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Paid off my car today...what next?
Posted by rpg37 on 6/16/15 at 10:31 pm00
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.
re: Paid off my car today...what next?Posted by Paul Allen on 6/16/15 at 10:37 pm to rpg37
Your insurance should be comp without collision coverage
re: Paid off my car today...what next?Posted by rpg37 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?
re: Paid off my car today...what next?Posted by meansonny 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.
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.
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re: Paid off my car today...what next?Posted by tigerdup07 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.
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!
re: Paid off my car today...what next?Posted by LSUFanHouston 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.
re: Paid off my car today...what next?Posted by LSUtoOmaha 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.
re: Paid off my car today...what next?Posted by Willie Stroker 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.
re: Paid off my car today...what next?Posted by Armymann50 on 6/17/15 at 12:56 pm to rpg37
Drive it till it dies. No payment for years.
re: Paid off my car today...what next?Posted by JOJO Hammer 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.
re: Paid off my car today...what next?Posted by kennypowers816 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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