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Old 03-15-2009, 03:48 PM   #1
 
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Default Money question

DH lost his job in December and we will be receiving his pension check shortly. He found another job, so we don't need the pension to live on.

My question is about my car. I have a four-year-old Audi A4 that we re-financed to lower the payments. Because of the re-fi, we still have three years left of payments to make.

Does it make sense to pay off my car and save the monthly payments we would no longer be making? How long should we plan on keeping the car for that to make financial sense? The warranty just ran out on it, so any repairs will be out of pocket. I would like to keep the car as long as possible, but if we have more kids, it would probably be too small.

BTW, if we do pay off the car, we will still have plenty left from the pension for savings.
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Old 03-15-2009, 03:59 PM   #2
 
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I would pay off the car. Why have the debt if you don't have to have it? I prefer to be debt free.

How long should you keep the car? Until the repairs cost more money than it would make sense for the age of car or if the repairs start to cost more than buying a better car.
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Last edited by Windflower; 03-15-2009 at 04:02 PM.
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Old 03-15-2009, 04:08 PM   #3
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Paying off the car now will save you a lot of finance charges. Start setting part of the payment aside for future repairs. Keeping up on your oil changes and maintenance will help avoid potential troubles.
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Old 03-15-2009, 04:12 PM   #4
 
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Don't you have to pay a penalty and income tax if you don't put the pension check into an IRA? If so, it wouldn't make sense to pay off the loan.
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