I paid off my car loan today.
OK so I know, I know, car loans are bad. This one was even worse -
- Bought a brand new car at the end of January 2020. Yep. Followed by a month of international travel, and immediately after that... 2 years of lockdowns. I think my brand new baby has about 2,500 miles on it lol. If you want advice on how to perfectly time your bad financial decisions, ask me!
- Traded my previous car in, which wasn't very old (8 years) and working just fine. Could have sold it for a couple $k more, too.
- So WTF did I need a new car for, uh? I didn't. I wanted one with all the security bells and whistles and bluetooth and Apple Car.
- I totally could have paid cash. I financed about 2/3 of the total price because (1) I didn't want to pull more money out of my index funds, and (2) I wanted to improve my credit score.
Shoot me all of your face punches, people, I deserve them.
So, while I have zero regrets (I really love my car and I stand by my reasons to finance it at the time - I made more in the market in those 2 years than I paid interest, even though I lost more in opportunity cost.), this thing was rubbing me the wrong way. As much as I can rationalize it, I don't like having debts.
Yesterday I TLH'd my bond fund, and was wondering what the heck to do with that money. Buy another bond fund now? keep it in cash for a while? Buy stocks to keep bonds in my 401(k) and nowhere else?
That's when I decided to finally scratch the itch and get rid of the loan, halfway through its life. Only needed to withdraw about $5k from that pool of cash. Figured it was worth it - not to mention, the loan was 3.35% and it's going to be a good while until bonds start yielding that again.
Small celebration, but BOY does it feel good. You know, like that itch in your back that you FINALLY managed to scratch.