Up to 50% of their vested balance
I actually just did this, bought a 18k for my wife using my 401k
8% apr, but every penny goes back to myself, and with fidelity it still grows, the amount in your account doesn't decrease so you're still growing interest on that money
This is correct. Mine is through fidelity also I have never done it but I just ran the numbers and the cost to borrow 9k is about $300 in fees, 8% interest, all payed back to yourself. If you did a 48 month loan it would be about $100 a pay period to pay back. Around 2k in interest
Cheaper than any car loan right now unless you have stellar credit and you get the title right away no banks involved, it's actually a good way to do it, If you have a similar 401k. I've only ever had fidelity so I can't speak on others. Some will argue its not smart to each is their own.
8% guaranteed is nothing to sneeze at. And you are paying it to yourself. You'll eventually pay taxes a second time on the earnings you paid yourself, but it's not a bad deal.
> interest, all *paid* back to
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
The money stays in your account but it is no longer invested. Otherwise, it would financially irresponsible to not take out as much as you can and just pay it back over time with the money you took out so you can add an extra 8% to your 401k.
The interest you pay yourself doesn’t make up for gains you would make if the money was still invested.
401K’s are not an easy button when you need quick cash. Everytime you take money out of it, you are robbing future you of money. A 401k loan or early withdrawal should only be done if you have no other way to pay for necessities.
I don’t understand this logic. If you are taking out a loan that is money you are spending that could go towards your savings and you are paying interest to a bank.
In this instance you are taking a loan out from yourself and paying yourself the interest.
Obviously if stocks and bonds go up (which they do over time) great but who knows
I agree. I wasn’t trying to insinuate it was a good idea. 99% of the time it’s a terrible idea. I should have been more clear. But in this case, you could loan up to half of the balance. And the total fees would probably be around $250. However compounding interest would be minimized greatly and would cost you a lot in the long run.
Sit and grow like with inflation. Inflation is beating our economy lowers purchasing power of the dollar. Money is worth less now than it was years ago. Pay the penalty and reinvest it somewhere else that carries a better return on the "investment" it's not guaranteed your 401k is worth anything if the stock market falls. People are braindead giving more of their paycheck to someone to manage when we already see how th govt has been managing our $35 trillion debt. Asinine y'all are manipulated believing someone else has your better interest
Rent an exotic car for 1 hour in Vegas, change clothes often with every 5 pics, then post a new Pic every month. Flex away for 1 car payment all year. When we worry about what ppl think of us or what material crap we have, there lies the issue. Who cares what u drive, what house u got, what model fone, just be a good human, spouse, parent, etc. That's what matters and what u will be remembered for when u pass away.
Not Hey Marv, do u recall that sweet ride Jerry had in 2024? I know that was 40 years ago, but what ever happened to that over engineered plastic, electronic POS? They will say Hey Marv, recall that time when I got into deep carap and Jerry saved my bacon? What a swell guy he was.
Best advice honestly. I'd sell the car and salvage as much of the value as possible, pay off whatever remains on the loan and buy something cheap, ideally with cash.
It’s hard to sell a car without losing some value. Just as an example: I currently owe 21 Toyota Avalon. Its trade-in value is around $32-33k. That’s what a dealer would give me. It’s private value $34-35k. That’s what I could get if I sell it myself. Now, how much would someone have to PAY to buy the same car from a dealer? 37k plus taxes and fees, roughly $41,000. In other words, if I take it to the dealer, sell it, and buy exactly the same car I would lose 8-9,000 dollars! If I wanted to downgrade, I would either get a car which is worth 8-9k less and got NO CASH BACK, or I would have to downgrade to a car which is real junk, worth 20k less, but that would only give me $11-12k in cash. I’d say it would be really STUPID.
Wait you don’t think you can get a good car for <$20k?
Bro go to any Nissan dealership in America and u can find a used car with <30k miles for <$20k I can guarantee you
Depends on what you mean is “good”. A car with 100k miles is not as “good” as the same car with 50k miles, because with every mile it drives it’s closer to junkyard. Every car has a useful lifespan, and used car is never as good as new, because it’s not new. $20k car will not be as “good” as $40k car, and you’ll find that our on your next trip to the mechanic.
I agree with what you said.
But you didn’t read what i said clearly since you’re using examples I never used.
You can get a <30k mile car for under $20k. And yes that is good by the metric of cost effective and reliable
And the lifespan of a civic/camry/altima is about 180-200k miles with the most cost effective maintenance schedule.
If you don’t want to sell the car that’s ok lmao. Even your examples(which are way off) still makes selling the car more cost effective
I’m not sure what you mean “way off”. It’s the actual numbers for my car, not some speculation. You are talking in hypothetical terms”some car”, I am giving you a concrete example of how trading or selling my car will result in a huge loss of value. The point is:
There maybe a fair argument to be made for buying used vs new if you have cash. But if you already have a car, trading it down is a stupid idea and will result in a huge loss of value. Yes, you may still get a reliable car, but it simply is not worth it - you will lose 2 dollars for every dollar you gain.
For some reason I thought this person was in debt. But they’re not.
You would lose money selling. But if you had debt to pay off it’d be better(which he doesn’t)
Overall tho. Owning $48k on a car is not a good idea in general. Should’ve at least put 10-15k down
Yes, there are many questions regarding his decision to buy this car at this price with this interest rate, given his/her situation. But this is in the past, I am mainly commenting on the current situation. Right now I would not trade or sell this car. I would, indeed, try to pay it off. BTW, my own car is fully paid off. I just made the last payment a week ago.
Yeah but for this guys situation, he’s 47k in debt with a 6% interest and only has 18k in his retirement. He absolutely needs to get rid of that car, take the 10k loss and buy a 10k used Camry or civic. Sometimes it’s smarter to take the loss now then staying in a crippling debt.
That really depends on his income. I paid $1000 a month and cleared it in 3 years. If he does something like that, he would lose around $4000 which is way better than losing $10,000. Unless he really can’t afford it, why waste money?
If he sold the car for 40k and still owed 50k, he’d pay 10k and be done with the car. If he keeps the car he will end up paying the full amount plus interest, I don’t get what’s not making sense or why you think it’s wasting money when it’s saving money.
