Hi everyone,
My partner and I currently have 2 cars but I will be getting rid of mine since it is old, nearly worthless, and has issues, and we'll become a 1 car couple. Her car still has a $8000 car loan at 3.7% and no prepayment penalties. The car is valued at about $8000.
I have $8300 in Vanguard Taxable Account (VTSAX) and around $2000 in free cash. Monthly surplus of cash is around $500 which I invest in the taxable account. My total NW is $119,000.
I'll probably just pay $4000 and she'll pay the remaining $4000 since our finances are kept separate. I've never sold shares out of the Taxable account before and don't exactly understand the implications of that. Does it make sense to send whatever cash I have plus sell off shares to pay the loan right away or just send whatever cash I have free now plus $500-1000 each month until the loan is paid off in a few months?
I assume VTSAX makes over 3.7% but know the earnings are taxed when withdrawn. I realize it probably doesn't make much of a difference either way but am curious to know the answer. Thanks!