There’s nothing wrong with driving a nice car, but I do recommend that you pay it off quickly, and drive it for 8-10 years. You may have to spend a little bit to keep it going, but as long as that accumulated cost is less than the cost of a new car (the full cost, not the payment), you’re in good shape.
This simple car payoff calculator will help you determine what your payments will need to be in order to pay your car off within your ideal time frame.
Play around with each field to see how they affect your payment amount. As a personal rule, I don’t like to keep short-term debt around for more than two years, and I’d even recommend paying it off much quicker if possible.
What’s the Next Step?
Once you’ve figured out how much you need to pay in order to eliminate your car payment, the next step is to completely automate this process. Automation eliminates the possibility that you will miss a payment, and increases follow through to almost 100%.
Set it up once, and watch your car be paid off while you worry about the more important things in your life.
Grab the Financial Automation Checklist Collection and check out the “Paying Down Debt” section to set this process up for yourself. I’ll also show you a free video with how to set up your first automated payment.
Did you find the Car Payoff Calculator tool helpful?
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