new title to be issued without the lienholder, others the title stays the same and the lienholder issues a letter releasing themselves from the title. Would not hurt to call the finance company and ask them when you will receive the paperwork.
4) Absolutely keep comprehensive. As far as collision, if you only have 65K miles on it, and you paid it off early, my guess is the car might still have a lot of value to it. Yes, collision is something you should be able to "control" but accidents happen even if you are a super safe driver... tires blow out, etc.
I would look at the actual cash value of your car, and if that number is a number that you can't easily replace with other savings... I'd keep the coverage until your savings go up and your ACV goes down.
Posted on 6/17/15 at 10:20 am to tigerdup07
quote:
I commend anyone who can pay their vehicle off early to avoid potential interest charges. however, always remember that there's no "building" equity in a vehicle. if you're vehicle is worth 10k this year, it will be worth 7500.00 next year.
What the car is worth next year is completely irrelevant. What matters is the interest rate of the note, and the duration to a lesser extent.
Posted on 6/17/15 at 12:39 pm to LSUGUMBO
quote:
Make and model?
Not OT baller status I'm afraid...2012 Nissan Versa. I do so much driving I needed something more practical.
Posted on 6/17/15 at 12:55 pm to rpg37
Keep paying a note to yourself. Set up an auto-draft into a savings account as your car fund. The goal is to be able to buy your next car with cash. But also use this fund to pay for any unexpected high cost maintenance.
Every now and then, consider moving a chunk of the savings balance to a high dividend paying stock with a relatively stable stock price.
Every now and then, consider moving a chunk of the savings balance to a high dividend paying stock with a relatively stable stock price.
Posted on 6/17/15 at 12:56 pm to rpg37
Drive it till it dies. No payment for years.
Posted on 6/17/15 at 1:00 pm to rpg37
First this is open a savings accound (if you don't have one) and each month put the $375 into it. Save as much of your note as you can. That way when it comes time to buy a new car you will have a significant down payment.
Posted on 6/17/15 at 1:04 pm to rpg37
2012 Versa with 65k is probably worth 7-8k, depending on the trim level and condition. could be worth a decent bit more if you have a higher trim and some options and its in excellent condition. you can look it up on kbb
Personally, I wouldn't say you should definitely get rid of collision. You need to make the decision based on your finances.
For example, my car is worth ~10-11k, and I currently pay $77 for 6 months of collision coverage with a $500 deductible. To me, the $77 is pretty well worth it for the value that is still remaining in my car. I could afford putting $10k down on a new car if I really needed to, but I would definitely take a good hit on my savings. Once it drops down to 7500 or lower, I will may start considering removing collision, but $150/yr is still pretty cheap IMO.
If you are paying $100/month for collision, then yeah, I would strongly consider removing that coverage, but if it is cheap, then it may make sense to hold on to it for a little while longer.
Personally, I wouldn't say you should definitely get rid of collision. You need to make the decision based on your finances.
For example, my car is worth ~10-11k, and I currently pay $77 for 6 months of collision coverage with a $500 deductible. To me, the $77 is pretty well worth it for the value that is still remaining in my car. I could afford putting $10k down on a new car if I really needed to, but I would definitely take a good hit on my savings. Once it drops down to 7500 or lower, I will may start considering removing collision, but $150/yr is still pretty cheap IMO.
If you are paying $100/month for collision, then yeah, I would strongly consider removing that coverage, but if it is cheap, then it may make sense to hold on to it for a little while longer.
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