I've decided to keep it.
* Used cars in my area are more expensive than I expected. there aren't great deals to be had. but I think after adjusting for mileage I’m complicating my life to save a few thousand over the next 10-15 years.
* It’s true I could save ~$500/year on insurance
Most importantly though, I’m really glad some of you wisely reminded me to ask myself whether I ENJOYED my car. Turns out I really do and the exercise of coming up with reasons why made me feel thankful for having it and at peace with the expense.
The thing I’m still unsure about is whether to pay it off right away or keep paying the loan. The loan interest rate at 1.9% is just barely above the inflation rate of 1.81% of last year and lower than the inflation rates of 2017 and 2018. The return of Vanguard Target 2060 funds is 2-3x higher than that. Other than potential peace-of-mind benefits or risk mitigation is there any financial benefit of paying it off at this point?
You made a good decision. A few thoughts...
- You are correct that used car prices are high and there aren't great deals to be had.
Buying new is great way to go if you aggressively negotiate the price and keep it for 10-15 years. You can simplify your life greatly by doing this AND can actually save money vs buying multiple used vehicles during the same time period.
- I don't know where you live, but it sounds like you are paying WAY too much for auto insurance.
I'm paying $459 PER YEAR, for full coverage on TWO nearly new vehicles, a 2018 and 2019 model.
- Agree with your comment on enjoying the car.
If you have the means to comfortably purchase the car you love, then why make yourself miserable driving a decade old shit box?
- Regarding the auto loan...PAY IT OFF.
Your OP said the interest rate was 2.9%. Now you're saying it is 1.9%. At 2.9%, the total cost of the vehicle will end up being over $30K, not $28K.
Besides, you don't have those funds currently invested, do you? I assume it is part of your emergency fund/cash cushion/ect, which doesn't get invested.