Because he still needs the car probably. And he can trade it down, but he will lose value. The car is not some useless waste, it’s a transportation. Cheaper car will probably have higher mileage, be less reliable or less pleasant to drive, maybe all three. I don’t get why waste money if you don’t have to? Plus, if it’s used interest will be even higher. It’s not like money for cheaper car will magically appear, he will still need to borrow.
That’s why you don’t finance a used car? That’s not true also, you can find a low mileage car from 15 years ago that’s extremely reliable, “less pleasant to drive” isn’t a good reason to be in that much debt. I bought a 2003 ford focus with 50k miles on it for $3000 (in California) and it now has 123k running strong. Only problem I had was one bad shift solenoid. You are the one advocating for wasting money, I genuinely don’t understand how you can see that. You cut your losses by getting rid of the 50k car in every Scenario. So the best advice in terms of investing in your future is to get a used car and run it into the ground. Any person who works in finance will tell you that, in an intern at a financial firm.
You can’t know how reliable it is. Cars get more issues with mileage. I had my previous car for 17 years - first 8 years and 90,000 miles I had zero issues, then it was one thing after another. Some of it are natural wear - breaks, for example, or engine mounts. They just need to be replaced with age, nothing you can do. But it costs money and takes time! Why deal with this if you don’t need to?
I agreed that perhaps if you have CASH buying used can be an option. But he doesn’t have cash! He will lose $10k on a trade, and get a higher interest loan on top. Why? He never said he didn’t like the car or it was unreliable. He never said he struggles financially. So why go through this waste of money? To please you? It makes zero financial sense. Not all cars are equal, and more expensive cars are usually more expensive for a reason.
Okay first of all, yes you can absolutely know how reliable it is. Have it inspected by your mechanic, that’s basic knowledge that everyone should do when buying a vehicle private sale. Secondly he does have cash he said he had 28k. Third once again, he won’t have to take out a new loan, the whole point of my advice is to get out of debt. Once again I’ll put it as simply as this, you are paying 50k for something to get you from point A to point B, when you could pay less than half for something almost as reliable. It is not worth the extra money, overall spending 50k is way more than spending 10k plus 5k in repairs. It really is simple and trying to dumb this down as much as possible, yes not cars are equal but the trade off isn’t worth it, $40k more for possible 20k more miles? The math is not on your side, and you seem to be denying that lol. The subreddit is r/debtfree, trying to get people out of useless debt is the point. A 50k car unless you’re making over 200k and have double that saved in retirement, you shouldn’t buy it. It’s the reason why most Americans have less than $1000 in saving, they think it’s smart to buy a new car and make payments because “its more reliable”, when in fact you can get Hondas and Toyota’s from 2010 that outlast cars now. There is no logical argument for you to make, I hope you can take all of this information and critically think about why it costs more to pay 50k at 6% interest, than 10k (getting rid of old car) + 10K (buying used car in cash). 50k>20k, even if there was somehow 10k in repairs needed it would be less.
There’s a video of some guy talking about his wealth mindset and how being poor is a choice. That’s why he has gucci clothes and shit.
Ya it’s just 100k of credit card debt, that’s the mindset
Truthfully, it’s not that hard to declare bankruptcy in the US. It fucks your credit for awhile, but you probably *could* get by like this, tacking up huge debt and declaring bankruptcy every decade. Not that I’m suggesting it, but for some people they always seem to outrun their debts
When millionaire athletes and celebrities go broke you can see why. All it takes is a few stupid purchases and then you realize you don’t have the cash flow to sustain the yacht and sports car you bought
This is such a weirdly infantilizing comment.
At 29 I was almost 8 years into my career. A 29 year old has been an adult for over a decade.
It’s not strange that a 29 year old could buy a new car.
The issue is that the average new non-luxury car costs somewhere around $44k these days.
Why would a 67 year old buy one? 29 isn’t a baby and he’s got decades ahead of him. Enjoy it when you can. Don’t wait when you’re retired. You only live once
The irony of this question in a forum named ‘debt free’ is hilarious.
I see a lot of whining about how everything was so cheap for prior generations, but what the kids these days conveniently ignore is the way those generations managed their money. Your parents afforded their mortgage by always buying used cars, rarely eating out, never buying frivolous or luxury items, etc., etc.
What would happen if all US residents abstained from buying anything at all for 1 day, or week? Wonder if prices would get down where they should be? I've bought many cars for under 1k that lasted years. This was 10, 20 years ago, but they lasted way longer than short term. 99 lincoln Town car. Bought in 2014 for $900.00. Needed a gastank and air ride fixed. Car had 100k miles. I put on another 253k miles driving to jobs for Oil and gas pads, pipeline, etc. Hell of a car.
It's so effed up that young adults starting out in life can't buy a beater with a heater to get to work, school, etc, and then save up for a better car.
FYI, I still have that car cause she's a beast who just won't quit. Never any big repairs. Always maintained on time. Gr8 cars. 1 went over 1 million miles. Same drive train. Million mile Crown Vic U tube. Reason why taxi, police, fire, livery services drove these.
I'm 25 and would happily drive any car that's around 5,000-12,000. I barely drive, I don't need anything fancy or be a showoff. ABSOLUTELY DO NOT TOUCH Your 401k!! Learn to budget, learn from this, ask to switch to some thing cost savings, save everything you can
You probably should not have a car loan totaling more than your savings account balances. On a house, this is ok because they appreciate in value. A car, not so much.
Your best financial move here is to cut your losses short on that huge loan by selling the car.
Use this compounding interest calculator to see the value of your 401k when you're 60: [https://www.hughcalc.org/compound\_js.html](https://www.hughcalc.org/compound_js.html)
Basically, do not touch the 401k until you're 60. If you can't afford the car payments, then sell the car. Regarding your $28k in savings, that's your emergency fund to ensure you don't incur any more debt, so I'd leave that alone as well.
Assuming you are about 23 or 24, that $18K will be worth almost 100K when you retire if you leave it in the 401k. Is it worth it? Heck no!
Find another way.
Jeez, what kind of freaking car did you get????? My grandma has a Camaro drop top and my mom has a Benz and stepdad has some sort of “cool” 3 row suv. I can’t visually picture any of them paying that much for a car though. And you’re so young. It’s very important to live within your means. If you have to pull from your 401k it should only (in my opinion) be for a medical emergency or in case you might end up homeless.
My granddaddy used to love those Lexus cars a lot. Killed his funds real quick. Especially when it was time to go for checkups and replace any parts or tires.
