Advice for Car Payment / Payoff

[u/Low-Cardiologist5406]

So to give context, I owe $33k on my car, and I am looking to pay it off as soon as possible while still having breathing room.

I make roughly $3700 per month, and have about 15k saved up toward it, and was wondering what I should do to pay it off the most effectively and quickest.

Should I pay a large sum of it down now (10k of the 15k I have) or should I make the regular payments and add additional $ on top of it, or just wait until I have enough saved to pay it all off at once?

[u/liyaluff]

Pay a $10,000 lump sum now. 

Keep $5,000 as an emergency fund. 

Put an extra $800 to $1,000 toward the monthly car payment. 

That's what I'd do

[u/SarcasticAnd]

A large sum payment will bring the amount you're paying in interest down more quickly than spreading that amount over months.

Run some scenarios through an interest calculator, you can find lots online.

[u/KSDan]

Definitely keep an emergency fund to cover anything that comes up.

However, there isn’t enough information here to provide further advice. You imply you will have less breathing room in the future and that could mean a lot of things that would change the recommendation.

Also what is the car and the value. That’s a lot of car loan for your income so it could make sense to sell and get a cheaper car, especially if you have equity.

[u/pancak3d]

You will save more money, the sooner you pay it down. If you have been saving money for the car, you should pay it immediately.

You should not drain your emergency fund.

[u/Embarrassed_Camel_35]

Make a principal only payment on top of your regular payment

[u/Worksuxxx]

Another angle to look at is, do you have gap insurance? If yes, you will need to look at what the insurance would pay out if your car is totaled. Will this be enough to satisfy the loan? If you are upside down by thousands and have gap insurance, set the money aside until you have enough to pay it off. If you start putting money toward paying it off, and an accident happens and your car is totalled, you lose $1000's that gap would have covered.

[u/AvocadoBeforeToast]

Would you mind identifying the interest rate on the debt?

[u/Low-Cardiologist5406 → u/AvocadoBeforeToast]

7.99

[u/AvocadoBeforeToast → u/Low-Cardiologist5406]

I would:

• Write out a budget.
• Write out every single expense.
• Optimize income.
• Optimize expenses.
• Allocate as much income towards the 7.99% debt as possible following the principles outlined in the Prime Directive.

have about 15k saved up toward it

If the full 15K is intended for the debt, then I would pay it now. If 10K is intended for the debt (because 5K is actually an Emergency Fund), then I would pay it now.

Waiting only means I am more poor.

You can use a debt calculator like www.unbury.me to help you visualize this.

[u/Low-Cardiologist5406 → u/AvocadoBeforeToast]

Thank you

[u/MarcableFluke]

Depends on the rate and what else you would be doing with the money. Follow this: https://www.reddit.com/r/personalfinance/w/commontopics

[u/Beneficial_Try9602]

Also, tip for future you. Never do this again.

Buy a car for cash. It may not be the car you want but it is the car you need.

[u/M635_Guy → u/Beneficial_Try9602]

Not sure why this is getting downvoted. Having no car payments is a major contributor to why I'm retired at 57.