Did you do extra payments. Who finally owns their Tacoma?

Pay a little extra in between payments, accidentally entered 4500$ when I actually wanted a $450 payment. So that mistake dropped the balance quite a bit and was on a ramen diet for 2 months.

 

I'm definitely in a hurry to pay it off. I've never done a car loan before and I don't like owing money.

 

Made extra payments in chunks with bonus money/savings as often as I could. Paid off in just under 2 years. Lived modestly to do it and it feels great.

 

Paid cash for my 2017 Tacoma.

 

Same boat. I am paid up 3 months ahead just incase I need to skip a month or something. I have got more than what I owe in savings but money isn't always this cheap to borrow. It's worth my interest rate to not deplete my savings, that money might be necessary for something else unforseen.

 

I make payments. But I’m halfway through. It’s all fun and games until your couch gets repo’ed

 

Can we discuss this a little further? If I make extra payments am I just makeing sure the bank gets all of the interest? If I pay extra each month tward the principal does my payoff amount go down faster? Does my monthy payment stay the same either way? The bank seems to like it when you make extra paynents. If I want extra money to go tward the principal I have to call them or else they just apply it to my next monthly payment.

 

I was starting to put $ away for a future purchase but then Toyota Canada offered 1.9% financing for 36 months so I pulled the trigger. I put $5000 down and gave them a '06 Volvo XC70 worth about $3-4000 wholesale. I ended up financing $39,530Cdn and cost of borrowing: total interest for 36 months will be $1,224.

I am retired and while I own a 2 bedroom condo with no mortgage, my monthly truck payments at $1140/mo are 2/3 of my verifiable pension income. So what are they doing lending me all this money?

Now, I did tell the salesman when we first met that I had a annuity coming due in Jan 2020 that will start paying me $2200/month, so I can afford the high monthly payments, but the dealer had no way of verifying this on their own and never asked me for any documentation regarding income or assets.

Reflecting on the above, I guess the high value retention of a used Tacoma, should they need to repossess, plus the value of my trade-in + down payment, means they still make $ once the dust settles and they sell the truck for a second time. And the sales manager, even in initial negotiations (that I walked away from) wanted confirmation that I was ok with paying $5000 down.

Me, I am just happy that I will eventually own a used vehicle with the highest used value retention in the car business (other than collector cars), should I decide to not keep it for 10+ years.

 

If I make extra payments am I just makeing sure the bank gets all of the interest? Yes, all you’re doing is prepaying interest.

If I pay extra each month tward the principal does my payoff amount go down faster? Yes

 

Depending upon who your loan is from, you should be able to specify how much of the extra goes straight to the principal each time you make a payment. That's how it has worked with every other car loan I've had in the past, and that's how it works with my home loan. Toyota Finance Services makes it inconvenient by insisting that principal-only payments be done by mail, so I guess most people say "ah, fuck it, the interest is low, why bother with that extra step?" and just keep using their online system. As I mentioned, I'm a year ahead in payments, so I think I'm taking the year off and splitting any extra cash towards my savings accounts and some principal-only payments.

 

Regarding your first point - again, I think that depends on the bank. Even with TFS I can easily determine that of my XXX.XX payment, YYY.YY is principal and ZZZ.ZZ is interest.

 

Paid cash and have done so for the past 20 years. Also have enough sense not to go crazy with mods. Learned not to do that 50 years ago. Yeah...I'm an old guy, but still am a truck/Harley guy too.

 

This^

I don’t like debt. Some times you can’t help it but I try to keep it to the minimum possible...

 

I did one payment of $33.5K.

 

Typically, when you pay on a loan, the majority of your payments goes to pay off the interest first. If you make extra payments towards principal, yes your loan will be paid off sooner. Insure there is no penalty for paying loan off sooner.

 

Thanks, Do you know if the monthly payment will go down if I pay extra each month on the principal?

 

Only 2 payments left on mine until it's paid off. I've been paying an extra $240 per month since I got the truck. Last time I paid off a car loan, my credit score went way down. I'm not looking forward to that. I've learned that the credit scoring system is a joke.

 

I always financed and paid the loans off early. Sometimes way early. I then drove the vehicle for a few years and banked the payments as if I was still making payments. When it was time to buy a new vehicle, I had the re-sale value of my used vehicle plus a healthy down payment. Over the course of 6 financed vehicles in 35ish years, I was able to pay cash for my '18 SR5. That's why leasing is such a bad idea. You pay and pay and don't have any value at the end of your lease term.

 

Very well written.

 

I agree mostly. However, if you have the cash and can use someone else's money for free instead of giving yours away, I do get the benefit.

I would say the key is all how much is stashed away for hard times versus how much is going each month to service those debts compared to how much is stashed away each month. Lets say you are paying $400 a month toward random interest free financing things plus your truck payment, but also saving $1,000 a month that you don't need and already have a years worth of liquid cash in emergency funds. It can still get out of hand though. Hard to manage perfectly.

I've also seen a guys wheels and tires get repo-ed on a 2006 Impala. They left it on blocks outside his work. So there is that.