5 Benefits From Paying Off Your Car
Back in June 2013, I hit one of many milestones that I am determined to hit in life. I paid off my 2007 Nissan Sentra. Til this day, I still celebrate and til this day, I still get peer pressure from friends and family that I should buy a new car. I have had Blueberry now for 8 years and counting and though it hasn't always been a pretty site (maintenance issues) it has been nothing but a huge blessing in my life!
In the interest of helping out others who have the same mindset, I am going to give you guys 5 benefits from paying your car off.
1. It Pays To Have Good Credit.
Though my car didn't go on my credit at the time due to where I purchased it, having good credit from paying your car off can take you a long way. It is the road map to saving interest on any big purchases in your future. Pay on time payments and pay a little extra as often as you can.
2. You Save Thousands Of Dollars
There are instances where people buy vehicles, keep them for a few months to a couple of years, then trade them in. Tax time is the biggest time of year where you will see new cars everywhere! Yes, you work hard for what you want. No, you don't have to always have the newest car or gadget just because the next person does. Phil LeBeau explains, "the average monthly payment for a new vehicle hit an all-time high of $515." Just think about it, saving that much per month and investing it can pay off in your future.
3. Your Priorities Are Aligned
I don't currently have children but if I did, my kids would come first. Making sure that they have a decent roof over their heads, food on the table, and clothes on their backs means so much more than keeping up with the Jones's. Set goals to benefit you and your family not those that you see on social media and want to impress.
4. More Bang For Your Budget
Once your car is paid off you have more wiggle room in your budget to start on your next set of goals. I'm not saying to wait until your car is paid off to tackle other goals. I am simply saying that you can put more towards your other goals without having to worry about a car note.
5. Your Insurance Obligation Decreases
State laws and your lender require that you have a certain amount of coverage on a new vehicle before driving it off of the lot due to liability purposes. When you pay off a car, you can opt out of these types of insurances which in turn can save you money.
Side note: Maintenance issues will happen, it's all apart of having a car. Trying to avoid paying for the issues by going to buy another car can cause you to be out of even more money. Open a maintenance fund and try not to touch it, your pockets will thank you later.