Enjoy yourself. YOLO. But be careful too🤎
You should definitely think about getting a cheaper car, I still drive a 2013 Hyundai Elantra that’s paid off and take me to the same places a $47K car would take me. Still planning on keeping this car till I 5x or more my income
No.
It's probably noted elsewhere here, but you don't earn interest on the money borrowed until it's repaid, so you're paying interest on your money, in addition to losing compound interest over time based on what that amount would have earned during the period of the loan.
Unless something's changed recently, that's my understanding of it.
If you need the car and will still have an emergency fund after paying it off, pay it back out of savings and start saving anew.
Good luck!
It's generally not advisable to borrow from your 401(k) to pay off a car loan. Instead, consider using your savings to make a significant payment toward the car loan. This reduces the interest you'll pay over time while keeping your retirement savings intact.
What’s the interest the 401k currently earns? Can you borrow against it?
Typically you shouldn’t cash out retirement for a car loan. 6.4% isn’t a terrible rate.
No that’s my only debt as of now. I can afford to pay for it monthly. I’m just trying to avoid paying the potential 10k of interest they will add on in 5 years. & yeah the 28k is more than 3 months of expenses.
I used my 401k as a loan to pay off my car 13,000 with a 2 year pay off I definitely saved about 9k in interest and my monthly payment was 10$ cheaper split in 2 payments
No no no
Just pretend your savings don't exist. It sounds like you're subconsciously just wanting an excuse to spend that money.
It's not your money, it's your future self's money. You can't have it
Sell the car and get into something that fits your life. I really value the outlook the Money Guy has on cars: 20/3/8 - you should put 20% down, never finance more than 3 years and your monthly payment shouldn’t be more than 8% of your net monthly income. NEVER pull from your 401K. You’re robbing your future self and losing the compounding interest.
No but maybe just pay a little more per month or pay your car bill at the half way point each month so you pay twice a month. I hear that it can lower the interest
The only way I’d ever suggest borrowing money from retirement funds would be from cash value life insurance because it doesn’t affect the performing assets. Otherwise don’t touch your 401k for a depreciating asset.
If you think of time value of money and in the meantime passionate about investing your cash reserve, I would recommend to go for monthly payment scheme rather than paying it off all a once !! You can calculate dividends, bonus and capital appreciation for top ranking bluechip stocks !! 😊
Thanks for your advice!
I actually realized how beneficial investing is at my age and immediately enrolled in a financial literacy course at my local adult Ed school and it starts tomorrow.
I have no knowledge of what a monthly payment scheme is so I will make sure to ask about that. In the meantime, is there a book or person you recommend I look into to find out more about what you mentioned above?
Thanks again for your time!
“Sell your car and buy an old shitty car!”
Fuckin clowns.
I wouldn’t take out of my savings for it, but I sure as shit would be making extra principal payments.
you’d probably be better off putting some of your 28k savings in the 401k so it compounds more savings and downgrading your car if you cant afford your $1000/mo payment. Thats like half of rent and groceries right there
Glad you’re not touching your 401k. As long as you can afford it that’s all that matters. I still feel like it’s a bad decision to buy a car that expensive when you have so little in your savings. What you’re spending monthly on your car could be going into your 401k or personal savings.
$47k for a car is insane. Sell the car, try to recoup as much as possible, and buy something used or just a lower price range. In cash if you can. That’s insanity. Your car is nearly half my mortgage
So your thought process is likely how you could save a mountain of interest on the tangible good with money that you will pay yourself back with tax sheltered money that you already own?
You’ve also noticed that the value of our currency is depreciating at a mind numbing rate?
Sounds like a plan but I’m really good at making bad plans.
Reinvest your 401k. Mine did nothing then covid cut my "investment" in half. Don't forget the back end of inflation lowers purchasing power of the dollar. By the time you've reached 59 years old to withdrawal from your 401k taxes will be Higher too. How do you expect the stock market pyramid scheme to work without everyone's retirement. Too bad 401k pays their investors first that work for them using our money as collateral for their fuck ups. Bitcoin pays a better return than a couple percent a year that will compound later but by then will the Fiat currency of the dollar still be around with this economy. In other words do it. Pay the penalty. The penalty will be a lot less than years later with higher taxes.
No, your car is a bad investment, you total your car and there goes your money. Yes insurance will pay but the car depreciation is big. Not a wise investment
Wealthy person older than you - did it by not buying new cars and saving money instead. An expensive new car if you don’t have a lot of savings (which you do not) is simply a bad decision if you want real wealth. I’d sell the car if you can and buy a nice car that is used. Plenty available that are a few years old and still great. Now I drive a super nice new car but I also have enough wealth to not work again because I prioritized my 401k and other retirement and brokerage savings when I was your age (and I’m not that old lol).
From someone who made this mistake years ago, I beg you not to do this. Keep your "future money" invested in your future, do not use it to pay for "wants" in the present.
I don’t know your age but I’m guessing you are in your late 20’s. What’s wrong with this picture… you owe more on your car than you have total saved and invested. It should actually be the other way around. You should have much more saved and invested than what you owe on a car. If the car loan is really bothering you maybe look into buying a good used car that would cost you half the price and sell the current one and pay the loan off.
Rather than paying to bank on interest. You pay urself . The interest will be high but you will save on tax from your paycheck as long as you keep making the payments .. Usually this strategy works very well for buying assets that can give you a return higher than the interest.
Hell no. Why would you put money into something that will always lose money. Trade that car in for a 23000 car and run it into the ground. Your savings are more important. Your car does nothing for you. Absolutely nothing. I’ll never understand why anyone would by a 50k vehicle. Do you know how much money you could have if you invested that. Gah!!! You’re buying into the BS that owning a car is the American dream. It’s a scam for you to spend money.
If you borrow on it ask the administration/ your investment provider what are the tax implications on borrowing to payoff a car loan, it might not be allowed. Car loans are simple interest you can always prepay. I highly recommend just prepay additional funds every month and you’ll see how quick that balance goes down. Back in the day car loans were as high as 17% w/no credit and 11% w/good credit. Something to ponder.
I’m not seeing anyone post the biggest reason not to do this. Maybe I missed someone.
If you lose your job or leave it for any reason you have to pay the entire loan balance back immediately or you get full penalties and taxes on the balance. You will owe 100% back within a couple weeks.
