Yes, We Paid Off The Tahoe

Fans of the Dave Ramsey Show probably recognized that line in the title. Dave’s got a few variations – pay off the Tahoe, amputate the Tahoe, etc. Over the last few weeks I’ve been hinting at how close we were to paying off my wife’s Tahoe (our family vehicle). My old van was paid off long ago, but our family ride has been dragging a debt payment behind it for the last four years. I’ve been personally dragging around car debt even longer, and I can’t tell you how good it felt to make the last payment on Friday.

It might not seem like a big deal to some, but for me it represents finally freeing ourselves of the bondage of car debt. It was a journey that’s taken over a decade. I’ve gone through the sordid history of my ill-conceived car purchases in the past in great detail, so I’ll simply summarize them here.

  • My first car was a 1985 Buick Century, handed down from my grandparents. It was a nice car, but it wasn’t a “cool” car, so I didn’t fully appreciate it as a teenager. However, it didn’t have a payment, and the insurance was relatively cheap, which is a big bonus for teenagers. I drove that Buick until the wheels fell off, almost quite literally. It developed serious electrical problems, and one night while parked in my dorm room parking lot in college it caught fire under the hood. We tried to replace some of the wiring, but it was cooked…literally.
  • At 21 years-old, and newly married, I leased a brand new Isuzu Rodeo. It was a stupid decision considering the annual salary I was earning at the time was only a fraction more than the lease amount!
  • At 26 years-old I was still driving the Rodeo, having paid off the lease by taking out another loan, extending the payments another three years.
  • At 27 years-old our family was growing, so we bought a used (the only thing smart about it) 2001 Chevy Tahoe. Since I still owed money on the Rodeo, the bank was nice enough to roll that into the loan for the Tahoe since the sellers were letting it go for far less than Kelly Blue Book.
  • After a number of months of trying to sell the Rodeo via private sale, I made the mistake of stopping by a car lot and started stalking a beautiful, gently used Chevy Silverado pickup truck. The salesman worked his magic and talked me into trading in the Rodeo and driving off with the Silverado (and even more car debt).
  • It only took a few months of making both payments for me to realize something had to give, and that something had to be my Silverado truck – as much as I loved that truck. I put a “For Sale” sign in the window, and advertised it in the local credit union bulletin. In two weeks she was being backed out of my driveway by the new owner for $1,000 less than what I paid.  I wrote that $1,000 off as stupid tax.

We diligently kept up payments on the Tahoe, but at some point I just got downright tired of having a car payment. I told my wife in April that I wanted to move the Tahoe up in our debt snowball, following what I now know to be the Debt Tsunami style of debt snowballing. It didn’t make sense mathematically, as it was an incredibly low interest rate, and it wasn’t our lowest balance. It was personal. I had decided we had been dragging around a car payment long enough, and since we were within a few thousand dollars of paying it off, I wanted to make a final push and be done with it.

Last Friday we did just that, making a final payoff of about $700, which I scrounged up from freelance work, and from Friday’s paycheck from my full-time gig. The budget will be a tighter for the next two weeks because it was a stretch to pay it off, but I couldn’t wait another two weeks. The instant I pressed “submit” for the final loan payment online I felt the load of eleven years of car debt being lifted.

Now I look forward to receiving the title from our credit union, and for the first time in my adult life, being car debt free. Dave Ramsey’s right; they do drive better when they aren’t towing a car payment!

Comments

  1. We have two cars and no car payments..our cars are “older” but we are thrilled to not have to pay every month for a piece of metal on wheels.

  2. Thats awesome! Congrats! I know the feeling exactly.. my husband and I paid off our van about 2 months ago.. and I just got the title in the mail last week. I cannot tell you what kind of excitement we get from knowing that we do not have a car payment. We are now focused on our credit card debt which will be done at the end of this year. Thanks for the great blog. I read it daily. It has helped keep my family on the right track:)

  3. Congratulations.

    Now it is imperative you continue making that payment amount to an account every month. This will assure you can repair or replace any car you have. $300 a month is $3,600 a year, in three years you could get a very nice used car.

  4. Congratulations! I know that’s got to be an incredible feeling.

    Like you, I’ve made a number of financially irresponsible moves with my cars over the last eleven years – most of them involving ever-increasing amounts of negative equity. Luckily, I wised up a couple years ago and began attacking my car debt with every spare cent – effectively tripling my payments.

    I now owe just a tad over $2,000 on a 2005 Mazda 3 (it’s worth approximately $10,000) and am on track to have it paid off in mid August, freeing myself from the bondage of eleven years of car debt.

    Knowing this milestone was right around the corner has made me rationalize the purchase of an $800 bike that I’ve had my eye on for quite some time. I actually went to check it out again yesterday afternoon and somehow, some way, I mustered the strength to walk out empty handed again. When I click that payment submit button for the last time in a couple months though, daddy’s getting a new toy :)

  5. @Rebecca: That’s exactly what we intend to do – continue paying the car payment every month. In fact, I’ve sending it to the same place, but instead of a loan it’s going into a savings account.

    @Jimmy: Good for you…that’s hard to do! I did the same think with a gently used Trek bike a coworker was getting rid of. And when my van died recently I started imagining commuting to work again with the bike, but decided it was cheaper to repair the van in the short term. Besides, I would still need something to commute in on bad weather days, and during the winter.

