Well, sorta. Not really. We paid off our car loan, though! So we kind of bought a car from the bank. 🙂
We purchased our car in October of 2009. It’s a 2008 Hyundai Santa Fe, so a newer used car.
At one point I probably had hoped to avoid car loans in our lives, but a couple things convinced us otherwise. First of all, just a month prior we had difficulty renting a car on a trip out-of-state. We’d booked our rental reservation and had the credit available on our card (as well as the cash in our checking account), but when we were at the airport to pick up the car, the company “randomly” ran a credit check and denied us. The only thing we could think of that might’ve dinged us was a lack of long credit history. We were both 24 years old, and while we had just bought a house and paid 20% down on it, we didn’t have much else to show. So we thought by taking a mid-sized car loan (we put about 1/3 down on our Santa Fe) and paying it out over a few years, we could improve that aspect of our credit. Reason number two for borrowing money? We like having cash around. It makes us feel secure, plus of course, we like to spend it (on furniture, eating out, a trip to Europe). Even after our spending died down (right around the summer of 2010 when I stopped working full-time and we had our baby girl), the money we just used to pay off our loan sat in a “high-interest” savings account (woohoo, ING and their 1% return 😉 for months and months.
Why pay it off now? Lots of reasons! 🙂 We received a decent refund from our federal taxes, so our savings is cushioned. Car loans kinda stink…why pay interest when you don’t have to? And really, I’m just excited to see our monthly spending go down. Our $200 car payment came out of our secondary checking account, so it hardly even felt like we were spending it. But now that we’re not, we have $200 to send somewhere else each month. Maybe to our travel account? Or use it to re-do our deck this summer? Maybe put it towards retirement. And eventually we’ll need to start saving for our next car, because when we buy one in five years or whenever, it’ll be all in cash.
Here’s Mary and I after walking out of the bank yesterday. No more car loans!!!