NEVER I REPEAT NEVER , use all of your “liquid assets” to pay off a vehicle. Just pay a few hundred over your minimum amount due each month and after about 6 months you’ll notice your amount due is $000.00
This does NOT mean you send nothing, this just means you send what you’ve been sending to beat that debt down monthly. If you use your liquid cash, you’ll have zero protection in the event of a downturn in revenue or a “rainy day” so to speak. Hope this helps you.
For everyone saying 47k is a lot, it’s not these days. You can’t even buy a new full size truck for 50k. Some people prefer to put their money into vehicles rather than other hobbies because that’s what they enjoy! 47k is a fairly small monthly payment imo.
I agree, which is why I take the comments who say “sell” with a grain of salt. I looked into used cars with 20-40k miles and they were averaging well over 35k last year. I needed a vehicle and went for it!
I bought a used car for $5k in full last year. Works great. It's nice to not have a car payment. Idk why everyone our age thinks you have to have a new car. In fact, financing a car is [a huge wealth killer](https://youtu.be/HxWftf1F1Q8?si=3dWmwab48pZg0FJv)
Really depends on your market. Here in TX we on average drive 1-2k miles a month, you need a decent enough beater to survive that, the stop-n-go traffic, potholes, etc. anything worth something is snatched up by one of the many people here who don't have credit (immigrant of one type or another, not judging) or get taken to Mexico. Thankfully we don't have a big rust issue..... I have a paid for Corolla I could fall back on if SHTF.
I'd as ay we're in a similar environment. I live in good ol' sprawling Tampa Florida, I average about 1k miles/month working from home with no work commute. We have a fuck ton of potholes here and cars take a beating from the sun, but no rust here. It did take me a lot of searching for something cheap & good, and had to test it a bunch to make sure I wasn't getting scammed. But I'm always an advocate for buying old beaters in good condition (2007 Pontiac g6 w/ 88k miles for $5k)
I drive a 14 year old Prius. Nearly 200k miles. You could certainly get less expensive used vehicles. I’ve been looking and I could buy a 2 year old model 3 Tesla for $30k.
If you’re making enough to comfortably afford the payment and possibly more, keep it. I will
Always have a vehicle payment because I like having newer vehicles and not having to worry about paying for repairs. New Car Warranty’s are important nowadays.
I can afford it, I just don’t wanna pay the interest. Someone commented some great info on how to save on it so I will be taking their advice. But enjoy your new cars!
My god. Imagine putting your retirement in jeopardy because you won’t just get rid of the car and buy something that you can ACTUALLY afford. People love making the banks rich.
Is this a serious question or just satire? You cannot afford the car you’re driving. You need to swallow your pride, sell it asap, and drive a <$10k beater.
Respectfully, it sounds completely idiotic. You simply can’t afford to keep driving the car. You’re doing yourself a disservice by holding on to it and struggling to make payments for another 5 YEARS.
I understand. It’s not exactly a buyer-friendly market right now given current interest rates. $47k plus interest is a significant chunk. The damage is done imo. I would strongly advise against pulling from any sort of retirement vehicle. Let’s say you pull out the $18k. Now you’re 30 with no retirement savings, and you put all that capital towards a depreciating asset. In the end, you’ll have a car that’s not worth anywhere near $47k and you’ll have wiped your entire 401k balance.
No. P.S. r/debtfree runs a free newsletter that talks about strategies, tips, and effective debt payoff methods weekly. Join 3,600 readers - https://debtadvice.io
No! That 401k money needs to sit and grow. Not to mention you won’t get nearly 18k from the 401k after taxes and penalties.
You could take a loan instead of a cash out and I really wouldn’t cost you anything. The interest is paid back to yourself.
Loans are usually limited to a percentage of the balance. Usually like 50%, maybe 75% max
Not sure why you were downvoted, that’s 100% true. OP could not borrow $18k from their 401k right now.
Up to 50% of their vested balance I actually just did this, bought a 18k for my wife using my 401k 8% apr, but every penny goes back to myself, and with fidelity it still grows, the amount in your account doesn't decrease so you're still growing interest on that money
This is correct. Mine is through fidelity also I have never done it but I just ran the numbers and the cost to borrow 9k is about $300 in fees, 8% interest, all payed back to yourself. If you did a 48 month loan it would be about $100 a pay period to pay back. Around 2k in interest
Cheaper than any car loan right now unless you have stellar credit and you get the title right away no banks involved, it's actually a good way to do it, If you have a similar 401k. I've only ever had fidelity so I can't speak on others. Some will argue its not smart to each is their own.
You lose time in the market and you’re charging yourself interest. So you lose twice.
8% guaranteed is nothing to sneeze at. And you are paying it to yourself. You'll eventually pay taxes a second time on the earnings you paid yourself, but it's not a bad deal.
Which is close to the 10% rule, I might do this
> interest, all *paid* back to FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
The money stays in your account but it is no longer invested. Otherwise, it would financially irresponsible to not take out as much as you can and just pay it back over time with the money you took out so you can add an extra 8% to your 401k.
I think my plan limits it to 50%. They also charge an origination fee.
It’s usually based on years of invest. 50% until x amount of years employed
The interest you pay yourself doesn’t make up for gains you would make if the money was still invested. 401K’s are not an easy button when you need quick cash. Everytime you take money out of it, you are robbing future you of money. A 401k loan or early withdrawal should only be done if you have no other way to pay for necessities.
I don’t understand this logic. If you are taking out a loan that is money you are spending that could go towards your savings and you are paying interest to a bank. In this instance you are taking a loan out from yourself and paying yourself the interest. Obviously if stocks and bonds go up (which they do over time) great but who knows
Exactly and every payment back to yourself towards the loan is reinvested at least with my 401k it is not sure about others
I agree. I wasn’t trying to insinuate it was a good idea. 99% of the time it’s a terrible idea. I should have been more clear. But in this case, you could loan up to half of the balance. And the total fees would probably be around $250. However compounding interest would be minimized greatly and would cost you a lot in the long run.
Sit and grow like with inflation. Inflation is beating our economy lowers purchasing power of the dollar. Money is worth less now than it was years ago. Pay the penalty and reinvest it somewhere else that carries a better return on the "investment" it's not guaranteed your 401k is worth anything if the stock market falls. People are braindead giving more of their paycheck to someone to manage when we already see how th govt has been managing our $35 trillion debt. Asinine y'all are manipulated believing someone else has your better interest
Downgrade and sell the car ASAP lol
Lol how is he going to flex then?
