20% car note

[Anonymous]

So I made a post in credit cards and I got a lot of good help, so I thought I would ask this here because I have been tangling with this decision..

Before I understood the importance of credit I had to buy a car and ended up with a 20% interest car note with Cap1. This loan is what started me to get educated on credit.

I owe still 3,500.

Also have a Schwab Brokerage account that returns anually 23% as of right now, a mix of tech stocks, utilities, an ETF, and a REIT.

Car runs great still, keep up on oil changes. Toyota Corolla and she purrs

I have to pay full coverage insurance also while the bank has it. I am very safe driver. Driving is my profession. Don't get in accidents except when teenagers rear end me because they are textings and taking selfies while driving.

There is 7k in my savings account, but I am also looking at a large dental bill of about 10k that needs to be addressed soon. But there is no immediate concerns that I know of.

I understand that this is limited information. But what I would be interested to know if you would pay off this note immediately or ride the payments

My question to anyone willing to answer and might have some input...

I put most of my free money into my brokerage and pay the minimum payment on my car. Overall is this wise due to my brokerage returning a higher percentage than the interest of my car note? I pay 377 a month on my car note and I have 3500 left. I could pay this off today but I don't like the idea dipping into my savings emergency fund. Also because I need to get my teeth fix and my wisdom teeth pulled sometime next year for sure.

Income fluxuates 70k-100k right now annual. Only other thing is an 8k student loan to school and get an education that never did me any good. But I have found my happy place now and happy to bring things close to you so you don't have to drive far to get stuff. That student loan 110 a month. Rent is 600 a month. I cannot justify a mortgage because I am only home 5 days a month. These loans still exist because I send money to 401k and Schwab for spending when I make it to retirement, if I make it, or whatever.

My issue for today, would you pay off the car note or ride the payments based off the limited info I gave you? I know it's not much I don't want you reading a novel and I wrote a lot and deleted a lot.

Thank you for reading. Stay warm.

[Anonymous]

Also my credit score is important because it has not always been good. Its at 700-710 I think between all 3 agencies. My parental units told me that the amount I have in my savings will impact my score. But I dont think I believe that. It sounds weird. Don't think TransUnion can see that. Am I wrong?

[TattnallTrio]

I would pay the auto loan off immediately! You should be able to swing $3,500 with your income and low expenses... even if you dip into your savings. I understand the rate of return on your investments, but why do you want to make Capital One richer? As far diversifying your types of credit, your student loans will count as an installment account. If you are insisting on hanging on to your savings incase of an emergency, then perhaps refinance the car with a credit union. 
Perhaps you can apply for CareCredit for your future dental bill. 

[Anonymous]

Paid off the car note. It's a done deal. Thanks for giving that nudge. 

[randomguy1]

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@Anonymous wrote:

Paid off the car note. It's a done deal. Thanks for giving that nudge. 

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Good for you for pulling the trigger so quickly.

IMHO, 20% interest IS an emergency. Especially if you have other means to keep you afloat if you need it (ex: cc) while you build back your emergency fund.

Suggest looking to an eliglbe HSA\FSA account. That would of been nice to have a tax deferred account on a 10k dental bill.

[satio]

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@Anonymous wrote:

Also my credit score is important because it has not always been good. Its at 700-710 I think between all 3 agencies. My parental units told me that the amount I have in my savings will impact my score. But I dont think I believe that. It sounds weird. Don't think TransUnion can see that. Am I wrong?

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The amount of money you have in a savings account has no bearing on your credit score.

Banks don't report account balance information for checking/savings/CDs to CRAs.

[Anonymous]

Paying off loan was a wise move.

You could now possibly lower your car ins also. You may still want full coverage,

but at a lower amount or a higher deductible. Perhaps keep all liability the same or higher.

Im sure it is higher due to youner age? but also due to using car for work.

btw, nice choice in car!

You can now funnel that car payment back into your savings each month, and since

the car payment would have lasted another year, then you should see more in the end with the interest saved and earned etc.

[Anonymous]

Eh, I'm 36 years old. Not that young, but not old either.

My six month premium is $549.00. That's full coverage, of course. It has uninsured motorist coverage, comprehensive, road service and rental.

I'm no insurance expert but 549.00 for all of that sounds fairly good. There's another car on my plan, but talking here about the one I just paid off.

[Anonymous]

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@Anonymous wrote:

Eh, I'm 36 years old. Not that young, but not old either.

My six month premium is $549.00. That's full coverage, of course. It has uninsured motorist coverage, comprehensive, road service and rental.

I'm no insurance expert but 549.00 for all of that sounds fairly good. There's another car on my plan, but talking here about the one I just paid off.

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Yeah that sounds pretty good generally.