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If you had...

June 18th, 2011 at 05:09 pm

85K in the bank, but a $15K truck loan and the need to purchase a car (new), would you use $35K to pay off the truck loan and $20K to purchase a car? Opinions please. I want to be completely debt free, except for the house.

7 Responses to “If you had...”

  1. North Georgia Gal Says:

    Are you paying more interest than you are earning on the money in the bank? That would be my deciding factor.

  2. bennyhoff Says:

    What you are considering (I think) is more of a cash flow question. It sounds like you are concerned if you lose a job perhaps? Because otherwise, if you are sure you want the car & truck, and if the money is earning near 0% (likely) why would you not use that money to pay off your (relatively) high cost debts? (Of course, looking at your info, the truck loan is at 0%, so I would definitely put the money towards the car, and just pay off the truck over the next three years)

    I'm in a similar situation btw. In my situation however, my money is tied up in CDs that won't mature until early next year, so I need to work on how do I want to finance the car for the approx. 8 months until my funds are freed up.

  3. creditcardfree Says:

    Yes, I think I would, pay the truck off and buy the new vehicle, unless the cash was earmarked for something else, or needed entirely as an emergency fund (especially if you own your own business).

    $50K is still a pretty hefty emergency fund. And then your complete focus, can be the house.

  4. LuckyRobin Says:

    I agree with Single Guy. Since the truck is 0% interest, I'd just use cash to buy the car and continue paying the truck loan as is. Unless it's psychological and you feel like you need to get rid of the debt. That would leave you with $65K in the bank.

  5. NJDebbie Says:

    Thanks all of you for taking the time to give me your opinion. I really appreciated!

  6. Ima saver Says:

    I agree with single guy too!

  7. fruitbowlk Says:

    $20K to purchase a car? Is too much money. You can get one for much cheaper than that.

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