We paid off the car loan.
We wanted to share it, so I announced on Twitter last week that we had paid off our last car loan, leaving us with only student loan debt and a mortgage. Sweet!
I appreciate all the congrats tweets you guys sent back. (follow me @ptmoney)
It feels really good to have paid off this debt. The interest rate was just way too high. Now we can begin thinking about prepaying some of the student loan debt that’s been around way to long.
We have high hopes for being able to do that this year, but want to wait and see what happens with the baby. Things will change a bit, right?
Anyway, in a response to my tweet, @Finc_Confluence (who blogs at Financial Confluence) tweeted in with this excellent point about car insurance:
“Consider evaluating your Ins. coverage. Requirements are higher when there’s a lien on the vehicle. Now, you can decide!”
This is a great point. It got me thinking about all the other things you should do once you truly own your car:
1. Take Time to Celebrate
First, give yourself a good pat on the back for knocking out this debt. Consider a celebratory car wash and a photo op next to your car with the title in your hand. 😉
2. Give a New Purpose for the Old Debt Payment (Adjust Your Budget)
Since you no longer have that debt payment, make sure you designate a new home for that money. Don’t just let it get absorbed into your frivolous spending.
Decide whether you want to pay other debts with that money, or build up some savings? How great is it to have more breathing room in your budget!
If you can’t pay off your car loan and still have several years remaining, you might consider refinancing, which could save you money. If you refinance, you could use the savings to pay extra towards the principal on your new auto loan, or work on other debts on your debt snowball. Capital One offers a free online application that’s quick and easy. Check out their refinance calculator to estimate savings. Restrictions apply.
3. Get Your Title and Store It Safely
Getting your title once you pay off your loan can actually take a long time. So don’t put yourself in a situation where you need it fast (like selling the car).
Some states have the lien holder physically hold the title. If so, you’re likely to get it back faster. Once you get it, store it in your home safe…not in the car itself.
4. Enjoy Your Debt-Free Ride
Lastly, I’ll just add that you should count your blessings and soak up that paid off car feeling. That’s what I’m doing. With your new extra income, you could even afford to buy a flat screen TV.
5. Re-Evaluate Your Insurance Coverage
As mentioned above, your insurance coverage *could* be lowered. Call your agent and see what they can do. I recommend also running a quote to see if you can get more affordable auto insurance elsewhere:
Visit GEICO Car Insurance to get a free auto insurance quote today! Find out how much you could save.
Can you think of some other things to do when you pay off the car note?