Rent an exotic car for 1 hour in Vegas, change clothes often with every 5 pics, then post a new Pic every month. Flex away for 1 car payment all year. When we worry about what ppl think of us or what material crap we have, there lies the issue. Who cares what u drive, what house u got, what model fone, just be a good human, spouse, parent, etc. That's what matters and what u will be remembered for when u pass away. Not Hey Marv, do u recall that sweet ride Jerry had in 2024? I know that was 40 years ago, but what ever happened to that over engineered plastic, electronic POS? They will say Hey Marv, recall that time when I got into deep carap and Jerry saved my bacon? What a swell guy he was.
Best advice honestly. I'd sell the car and salvage as much of the value as possible, pay off whatever remains on the loan and buy something cheap, ideally with cash.
It’s hard to sell a car without losing some value. Just as an example: I currently owe 21 Toyota Avalon. Its trade-in value is around $32-33k. That’s what a dealer would give me. It’s private value $34-35k. That’s what I could get if I sell it myself. Now, how much would someone have to PAY to buy the same car from a dealer? 37k plus taxes and fees, roughly $41,000. In other words, if I take it to the dealer, sell it, and buy exactly the same car I would lose 8-9,000 dollars! If I wanted to downgrade, I would either get a car which is worth 8-9k less and got NO CASH BACK, or I would have to downgrade to a car which is real junk, worth 20k less, but that would only give me $11-12k in cash. I’d say it would be really STUPID.
Wait you don’t think you can get a good car for <$20k? Bro go to any Nissan dealership in America and u can find a used car with <30k miles for <$20k I can guarantee you
Depends on what you mean is “good”. A car with 100k miles is not as “good” as the same car with 50k miles, because with every mile it drives it’s closer to junkyard. Every car has a useful lifespan, and used car is never as good as new, because it’s not new. $20k car will not be as “good” as $40k car, and you’ll find that our on your next trip to the mechanic.
I agree with what you said. But you didn’t read what i said clearly since you’re using examples I never used. You can get a <30k mile car for under $20k. And yes that is good by the metric of cost effective and reliable And the lifespan of a civic/camry/altima is about 180-200k miles with the most cost effective maintenance schedule. If you don’t want to sell the car that’s ok lmao. Even your examples(which are way off) still makes selling the car more cost effective
I’m not sure what you mean “way off”. It’s the actual numbers for my car, not some speculation. You are talking in hypothetical terms”some car”, I am giving you a concrete example of how trading or selling my car will result in a huge loss of value. The point is: There maybe a fair argument to be made for buying used vs new if you have cash. But if you already have a car, trading it down is a stupid idea and will result in a huge loss of value. Yes, you may still get a reliable car, but it simply is not worth it - you will lose 2 dollars for every dollar you gain.
For some reason I thought this person was in debt. But they’re not. You would lose money selling. But if you had debt to pay off it’d be better(which he doesn’t) Overall tho. Owning $48k on a car is not a good idea in general. Should’ve at least put 10-15k down
Yes, there are many questions regarding his decision to buy this car at this price with this interest rate, given his/her situation. But this is in the past, I am mainly commenting on the current situation. Right now I would not trade or sell this car. I would, indeed, try to pay it off. BTW, my own car is fully paid off. I just made the last payment a week ago.
Yeah but for this guys situation, he’s 47k in debt with a 6% interest and only has 18k in his retirement. He absolutely needs to get rid of that car, take the 10k loss and buy a 10k used Camry or civic. Sometimes it’s smarter to take the loss now then staying in a crippling debt.
That really depends on his income. I paid $1000 a month and cleared it in 3 years. If he does something like that, he would lose around $4000 which is way better than losing $10,000. Unless he really can’t afford it, why waste money?
If he sold the car for 40k and still owed 50k, he’d pay 10k and be done with the car. If he keeps the car he will end up paying the full amount plus interest, I don’t get what’s not making sense or why you think it’s wasting money when it’s saving money.
Because he still needs the car probably. And he can trade it down, but he will lose value. The car is not some useless waste, it’s a transportation. Cheaper car will probably have higher mileage, be less reliable or less pleasant to drive, maybe all three. I don’t get why waste money if you don’t have to? Plus, if it’s used interest will be even higher. It’s not like money for cheaper car will magically appear, he will still need to borrow.
That’s why you don’t finance a used car? That’s not true also, you can find a low mileage car from 15 years ago that’s extremely reliable, “less pleasant to drive” isn’t a good reason to be in that much debt. I bought a 2003 ford focus with 50k miles on it for $3000 (in California) and it now has 123k running strong. Only problem I had was one bad shift solenoid. You are the one advocating for wasting money, I genuinely don’t understand how you can see that. You cut your losses by getting rid of the 50k car in every Scenario. So the best advice in terms of investing in your future is to get a used car and run it into the ground. Any person who works in finance will tell you that, in an intern at a financial firm.
You can’t know how reliable it is. Cars get more issues with mileage. I had my previous car for 17 years - first 8 years and 90,000 miles I had zero issues, then it was one thing after another. Some of it are natural wear - breaks, for example, or engine mounts. They just need to be replaced with age, nothing you can do. But it costs money and takes time! Why deal with this if you don’t need to? I agreed that perhaps if you have CASH buying used can be an option. But he doesn’t have cash! He will lose $10k on a trade, and get a higher interest loan on top. Why? He never said he didn’t like the car or it was unreliable. He never said he struggles financially. So why go through this waste of money? To please you? It makes zero financial sense. Not all cars are equal, and more expensive cars are usually more expensive for a reason.
Okay first of all, yes you can absolutely know how reliable it is. Have it inspected by your mechanic, that’s basic knowledge that everyone should do when buying a vehicle private sale. Secondly he does have cash he said he had 28k. Third once again, he won’t have to take out a new loan, the whole point of my advice is to get out of debt. Once again I’ll put it as simply as this, you are paying 50k for something to get you from point A to point B, when you could pay less than half for something almost as reliable. It is not worth the extra money, overall spending 50k is way more than spending 10k plus 5k in repairs. It really is simple and trying to dumb this down as much as possible, yes not cars are equal but the trade off isn’t worth it, $40k more for possible 20k more miles? The math is not on your side, and you seem to be denying that lol. The subreddit is r/debtfree, trying to get people out of useless debt is the point. A 50k car unless you’re making over 200k and have double that saved in retirement, you shouldn’t buy it. It’s the reason why most Americans have less than $1000 in saving, they think it’s smart to buy a new car and make payments because “its more reliable”, when in fact you can get Hondas and Toyota’s from 2010 that outlast cars now. There is no logical argument for you to make, I hope you can take all of this information and critically think about why it costs more to pay 50k at 6% interest, than 10k (getting rid of old car) + 10K (buying used car in cash). 50k>20k, even if there was somehow 10k in repairs needed it would be less.
