Extra payments vs modsss??

[rraayy3]

I am not criticizing you, just informing:

1. At some point you’re going to realize how lame it is to live at home
- unless you’re doing so to save for college/house/investments/etc.
- living at home so you can have a kewl car is not a good reason

2. That interest rate is absurd and you should be paying that off as fast as you can.

3. You have a Type R. You don’t need “mods”.

Pay the loan off ASAP, enjoy the car. The bank/finance department must’ve burst out laughing when you signed the paperwork - than loan is nauseating.

Pay it off, invest in index funds, be rich instead of looking rich. Enjoy the car

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[Hollywoo0220]

Hello everyone. First I will give a little background of my situation just to clarify anything, skip paragraph for the main question.
I just turned 20 years old last week. I had my type r for maybe almost 4 or 6 months now.. its pretty fucking crazy having it lol . I know what some of you guys are thinking like oh man whyyy. Or i'm just a spoiled kid and my mom bought me it, but no . I'm paying for it myself. Maybe I am a little spoiled though being the baby of 6 kids. I use to hang out with bad people when I was younger, smoking and drinking. But thankfully I grew out of all that and I learned alot of lessons from other people, such as dont have kids lol.
so all my money pretty much goes to my car and food. I'm not paying rent because my mom doesnt want me to move out being the last kid here lol

Should I make extra payments on my car to avoid interest or should I just relax and buy car parts?
Interest rate is at 8.6% for 72 month I financed 43500, I currently owe about 38,000.
Payment is 777 a month. I been doing about 1000-1300 a month.
I put it on an excell chart and if I make payments of 1500 a month I will save 6000 dollars over 3 years
I make about 550 a week.
Thanks for any advice.

Keep it stock.
Continue making your payments ($1K seems reasonable).
Refinance for 60months (no more than 2yrs from the vehicle production year) when your credit improves and you have established payment history - don't settle for anything less than the best financing APR you qualify for.

You won't be 20y/o forever - save a few $'s here and there; you already have a great vehicle.

 

[dgordon7]

rraay3 said it perfectly. No car is worth debt purgatory. Pay it down man.

I am not criticizing you, just informing:

1. At some point you’re going to realize how lame it is to live at home
- unless you’re doing so to save for college/house/investments/etc.
- living at home so you can have a kewl car is not a good reason

2. That interest rate is absurd and you should be paying that off as fast as you can.

3. You have a Type R. You don’t need “mods”.

Pay the loan off ASAP, enjoy the car. The bank/finance department must’ve burst out laughing when you signed the paperwork - than loan is nauseating.

Pay it off, invest in index funds, be rich instead of looking rich. Enjoy the car

 

[Hondaman_MI]

Try finding a credit union that offers interest rebate loans. Mine gives back 70% of interest each year.

 

[tinyman392]

Hello everyone. First I will give a little background of my situation just to clarify anything, skip paragraph for the main question.
I just turned 20 years old last week. I had my type r for maybe almost 4 or 6 months now.. its pretty fucking crazy having it lol . I know what some of you guys are thinking like oh man whyyy. Or i'm just a spoiled kid and my mom bought me it, but no . I'm paying for it myself. Maybe I am a little spoiled though being the baby of 6 kids. I use to hang out with bad people when I was younger, smoking and drinking. But thankfully I grew out of all that and I learned alot of lessons from other people, such as dont have kids lol.
so all my money pretty much goes to my car and food. I'm not paying rent because my mom doesnt want me to move out being the last kid here lol

Should I make extra payments on my car to avoid interest or should I just relax and buy car parts?
Interest rate is at 8.6% for 72 month I financed 43500, I currently owe about 38,000.
Payment is 777 a month. I been doing about 1000-1300 a month.
I put it on an excell chart and if I make payments of 1500 a month I will save 6000 dollars over 3 years
I make about 550 a week.
Thanks for any advice.

Just out of curiosity, did you try asking your parents to cosign? That's a really high interest rate. As for what to do with your money. With where you're at right now, I wouldn't buy car parts. If you had a cheaper car out of warranty, then maybe, but with the amount of dollar you have down on that car and your payments, I wouldn't do it.

What I do recommend you do money-wise is save a bit of that if you don't already. Rainy day fund isn't necessary until it is. I'd also see if you can find any investments you can make that could return, on average, more than what you pay in interest, if you can find that, definitely invest; this is difficult, possibly impossible with that high interest rate though. Otherwise putting a few hundred dollars towards your car loan wold be a wise choice. Another obvious one is if you have any other loans that are as high (or higher) than your car loan, pay those off first.

 

[jred721]

Pay it down as much as you can until you can refinance for a better rate. Trust me, you'll feel amazing when you finally own the car completely and don't owe a cent on it. Then once that happens sky is literally the limit and you can mod to your hearts content knowing your car is paid off.

 

[Gruber]

Your situation is much better than the Dr. Phil show I just watched last week... there were twin brothers, 24, living with their parents with no income to speak of and building some really very cool sports cars.
They already cost their parents about half a million dollars but mother was reluctant to evict them. Of course dr Phil called her an enabler......

You do have income, so if you only get rent from parents at 20 it's not so bad. But you will be a different man in six years when still paying the mortgage-sized payments.
8.6% may not be surprising in your situation, but in the absolute sense it is very high: my civicx loan is 0.8% for 3 years...

Btw, of course if you can pay more regularly it would be better to get instead a shorter loan with a lower APR.

 

[Flyingpiggie]

Definitely pay down the car...the money you save on interest, use it to buy new toys in the future =]. I pay about $1000 a month for my ctr to pay it off faster but i did put 15k down and my interest is 1.99% and i am financing it for only 3 years. Regardless if you can afford to pay off your car do it because you never know what will happen in the future.