  6. We too paid our car off last Friday, doing the happy dance as we pressed that submit button for the last time! Thanks to Dave Ramsey and reading your daily blog we are about halfway through our debt tsumani snowball ( I LOVE that term)! Nothing feels better thatn seeing that debt shrink. Home equity loan, watch out!

  7. Congratulations.

    I think the day I paid of my last car loan was one of the happiest days of my life. Having the extra income each month is exhilarating.

    Its this extra income that keeps me from buying a new car.

    Every time I go into a car showroom and see the shiny new car with its new car smell and have the temptation to buy a car I think about that “extra income” I’m enjoying by not buying a new car.

    This allows me to walk out to my older, but still reliable car.

    I now drive cars until they fall apart.

    You are really smart in putting the extra money away in a savings account. Not only are you saving money but you’re also creating an emergency car repair fund for your paid off vehicle.

  8. I know that feeling FD. I made my last car payment in March. I clicked the submit button just before shutting down my computer for the night and I don’t think I’ve ever slept better than I did that night.
    The end of April saw that last of my consumer debt go away and not even that felt as good as getting rid of more than 20 years of car debt.
    I’ll let you know in the Spring of 2012 how being free of Mortgage debt feels.

  9. Congratulations! It is a wonderful feeling to drive vehicles that are paid for! About two years ago, we made our final car payment, and thanks to hard work (and a lot of penny-pinching) we were able to buy a new (to us) vehicle this week with CASH!

    We will never go back to a car payment. It’s so freeing to be debt-free!

    Enjoy your new debt-free ride!

  10. Congragulations!! I juggled a car payment on several vehicles for over 15 years. However, I paid off my 1999 Jeep Grand Cherokee last Jan 2008 –about 9 months earlier than the payoff date. Let me tell you — it felt awesome!! Especially since the economy was starting to tank!
    The funny thing is that I had always liked Chevy Tahoes. In 2007, I think it was, I went to a lot and was approved for a brand new Tahoe.I wanted it bad, but things definitely worked out for the best there. The payment would have have been through the roof and I cant imagine how much I would have spent on gas with gas prices spiking like they did –and are now. I just sold my Jeep on Craigslist and am now looking to downsize even more. Its crazy how quickly things can change!

  11. Congrats. I’m a big fan of paying the higher-interest loans first but there are times where it doesn’t really matter. If you can pay off the low-interest loan very quickly then there is nothing wrong with that strategy.

  12. My partner and I paid off our car recently as well. I agree, paying off high interest cards is important but let’s not forget the importance of paying off those things that are ‘personal.’ Sometimes, I think logic has to be shifted depending on the circumstances. Congrats.

  13. OH yeah! Good for you. I haven’t had a car payment in a long time. Basically because our home sits on two miles of gravel road that isn’t maintained the best and every car gets beat all to heck on the road. I’d get really bothered really quickly if I was dinging up a brand spanking new vehicle on our road AND having to make payments on it!

    I heard Dave Ramsey just the other day saying that a car payment is the trap of the middle class or something to that effect.

  14. The title is nice to get, but even better than that is the loan agreement with the big “PAID” stamp on it. I left that sit on my desk for a few weeks after paying off my Cherokee a few years ago. Yes, I still drive it – best car I even owned.

    Congrats on achieving your goal, FD.

  15. Congratulations Frugal Dad!!! I know how great it feels to no longer have a car payment. I never want another car payment. I paid off my car loan last year and it felt great.

    It felt extra special because not only had I paid off my current car, I’d also paid off all of the remaining debt from my old cars since I would buy a new car every two years or so and roll in the negative equity.

  16. Great to hear about your success! Can’t thank you enough for writing this blog. It has helped me avoid some mistakes myself and hearing about successes keeps me motivated!

  17. Congratulations!!! We are still so. far. away. from paying off our truck, and I agree that it’s probably one of the most emotional debts we have. I can’t wait to be done with the stupid payments!

  18. Congrats! I’m frequently giving folks similar advice as we get past what has become, for the Boomers and their progeny, the biggest financial burden they needlessly saddle themselves with (along with school loans).

  19. You simply have to be able say ‘no, thanks at that price’ at least once to the dealer. This gives them a strong message that you are serious about your research.

    You should also bring a piece of paper to the dealership and make sure you do all the math of the finance calculations yourself. The point is not that they will do the math wrong. The point is you will see exactly how the deal is structured. Do not be afraid to take the time to do this or look like a fool for mapping out your car deal in the dealership.

    My dad swears by this process, http://tinyurl.com/knflt6

  20. Congrats on getting that elephant off your back! And yes, there are definitely times that the “emotional baggage” connected with a debt is worth moving it to the top of the payoff list, regardless of the interest factor!

    Great feeling, isn’t it!

  21. i had a close call last friday I was thinking of selling my paid off 04 civic, to pay some other debts. so I went to a local dealership, unsure that I wanted another car payment. after several attempts to leave the dealership the sales manager finally talked me into what i considered a good deal. with my wife on board we signed papers on a beautiful 17k 2007 toyota tundra. the entire night i was sick at my stomach thinking WTF did i, we just do. In texas there is no law for right to recind when it comes to buying a car. After a sleepness night I deciding I would go back to the dealer ship and try to correct my wrong. I went in admitting that I was a moron and stupid, apologizing profusley, the sales manager was reluctant at first saying their policy they dont take back cars. I offer to pay any penelty he thought was reasonable. He walked away for about 5 minutes, and came back and told this was our lucky day, and agreed to take the car back. wooo that was close!!!!

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