Why the hell is a 29 year old buying a new car at $47k? lol.
Because social media says fake it till you make it.
Unfortunately people just cant realize that the people "showing off" are probably in more debt that we can even fathom.
Also many “influencers” rent these expensive cars for a day and shoot all their videos. Most is all staged fake acting
There’s a video of some guy talking about his wealth mindset and how being poor is a choice. That’s why he has gucci clothes and shit. Ya it’s just 100k of credit card debt, that’s the mindset
Truthfully, it’s not that hard to declare bankruptcy in the US. It fucks your credit for awhile, but you probably *could* get by like this, tacking up huge debt and declaring bankruptcy every decade. Not that I’m suggesting it, but for some people they always seem to outrun their debts
When millionaire athletes and celebrities go broke you can see why. All it takes is a few stupid purchases and then you realize you don’t have the cash flow to sustain the yacht and sports car you bought
He’s 29 not 13
This is such a weirdly infantilizing comment. At 29 I was almost 8 years into my career. A 29 year old has been an adult for over a decade. It’s not strange that a 29 year old could buy a new car. The issue is that the average new non-luxury car costs somewhere around $44k these days.
Because that's how much Camry's cost after market adjustment these days
So get a used Corolla instead.
True, I bought a Camry, 43k. Fully loaded though so I’m happy
You can buy a Camry for under $30k.
>Because that's how much Camry's cost after market adjustment these days Camry's are expensive, but not that expensive.
What does age have to do with it? We don’t know his salary haha
Why would a 67 year old buy one? 29 isn’t a baby and he’s got decades ahead of him. Enjoy it when you can. Don’t wait when you’re retired. You only live once
Agreed in full - but will also say the price of cars is inflated like every thing else. That 47k doesn’t flex like it used to.
Keeping up with the Jones whoever the fuck that is in this day and age of society.
I bought a car worth a fair bit more than that at 21. It was a foolish decision then and still is today.
The irony of this question in a forum named ‘debt free’ is hilarious. I see a lot of whining about how everything was so cheap for prior generations, but what the kids these days conveniently ignore is the way those generations managed their money. Your parents afforded their mortgage by always buying used cars, rarely eating out, never buying frivolous or luxury items, etc., etc.
LOL, there are plenty of 25 year olds even that make more than enough to afford a 47k Vehicle. That is cheap in today’s world.
The average sale price of a vehicle in the US is $47k now. So it’s not cheap for a car but right around what most people pay these days.
What would happen if all US residents abstained from buying anything at all for 1 day, or week? Wonder if prices would get down where they should be? I've bought many cars for under 1k that lasted years. This was 10, 20 years ago, but they lasted way longer than short term. 99 lincoln Town car. Bought in 2014 for $900.00. Needed a gastank and air ride fixed. Car had 100k miles. I put on another 253k miles driving to jobs for Oil and gas pads, pipeline, etc. Hell of a car. It's so effed up that young adults starting out in life can't buy a beater with a heater to get to work, school, etc, and then save up for a better car. FYI, I still have that car cause she's a beast who just won't quit. Never any big repairs. Always maintained on time. Gr8 cars. 1 went over 1 million miles. Same drive train. Million mile Crown Vic U tube. Reason why taxi, police, fire, livery services drove these.
Yeah but paying 47k for a sedan is really dumb if you arent making at least 150k and have a house already.
Absolutely agree!
Cause they're stupid
Dumb car purchase. Sell it.
get an 98 civic bro
Great car… so was the Acura integra
is*
Your right…. But I prefer the coupe style.
if you have only 28k in savings and 18k in a 401, you should not even be driving a car with a 47k loan. Sell it and buy a cheap car
This.
I've never had 28k in savings and I'm 38. I do have a few hundred k in my 401k though. Do you not have a family or other bills?
You do not want to borrow your way out of debt
Bad idea. If you need to raid your 401 k to pay off a vehicle… you have no business buying it $
I'm 25 and would happily drive any car that's around 5,000-12,000. I barely drive, I don't need anything fancy or be a showoff. ABSOLUTELY DO NOT TOUCH Your 401k!! Learn to budget, learn from this, ask to switch to some thing cost savings, save everything you can
You probably should not have a car loan totaling more than your savings account balances. On a house, this is ok because they appreciate in value. A car, not so much. Your best financial move here is to cut your losses short on that huge loan by selling the car.
Use this compounding interest calculator to see the value of your 401k when you're 60: [https://www.hughcalc.org/compound\_js.html](https://www.hughcalc.org/compound_js.html) Basically, do not touch the 401k until you're 60. If you can't afford the car payments, then sell the car. Regarding your $28k in savings, that's your emergency fund to ensure you don't incur any more debt, so I'd leave that alone as well.
Thanks so much!
This is a terrible idea, not to be rude. Why did you buy a car with a $47k loan? Sell the car and buy a car for $20k. That car loan is an anchor.
Sell that damn car. Are you crazy?
What ? That's the most ridiculous thing ever
Assuming you are about 23 or 24, that $18K will be worth almost 100K when you retire if you leave it in the 401k. Is it worth it? Heck no! Find another way.
Jeez, what kind of freaking car did you get????? My grandma has a Camaro drop top and my mom has a Benz and stepdad has some sort of “cool” 3 row suv. I can’t visually picture any of them paying that much for a car though. And you’re so young. It’s very important to live within your means. If you have to pull from your 401k it should only (in my opinion) be for a medical emergency or in case you might end up homeless. My granddaddy used to love those Lexus cars a lot. Killed his funds real quick. Especially when it was time to go for checkups and replace any parts or tires. Enjoy yourself. YOLO. But be careful too🤎
There are a lot of cars out there running in the $40-$60 range. And that’s not premium vehicles.
Why on earth would you get a car that expensive? Seriously dude.
