Pay off car or use it for down payment??

[Sparks24]

Hi all,
I was just wondering; would it be better to pay off one of my cars or use that money as a down payment on car #2? DH is deployed so I am going to put as much money as I can into the Deployment Savings Program so it can gain interest while he is gone. By the time he gets back we should have around $10,000. I was origninally going to use it as a down payment for the car DH wants so that the payments would be around $300.00. Without this they will probably be around $500.00-600.00 per month. However I could also use that money to pay off my vehicle for which the current payment is $300.00. I am leaning towards paying off my car so at least I will own something and won't have the pressure of two car payments, even though the budget remains about the same. Please advise...

[gunsgirl]

this is hard for me because I cannot see paying 5-600 dollars a month for 1 car payment-
even after a 10,000 dollar down payment.

but personal oppinion of choice of cars aside- it will be a wash- I would say wait and since you will have to save it til he comes home to decide- look at the interest rates of both vehicles before deciding to use it as a down payment or pay off.

[Sparks24]

If I used the money for a down payment the car payement would be $300.00 a month, without a down payment $500.00-600.00.. I can't see myself spending that much after a $10,000 down payment either.

[gunsgirl]

yes, but like you stated- 300 dollar car payment for the one you have, and 300 dollars for the once you want with down payment = 600 dollars.

so paying off the 300 dollar car will still give you a 600 dollar car payment a month.


DH and I bought 2 brand new cars 3 days apart-

both 2008's we both had trades and down payments- my payment for my brand new car 225- his 126 a month for fully loaded vehicles.

[miamoa2002]

Doesn't it also has to do with the term of the loan. My husbands car we bought and paid of in 3 years and our car payment was maybe 600 a month (0% interest). My new car was only 15k so we paid that one in cash.
How long do you have left on your car? How long are you taking the new car loan on?

[Sparks24]

Originally Posted by gunsgirl yes, but like you stated- 300 dollar car payment for the one you have, and 300 dollars for the once you want with down payment = 600 dollars. so paying off the 300 dollar car will still give you a 600 dollar car payment a month. DH and I bought 2 brand new cars 3 days apart- both 2008's we both had trades and down payments- my payment for my brand new car 225- his 126 a month for fully loaded vehicles.

Wow that is awesome!!! They must have been some nice trade ins.. The value of my vehicle as plummeted because of the new hybrids and the poor market for SUVs. I owe roughly $5,000 more on the loan then it is worth.


I have 4 1/2 years left to pay on the SUV because I had to refinance it to bring it to Germany. I was hoping on getting a 60 month loan on the new vehicle.

[OliveJuice]

Use the money to pay off your car. It will look better on your credit and that could possibly effect your interest rate when getting the new car. IMO

[fitmommyof4]

I say pay off your car and then convince DH to get a cheaper car. $600 a month for a car payment is a lot!

[tawny]

Originally Posted by fitmommyof4 I say pay off your car and then convince DH to get a cheaper car. $600 a month for a car payment is a lot!

IAWT.

[itsalwaysme]

I would pay off the first car. Having 1 car payment is nice =)