Monday, February 22, 2016

I paid off my car loan!

Last month, I just finished my paying off the loan for my pre-owned car. Before the cap for borrowing had been set by law, I've already put in 50% down payment for it, so the amount of money that I borrowed is relatively low. Still, it's a great relief to have paid off something and have no debts.


Now, if only that car loan that I've just paid off is my housing loan, haha! Since I'm relatively happy and relieved that I've paid off my car loan, I can only imagine what happens if my housing loan is also paid off. I think it'll be like throwing huge burden off my shoulders. I guess that will be another 12 to 13 yrs away, provided I keep up with my yearly partial capital repayment plan.




I guess people are either comfortable with debts or they are not. I'm prefer not to have a huge overhead, since my income is variable and having a high fixed cost of living makes planning that bit more difficult. My wife's income is also variable, and not fixed, hence having some semblance of stability will be good for us.


Another thing that struck me is how fast 4 yrs had just flew by. 4 yrs is the duration of the loan, and that is the length of time I had my car for. Since the payment is on GIRO, it's amazing how month after month adds up to 48 months. 4 yrs of my life, and with a snap of my fingers, it's gone. I think my situation is much much better than 4 yrs ago, because back then I had just about bought my home and settled my renovation, so I'm relatively broke. I could pay off the car straight up, but I thought I should be a little conservative and borrow a sum so that my cash flow is a little less tight. The cost of having a less tight cash flow amounts to a cost of 1.2k over a period of 4 yrs, so I thought it's pretty reasonable.


I don't think I'll borrow for my next car. It'll be straight up cash from here.

18 comments :

Sillyinvestor said...

Yeah! congrats.

Next month, mine will be paid up too! hoho

No loan for me too, I am going to renew my COE

Singapore Man of Leisure said...

LP,

The wonderful feeling of "lightness" :)

Rolf Suey said...

Hi LP & SI,

Lucky guys! I had been driving my fourth car for almost twelve years now. Never able to finish the loan.
Had been spending crazily lots of money on car over the last decade or so! Though never regret.

I am putting up my car of almost 5yr old for sale now. Family getting too big and need a 7-seater.

Hope you finish your house loan soonest.

SI - power! Renew COE, meaning more than 10 yr car! Got Feeling ah....

Congrats!

la papillion said...

Hi SI,

Thanks :) Wah, you also another one haha! Are you going for 5 yrs or 10 yrs? My plan initially is for 10 yrs renewal, but not sure if my lao pok car can last another 10 yrs, haha

la papillion said...

Hi SMOL,

Yes! Walk also got wind. Well, small wind, haha!

la papillion said...

Hi Rolf,

Wah, 7 seater, Honda freed or a mini bus? lol

I think if some things only you know whether it's worth it or not. As financial blogger, well, we should be saying cars are depreciating asset blah blah, but I say KNOW YOURSELF lol

I also hope my housing loan can finish fast fast, that will be really walking with a lot of wind behind me!

temperament said...

We were/are very fortunate.
Our time HDB maisonette only cost about ??. --120K
We could pay outright with our CPF's O. A.
But we didn't.
My wife's company's offered a very attractive subsidised simple interest housing loan.
So our CPF's O. A. still earn interests enough to offset and then some comparing to the bank loan's interest.
The same thing we did with owning cars.

The moral of the story is indeed if you are debt free, your money will grow so much faster.
Now people pay you money on your money in so many ways possible, daily.
After 20 to 30 years, you will then know and may be surprised by what you have lol.
Try to be debt free if possible.
Of course, you may have many things you like later then right now is the price you have to pay.
But when you are there, you will realise, i never know it like this
Shalom.

Sanye ◎ 三页 said...

Congrats LP!

I should pay off my car loan in November this year. Like you I paid more than 50% when I bought my car, and took a small loan only to satisfy the criteria to get the discount.

la papillion said...

Hi temperament,

Wow, so good..have subsidised simple interest housing plan haha! I'm quite sure these days no such deals anymore :)

Money grows faster without debt, that's definitely the case. You don't have to pay others, so you end up with more disposable cash. Even without paying for my monthly car loans, I already feel shiok haha!

Thanks for sharing!

la papillion said...

Hi Sanye,

The mark of a cautious borrower - no need for govt to step in to control how much debt you can borrow, haha! It's to our advantage to borrow when we don't have to. But when we need to, it's either going to be too costly, or the banks will refuse to lend! Strange world we're living in, haha

Sillyinvestor said...

LP, I am going for 5 years. Think 10 years the maintainence will be high.

I ask the agent when I go servicing. What is the highest mileage for Toyota cars without risk of frequent maintainace,
Of course standard answer like depends how you drive, Blar Blar Blar ... But I managed to force out a 200k mileage agar agar.

2 years later. I should have 160k-180k mileage. So close to the "worry free"
Maintainace, 5 mover years who use be around 250k. Think gou Bei le

la papillion said...

Hi SI,

Oh, I heard about the 200k mileage thing too. You know for other countries, they used their cars for more than 10 yrs, maybe 15 to 20 yrs, also like that. So maybe it's a matter of heng suay lah. Some friends who bought resale kena maintenance issues every year, some (like me) have no major issues. I think if you're getting 5 yrs should be fine. My original plan is to get 10 yrs and bet that my maintenance is going to be cheaper than the cost of getting a resale + top up coe or a new car.

temperament said...

My car from my BIL has clocked 175K.
He is a mechanic from young.
His friend motor car workshop see a lot of continental cars
even less than 5,6 years.
i am going to renew for 5 years now though i know my car Honda 2000 c c can last another 10 years.
Because we hardly use the car.
It is a real luxury for us.
Besides by end of 2016, DTL 3 is just less than 100 yards downstairs.

la papillion said...

Hi temperament,

Hmm, you mean continental cars are not as long lasting as jap cars?

If you renew 5 yrs, after that die die have to scrap already. I really find this a waste. Scrapping a relatively 'new' car because of paper work..sigh

Anonymous said...

Better believe my BIL friend's WS.
Practical events don't lie.
Unless my BIL or his friend has an agenda.

Yes it is a watse if you renew Coe for 5 years and you are not allowed to renew after that.
But if you renew Coe for 10 years you are allowed to renew for another 10 years.
A lot of people find this is a very strange regulations from LTA lol.
That is you want to keep your car as an antique.

If not better aim for a newer car.
Some new car now has special technology that shut down the engine when you got jammed in traffic.
My BIL and me still trying to figure out what happens to the aircon then?
Run it with battery or what when engine shut down in traffic jam?
And shutting and starting the engine too much, won't the engine wear off faster?
This can also mean more normal car maintenance?
Anyway technology keeps on improving lah.

Edward James said...
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webbrowan said...
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