 

[Nanook]

Just going to agree with everyone else. Pay as much as you can towards principal and get that sucker paid off. Use your spreadsheet to calculate how much you’ll save paying it off early and use that as a carrot. At that interest rate it will be significant.

I’m assuming the $550/week is after taxes. Your spending over a 1/3 of your income on a car. That’s a hard way to live. YOLO I know. At this point though. Enjoy the car and don’t accumulate anymore debt. The more money you can invest now the less you’ll have tork when you’re old!,

 

[jakdotdot]

777 x 72 = 55.9 You are paying M2 money for a f***ing Civic...

If you are going to keep making those larger payments, at least make sure that they are going towards the principle and not towards future payments.

Honestly, I'd recommend re-fi'ing or getting rid of the car.

 

[SCOPESYS]

I am not criticizing you, just informing:

1. At some point you’re going to realize how lame it is to live at home
- unless you’re doing so to save for college/house/investments/etc.
- living at home so you can have a kewl car is not a good reason

2. That interest rate is absurd and you should be paying that off as fast as you can.

3. You have a Type R. You don’t need “mods”.

Pay the loan off ASAP, enjoy the car. The bank/finance department must’ve burst out laughing when you signed the paperwork - than loan is nauseating.

Pay it off, invest in index funds, be rich instead of looking rich. Enjoy the car

The OP did not mention it, but their has to be someone else on that loan as well ? Mum maybe. Nobody should have given you a loan with only you signing, with a payment to income ratio that high.

Now that you have the R, I realize it will be very difficult to part with it .
So if you are going to keep it, work towards re-financing at a better rate.. maybe with a family member helping, so you get a lower interest rate.

If you are still at College, try to get into a course "Financing 101"

 

[JNRS]

I believe you should get rid of the vehicle and see if you could "downgrade" to an Si or something that is cheaper. Invest in yourself and the cars will come later. Don't let the fact that you are able to live rent free stop you from being financially responsible. This is my good deed for the day.

 

[racer]

Curious.. do you actually plan on keeping the car that long? Most folks ditch the cars much sooner... realistically, 6 years is a long time and depending how you drive/use it, ( if like me, I do 20K miles a year - for me its be 120,000 miles!) You will pay off the car and have little equity (or value) to roll into its replacement.. so the cycle continues.

Life changes.. you are 20.. maybe in 2 years you want to live on your own and that car payment could be killing you and you sell the car. Or you want a Truck that drives itself or.. so I don't know how much you want to spend on a car you aren't keeping forever.

I'd only pay it down if you could afford to. I like what others have said about paying down and refinancing. Ideally pay down enough so that you are not negative on the loan (ie, don't owe more than the car is worth!). I also like others suggestion of getting a more affordable car but then I'd sound like a parent.

$40K in car loan debt? imho, that's even worse than $40K in student loan debt (and if student loan debt is in your future, making a large car payment could be financially crushing, keeping you at home forever! )

Run another spreadsheet to (this is the old man in me).
What if you had a $25K Si at $300/mo and pocketed the balance.. for 6 years.. how much would you have?
Or if you did pay say, $500/mo rent to mom, how that would impact you?
Or if you "paid yourself" $500/mo to have some savings to move out and be on your own?
Or if you just saved $500 mo for 6 years and let time do the rest?

https://twocents.lifehacker.com/10-good-financial-rules-of-thumb-1668183707

$550/wk x 52wk = 28,500/yr. - so even if you paid your entire income to your car, that's nearly 1.5 years of income!

based on lifehacker 20/4/10 guidance - 10% of 28,5 is $2,850/yr on transport. The 750/mo is nearly 40%.

All that said, if the CTR is like crack, no one is going to stop you

 

[wuaname]

I see some bery helpful posts but stop grilling the poor guy. And look up interest rates comsidered high. I’ve seen people paying 15% -18% interest on people with scores in the 500’s or those “buy here pay here dealers im the “beep” part of town.

And to pay off the car as quick as possible as some suggest; well not a lot of people keep their cars forever so it wouldn’t make sense to pay it off; especially if in 6-12 months he can have some money to refi it at a lower rate and 48-60 months.

Enjoy your car OP.

 

[rraayy3]

I see some bery helpful posts but stop grilling the poor guy. And look up interest rates comsidered high. I’ve seen people paying 15% -18% interest on people with scores in the 500’s or those “buy here pay here dealers im the “beep” part of town.

And to pay off the car as quick as possible as some suggest; well not a lot of people keep their cars forever so it wouldn’t make sense to pay it off; especially if in 6-12 months he can have some money to refi it at a lower rate and 48-60 months.

Enjoy your car OP.

Other people being in worse positions doesn’t make this a good position. Essentially dumping all of your money into a car is a horrible financial decision ... much like the decisions those people paying 18% made to get them to that point

1. Paying the loan off = no debt > refinancing
2. This situation has being “upside down on a loan” written all over it

I love cars, my first car was literally the most expensive car I’ve ever owned (young and stupid/naive, lived at home, like the OP) and I sure wish I had done something else other than waste that stupid amount of money now.

When you get older, see how much girls care about your kewl car when you’re still living at home with mommy to make the payments or have ruined yourself financially for a car that’ll eventually be beat up or outdated.

Not trying to pile on, but I wish someone smacked me in the face with this perspective when I was your age and driving around in a luxury car. I make 5x as much money as I did then ... and yet I drive a honda Hatch sport for a fraction of the cost.

Love cars, but they are a horrible “asset”, and it is insane to tie up so much of your income in something that depreciates daily.

Idk if you’re a trust fund baby or not, but if you aren’t and you plan on/are currently in college and have loans you are literally drowning yourself in debt before your adult life even starts.

Short version: No modsss

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