Dilemma: Payoff car or student loan first?? Liability vs Full coverage??

[why?]

Originally Posted by Tcoat

Depends on who and where you are. I pay less for this than I did my Lancers. The wife's new Impreza cost more. I doubt that it is much ore that slightly above average for most people. It is individuals that cost more for insurance not the car.

part of that is true, part of it is the state you live in too. Or country in Canada's case. Then again my other car is a 2007 Yaris.

[LudwigMiles]

How can you decline collision on a financed car?
Like others said, you don't have a choice.

You want to do the smart thing? How in love are you with this car?
What do you think about selling it, paying down your student debt, and driving a beater for a few years?

[Syche]

well id pay the highest intrest on off first, then work on the second. but thats just me. In canada we have a really different student debt structure, its still highway robbery but they wait till your out of school and give you a six month grace period before you have to start repayment. I would suggest looking at your option with more scrutiny before making that decision.

Also keep the coverage, I literally couldnt begin to tell you how many people i know who wished they did. for reasons that were deemed their fault by insurance but were not.

[Syche]

Remember kids the bank and the insurance company arent your friends.

they will take turns bending you over any chance they get.

[Syche]

also @why? I love your pic. I am watching kenshin right now to be honest.

[max20s14]

Originally Posted by LudwigMiles

How can you decline collision on a financed car?
Like others said, you don't have a choice.

You want to do the smart thing? How in love are you with this car?
What do you think about selling it, paying down your student debt, and driving a beater for a few years?

You didn't read

[palanza87]

always pay off ur highest interest rate first. thats basically it

[Jordanwolf]

Originally Posted by Syche

well id pay the highest intrest on off first, then work on the second. but thats just me. In canada we have a really different student debt structure, its still highway robbery but they wait till your out of school and give you a six month grace period before you have to start repayment. I would suggest looking at your option with more scrutiny before making that decision.

Also keep the coverage, I literally couldnt begin to tell you how many people i know who wished they did. for reasons that were deemed their fault by insurance but were not.

That six month grace period isn't real because they accumulate interest on each of those months while not having to make payments.

[mav1178]

Originally Posted by max20s14

You didn't read

best thing I've read all day.

[LudwigMiles]

Originally Posted by mav1178

best thing I've read all day.

Reflects the caliber of your reading choices.

[mav1178]

Originally Posted by LudwigMiles

Reflects the caliber of your reading choices.

Says the person who couldn't read the original post properly and answered the question completely out of context.

Tell me, what part of your answer was relevant to OP? He only considered moving to liability only after paying off his car, which he stated in his post.

Tell me, smart one...

[Kriz]

Student loan and pay it off asap, so the 4% on 22k won't hurt you for that long compared to half of the money and half of the rate. Don't get confused because you have to pay more for the car loan than the student loan.

You get the insurance coverage for what you're paying for, so I wouldn't say $140/mo is a total waste. Nobody knows what's going to happen.

It's just my opinion, I don't have the right to tell you what to do lol

[max20s14]

Originally Posted by Kriz

Student loan and pay it off asap, so the 4% on 22k won't hurt you for that long compared to half of the money and half of the rate. Don't get confused because you have to pay more for the car loan than the student loan.

You get the insurance coverage for what you're paying for, so I wouldn't say $140/mo is a total waste. Nobody knows what's going to happen.

It's just my opinion, I don't have the right to tell you what to do lol

This is most likely the route I will take

[Dake]

I may have missed it, but there's not enough info to make a true comparison if you want to look at the dollars involved. We need to know how many months (years) remain on both the loans.

That being said, both the car and your student loan are compounding interest loans. Your car has less financed at a lower rate and most likely a shorter term. Your student loans are a higher amount and rate and probably a longer term. That means spending the money now to pay down the student loans will save you quite a bit of money in the long run compared to doing the same with the car, even when factoring in decreased insurance costs (which others have mentioned, includes gambling on no accidents). If you have the money to do so, I'd highly recommend paying off the student loans. Don't zero out your account to do it - leave a grand or so for emergencies - but it will save you a chunk of change at the end. If you really want to go nuts, make it a loan to yourself at the same rates. Once you've paid off the loan, start making the same loan payments back into your bank account. That way YOU are making the money on interest instead of the bank.

The only monkey-wrench in all of this is how far into your loans you already are. Most car loans especially are structured to get as much interest as possible early on. If you look at your statement you'll see that a lower percentage of your payment goes towards lowering the premium. If you're past the half-way mark in your loans, you may not see as big of a benefit because the bank has already collected a lot of their interest (but you should still see it).

As for full coverage vs liability, it's a personal decision. I've always felt it's worth keeping full coverage until I get the car's value down to a point where I could easily replace it. Spending a grand a year on insurance for a car with a $15k value? Sure. A $5k value? Not so much.