2million - My Journey to Financial Freedom

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Thursday, October 06, 2005

Finally finished paying off my car loan! Whats next?

Well I have finally done it. After 4 years and $8250, I have finally finished paying back my parents for my car.

Back in 1999, I came home from grad school for Memorial Day weekend to find my parents ready to take me car shopping - they were going to take back the car they were letting me use so they could give it to my sister and they were going to help me buy a car that weekend. By the end of the weekend I ended up with a 1998 Nissan Sentra. I paid out $5000 in savings that I had, and my parents paid for the rest of the car as a "loan" to me that I would repay along with the insurance premiums once I started working.

By the time I started working in 8/2001 the tab was $8250.

Car Loan Payments

Date

Amount

11/26/2001

$ 150.00

1/23/2002

$ 900.00

10/29/2003

$ 900.00

1/20/2004

$ 900.00

5/7/2004

$ 900.00

9/24/2004

$ 900.00

12/6/2004

$ 900.00

5/19/2005

$ 900.00

8/2/2005

$ 300.00

9/2/2005

$ 500.00

9/16/2005

$ 500.00

10/3/2005

$ 500.00

Grand Total

$8,250.00



I am very grateful for the "free" loan from my parents as well as the flexibility they allowed me to pay it back. You'll notice a gap of over 1 year in my payments that allowed me to focus on saving for a down payment for the house I purchased in 8/2002.

After some thought my current plan is to keep my car for 5 more years which I hope will allow me to save enough money to purchase my next car outright. I will begin to save $250/mo to put away for my next car. Over the next 5 years that should amount to $15000 plus interest for my next car. As I get closer to the time to buy my next car I plan to fine tune this savings target to ensure I have the amount I need to buy my next vehicle.

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