alexseanchai: Blue and purple lightning (Default)
[personal profile] alexseanchai posting in [community profile] actyourwage
I am getting a more substantial federal tax refund than I expected. MUCH more substantial. To the tune of, once I subtract what I'll need to put in savings to get that account over a grand, I can pay off my car. Or I can pay off my highest-interest-lowest-balance credit card and a substantial fraction of the next-highest-interest card.

I very badly want my dad's name off my car title, which I can't ask him for until I can prove his name's off my car loan. My last payment, if I don't lump-sum it when the refund shows, is in May. That payment is twice my next biggest loan payment, so the sooner I can use that part of the budget for other things, the better. On the other hand, the credit cards I'll pay if I don't pay off the car are the same ones I'd be paying with the ex-car-payment money if I do pay off the car, and the interest rates on those cards are about twice the rate on the car loan.

Opinions?

(It would be bad of me to buy the learn-to-piano software I want and the learn-to-sing software I want and the cute fannish denim jacket I want with some of the refund money, yes? It would be okay of me to buy one of these things, or a couple books adding up to the same dollar figure, with some of the refund money, yes?)

ETA: I asked my mother, she asked my father, and he says if he's not on the title, I can't be on the family insurance. Solo auto insurance is probably more expensive. I'll have the money for it, given the reduction in monthly total loan payments, but.

ETA2: Looks like a solo policy through my family's insurance company, assuming the same level of coverage as now and no loan on the car, will cost two-thirds my share of the family policy. The difference in a month's premium comes very nearly as high as what I'd save on interest by paying the credit cards; two months, I'm making money. Sold.

(no subject)

Date: 2013-02-02 07:35 am (UTC)
jamethiel: A common kingfisher sits on a branch with a background of green foliage. (Default)
From: [personal profile] jamethiel
Paying off any kind of debt is all good. At this stage, it's what's going to make you feel better. It sounds like just being able to have that security of the car in your name will do that.

(no subject)

Date: 2013-02-02 08:29 am (UTC)
beatrice_otter: Radek Zelenka--sometimes what you need is a scruffy man with a flashlight (Scruffy man with flashlight)
From: [personal profile] beatrice_otter
I would keep the "buy something fun" purchase as small as possible, which you already know. As for car-vs.-credit cards, hm. There is financial benefit to paying more off credit cards with higher interest, but there is peace-of-mind value in having the car actually paid off and in your own name so that nothing hinky can happen there. Don't discount the psychological value of having something paid off, and rolling over the normal payment amount from that will help pay off the other debts faster. OTOH, saving on interest for the credit card may be more valuable to you than the psych value of paying off the car. (This is, of course, assuming you trust your dad not to do anything hinky that will cause you problems with the car. If there's any doubt there, get it in your name ASAP.)

Not much help there, I guess.

(no subject)

Date: 2013-02-02 11:22 am (UTC)
vass: A sepia-toned line-drawing of a man in naval uniform dancing a hornpipe, his crotch prominent (Default)
From: [personal profile] vass
It sounds to me like what you're weighing is how badly you want the car paid off, as measured in the amount of extra interest you'd pay by not paying the cards off first. If you want the car paid off badly enough that you're prepared to pay more in credit card interest, that's a valid decision provided you're making it consciously. Either way, this is a good problem to have!

(no subject)

Date: 2013-02-02 10:58 pm (UTC)
lassarina: I'm not coming out until the stupid people have gone away.  ....I can wait all day. (Default)
From: [personal profile] lassarina
The "can't be on the family insurance" thing seems a bit hinky to me, given I stayed on my parents' insurance for years after I sold the car in my mother's name (with her full knowledge and blessing as confirmed by a signature on a limited power of attorney) and bought one in my own, solo, nobody else on the loan or the title.

(no subject)

Date: 2013-02-02 02:20 pm (UTC)
silveraspen: silver trees against a blue sky background (Default)
From: [personal profile] silveraspen
I would pay off the credit cards, do a small "something for yourself" purchase, and spend the time between now and May investigating independent car insurance options.

(no subject)

Date: 2013-02-02 03:13 pm (UTC)
scheherezhad: fanart of Bart hugging Siberian Husky!Gar (Default)
From: [personal profile] scheherezhad
This is pretty much what I was thinking.

(no subject)

Date: 2013-02-02 11:49 pm (UTC)
drunkoffthestars: (Default)
From: [personal profile] drunkoffthestars
late to the party, but if you can keep a bit of the money behind and pay your new car insurance in 6-month lump-sums instead of monthly installments, you can save a little bit of money on that one.

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