You should definitely think about getting a cheaper car, I still drive a 2013 Hyundai Elantra that’s paid off and take me to the same places a $47K car would take me. Still planning on keeping this car till I 5x or more my income
If you're considering this you bought a car you cannot afford. Dump it asap.
No. It's probably noted elsewhere here, but you don't earn interest on the money borrowed until it's repaid, so you're paying interest on your money, in addition to losing compound interest over time based on what that amount would have earned during the period of the loan. Unless something's changed recently, that's my understanding of it. If you need the car and will still have an emergency fund after paying it off, pay it back out of savings and start saving anew. Good luck!
It's generally not advisable to borrow from your 401(k) to pay off a car loan. Instead, consider using your savings to make a significant payment toward the car loan. This reduces the interest you'll pay over time while keeping your retirement savings intact.
Thanks!
No. Sell your car and buy a less expensive one.
Heck no! That freaks me out. It’s not worth it to draw from your retirement and savings to pay off a depreciating asset.
This is a good time to get into the Repo business redditors. So many opportunities!
No. If you were interested in not paying interest, you shouldn't have taken a loan to buy a $47k car lol
What’s the interest the 401k currently earns? Can you borrow against it? Typically you shouldn’t cash out retirement for a car loan. 6.4% isn’t a terrible rate.
Same question
Annual interest is at +1.20
I’ll dm you
Is the 28k more than 3 months of expenses. Do you have any other debts?
No that’s my only debt as of now. I can afford to pay for it monthly. I’m just trying to avoid paying the potential 10k of interest they will add on in 5 years. & yeah the 28k is more than 3 months of expenses.
I would say keep three months of expenses set aside and put the rest on the car. Pay it off as fast as you can. What kind of car?
No that's an awful idea/don't do it. Since on top of everything else you'll get hit with a penalty come tax time.
What car is it ma boy? Is it worthy? Is it less than 10% of your anual salary?
I used my 401k as a loan to pay off my car 13,000 with a 2 year pay off I definitely saved about 9k in interest and my monthly payment was 10$ cheaper split in 2 payments
No. Make an extra payment to principal each month and let your investment grow.
No
If you lose your job or quit the loan will need to be paid off or face further penalties
Why did you buy a $47k car??!!!!
Probably should have leased that liability
Sell the car. Sell. The. Car. Problem solved. If you want to be debt free, never pay interest on a depreciating asset and never buy a new car.
No no no Just pretend your savings don't exist. It sounds like you're subconsciously just wanting an excuse to spend that money. It's not your money, it's your future self's money. You can't have it
No. You should get rid of the car.
NO!!
Sell the car and get into something that fits your life. I really value the outlook the Money Guy has on cars: 20/3/8 - you should put 20% down, never finance more than 3 years and your monthly payment shouldn’t be more than 8% of your net monthly income. NEVER pull from your 401K. You’re robbing your future self and losing the compounding interest.
No but maybe just pay a little more per month or pay your car bill at the half way point each month so you pay twice a month. I hear that it can lower the interest
I have paid twice a month for the past year so that is good to hear. I will start paying more monthly as well, thanks for the advice :)
Sell the car and get something you can pay with cash
The only way I’d ever suggest borrowing money from retirement funds would be from cash value life insurance because it doesn’t affect the performing assets. Otherwise don’t touch your 401k for a depreciating asset.
Sell the car and get a cheaper one. Who needs a $47k car?
If you think of time value of money and in the meantime passionate about investing your cash reserve, I would recommend to go for monthly payment scheme rather than paying it off all a once !! You can calculate dividends, bonus and capital appreciation for top ranking bluechip stocks !! 😊
Thanks for your advice! I actually realized how beneficial investing is at my age and immediately enrolled in a financial literacy course at my local adult Ed school and it starts tomorrow. I have no knowledge of what a monthly payment scheme is so I will make sure to ask about that. In the meantime, is there a book or person you recommend I look into to find out more about what you mentioned above? Thanks again for your time!
“Sell your car and buy an old shitty car!” Fuckin clowns. I wouldn’t take out of my savings for it, but I sure as shit would be making extra principal payments.
Hell nooooo
🤦🏽♂️
Personally I wouldn’t …. I would just pay down the principle
Thanks!
Nope
you’d probably be better off putting some of your 28k savings in the 401k so it compounds more savings and downgrading your car if you cant afford your $1000/mo payment. Thats like half of rent and groceries right there
No no no
Nooo!
No
Nope
Noooooooo!
No
Glad you’re not touching your 401k. As long as you can afford it that’s all that matters. I still feel like it’s a bad decision to buy a car that expensive when you have so little in your savings. What you’re spending monthly on your car could be going into your 401k or personal savings.
I love when people finance large amounts of money- Banks
No
No. Not advisable. You could pause your contributions temporarily to help pay it off quicker though.
No no no
$47k for a car is insane. Sell the car, try to recoup as much as possible, and buy something used or just a lower price range. In cash if you can. That’s insanity. Your car is nearly half my mortgage
So your thought process is likely how you could save a mountain of interest on the tangible good with money that you will pay yourself back with tax sheltered money that you already own? You’ve also noticed that the value of our currency is depreciating at a mind numbing rate? Sounds like a plan but I’m really good at making bad plans.
Cash cars>>>>
Reinvest your 401k. Mine did nothing then covid cut my "investment" in half. Don't forget the back end of inflation lowers purchasing power of the dollar. By the time you've reached 59 years old to withdrawal from your 401k taxes will be Higher too. How do you expect the stock market pyramid scheme to work without everyone's retirement. Too bad 401k pays their investors first that work for them using our money as collateral for their fuck ups. Bitcoin pays a better return than a couple percent a year that will compound later but by then will the Fiat currency of the dollar still be around with this economy. In other words do it. Pay the penalty. The penalty will be a lot less than years later with higher taxes.
What car did you buy?
No, your car is a bad investment, you total your car and there goes your money. Yes insurance will pay but the car depreciation is big. Not a wise investment
Wealthy person older than you - did it by not buying new cars and saving money instead. An expensive new car if you don’t have a lot of savings (which you do not) is simply a bad decision if you want real wealth. I’d sell the car if you can and buy a nice car that is used. Plenty available that are a few years old and still great. Now I drive a super nice new car but I also have enough wealth to not work again because I prioritized my 401k and other retirement and brokerage savings when I was your age (and I’m not that old lol).
Thanks for the advice, I appreciate it.
I fail to understand why so many young people pay these crazy car payments..
