A tale of 253

For good or for bad, I bought a new vehicle last year. Not just new to me, but new new. This was a first (and probably only) for me. My old vehicle was costing between $1000 and $2000 a year in repairs (and was worth only $1400  in trade in value). It was not economical or safe to keep it any longer.

After long deliberation I bought a new  new vehicle with a just under $30,000 tag after cash back, trade in etc. I will never own anything this expensive again aside from my house, I am sure.

It is a five year loan at 7.6% interest. That means 60 months. We had done the math out when I was buying it and the 0% for three years ended up being more expensive than the 7.6% with big cash back so that is the route we took.

I accept that I could have bought a new to me vehicle for less. After years of breaking down on highways and in storms and paying through the nose, the idea of a 5 year extended warrantee made me feel very happy.

I could have bought a less expensive new new vehicle but finding one that met our height needs, our storage needs etc was tricky. I did not want another van. I was really just not ready for a car yet and the storage in it was iffy. We already have a truck so that was out. So mid sized SUV it is.

The way this 5 year loan plays out, I would be done paying it when my son finishes his first year of university. Let's face it. When he's in university, I am going to need that $591 a month :-) So obviously, I need to cut at least one year off that loan by paying lump sums as often as I can. Not only do I save a year, I'll save INTEREST for that year and lil bits of interest each month that I pay a lump sum.

After the success of my lump sums and my consolidated loan, I am excited to tackle this vehicle loan the same way.

As of my end of June paycheck, I will regularly be able to whap down $279 + $80 = $359 on this loan. I have it all prettily budgeted in. It will be great fun to see how this affects the amount of interest they charge me each month and how quickly I can make those months remaining cut down.

As of now I have 50 months remaining. Scary. Yesterday I took down a snowflake of $100 to do the very first lump sum payment on this loan. The teller was very experienced ( I know her) yet she said she's probably only done lump sums about 4 times in her years of banking. That says a lot about how many folk just pay the monthly and don't work to get it done early.  She asked another teller and they figured it out. wheeee

I was excited about the $100 but then I realized that with $25 300ish left on my loan, that would mean I would have to do this 253 times. Now obviously, more will come off with my regular payments, and more will come off with the regular extra payments starting in June, but boy, 253 is a lot of $100 payments.

On my goal page for this year, I expressed a desire to pay down $1500 extra on this. I feel quite comfortable I can reach this and then some, barring unforseen circumstances.