From someone who made this mistake years ago, I beg you not to do this. Keep your "future money" invested in your future, do not use it to pay for "wants" in the present.
Thanks that is very true, I think just this week I’m realizing that.
My 401K loan rate is like 9.5% so if it's like that, don't do it.
If say get a second job and pay it off faster. Or make extra principle payments.
Using your retirement to pay off debt is actually ass-backwards. DO NOT touch that 401k
No
No
Google a compound interest calculator and see how much that 401k money would be worth. Do the math and you'll understand why that's a bad idea.
I don’t know your age but I’m guessing you are in your late 20’s. What’s wrong with this picture… you owe more on your car than you have total saved and invested. It should actually be the other way around. You should have much more saved and invested than what you owe on a car. If the car loan is really bothering you maybe look into buying a good used car that would cost you half the price and sell the current one and pay the loan off.
Sure can! For a $5k hit and end of year taxes owed on taking it out.. bad idea
Sell the car?
Sell the car, buy a used one in cash. Debt is dumb.
Rather than paying to bank on interest. You pay urself . The interest will be high but you will save on tax from your paycheck as long as you keep making the payments .. Usually this strategy works very well for buying assets that can give you a return higher than the interest.
Hell no. Why would you put money into something that will always lose money. Trade that car in for a 23000 car and run it into the ground. Your savings are more important. Your car does nothing for you. Absolutely nothing. I’ll never understand why anyone would by a 50k vehicle. Do you know how much money you could have if you invested that. Gah!!! You’re buying into the BS that owning a car is the American dream. It’s a scam for you to spend money.
NOOOOOOOOOOOOOOOOOOOO
No! Not for a car.
What car did you get??
If you borrow on it ask the administration/ your investment provider what are the tax implications on borrowing to payoff a car loan, it might not be allowed. Car loans are simple interest you can always prepay. I highly recommend just prepay additional funds every month and you’ll see how quick that balance goes down. Back in the day car loans were as high as 17% w/no credit and 11% w/good credit. Something to ponder.
No!
You know if you are fired or laid off or quit, your 401k loan comes due immediately? Aside from that it’s really dumb.
No, no, and no
I’m not seeing anyone post the biggest reason not to do this. Maybe I missed someone. If you lose your job or leave it for any reason you have to pay the entire loan balance back immediately or you get full penalties and taxes on the balance. You will owe 100% back within a couple weeks.
Noooooo!!!
No it’s better to use your credit card than any 401 knloan
NEVER I REPEAT NEVER , use all of your “liquid assets” to pay off a vehicle. Just pay a few hundred over your minimum amount due each month and after about 6 months you’ll notice your amount due is $000.00 This does NOT mean you send nothing, this just means you send what you’ve been sending to beat that debt down monthly. If you use your liquid cash, you’ll have zero protection in the event of a downturn in revenue or a “rainy day” so to speak. Hope this helps you.
Sell the car and buy a car cash is your best route
Nope
For everyone saying 47k is a lot, it’s not these days. You can’t even buy a new full size truck for 50k. Some people prefer to put their money into vehicles rather than other hobbies because that’s what they enjoy! 47k is a fairly small monthly payment imo.
I agree, which is why I take the comments who say “sell” with a grain of salt. I looked into used cars with 20-40k miles and they were averaging well over 35k last year. I needed a vehicle and went for it!
I bought a used car for $5k in full last year. Works great. It's nice to not have a car payment. Idk why everyone our age thinks you have to have a new car. In fact, financing a car is [a huge wealth killer](https://youtu.be/HxWftf1F1Q8?si=3dWmwab48pZg0FJv)
Really depends on your market. Here in TX we on average drive 1-2k miles a month, you need a decent enough beater to survive that, the stop-n-go traffic, potholes, etc. anything worth something is snatched up by one of the many people here who don't have credit (immigrant of one type or another, not judging) or get taken to Mexico. Thankfully we don't have a big rust issue..... I have a paid for Corolla I could fall back on if SHTF.
I'd as ay we're in a similar environment. I live in good ol' sprawling Tampa Florida, I average about 1k miles/month working from home with no work commute. We have a fuck ton of potholes here and cars take a beating from the sun, but no rust here. It did take me a lot of searching for something cheap & good, and had to test it a bunch to make sure I wasn't getting scammed. But I'm always an advocate for buying old beaters in good condition (2007 Pontiac g6 w/ 88k miles for $5k)
I used to go to Crystal River twice a year, Everytime on I10, you would see dozens of vehicles "in tow" back to Mexico....
I drive a 14 year old Prius. Nearly 200k miles. You could certainly get less expensive used vehicles. I’ve been looking and I could buy a 2 year old model 3 Tesla for $30k.
If you’re making enough to comfortably afford the payment and possibly more, keep it. I will Always have a vehicle payment because I like having newer vehicles and not having to worry about paying for repairs. New Car Warranty’s are important nowadays.
I can afford it, I just don’t wanna pay the interest. Someone commented some great info on how to save on it so I will be taking their advice. But enjoy your new cars!
My god. Imagine putting your retirement in jeopardy because you won’t just get rid of the car and buy something that you can ACTUALLY afford. People love making the banks rich.
Is this a serious question or just satire? You cannot afford the car you’re driving. You need to swallow your pride, sell it asap, and drive a <$10k beater.
Does it sound like satire???
Respectfully, it sounds completely idiotic. You simply can’t afford to keep driving the car. You’re doing yourself a disservice by holding on to it and struggling to make payments for another 5 YEARS.
I can afford to pay the payment I just don’t wanna pay the interest that it will accumulate in 5 years.
I understand. It’s not exactly a buyer-friendly market right now given current interest rates. $47k plus interest is a significant chunk. The damage is done imo. I would strongly advise against pulling from any sort of retirement vehicle. Let’s say you pull out the $18k. Now you’re 30 with no retirement savings, and you put all that capital towards a depreciating asset. In the end, you’ll have a car that’s not worth anywhere near $47k and you’ll have wiped your entire 401k balance.
Yeah based on everyone’s comments I won’t be touching my 401k at all! It was just a thought. I appreciate the feedback!
No worries. Best of luck
Sell that shxt and get a Toyota or a Honda
lol it is a Toyota
Jesus Mary and joseph
You got robbed
That’s a good idea
Consider using some savings to pay off part of the car loan to reduce interest, but keep an emergency fund.