“In 2023, the average monthly car loan payment in the U.S. was $726 for new vehicles and $533 for used ones.“
– Experian.
That is crazy!
Hek, I thought the $350 a month in 2009 I was paying was a lot.
Let’s do a quick car loan scenario.
It’s 2023, and you buy a brand new $48,000 car (because that’s the current national average).
You get a loan with a 6.88% interest rate.
Your loan length would be 72 months.
Do you want to guess the total amount of interest you would pay?
I’ll tell you…
$10,722!
You could backpack all of Europe and create memories with the amount you spent on interest!
I bet you want to see the world instead, huh?
Well, it’s your lucky day.
Today, I will show you how to repay a car loan quickly.
These same tips are the ones I followed to pay off my brand new 2009 burnt orange Chevy Colarado.
So, if you’re interested in finding out where to buy a cheap vehicle, how to save 50% of your income, and much more…
Then, enjoy the helpful read.
How To Pay Off a Car Loan Fast (3 Simple & Effective Tips)
Look, I’m not gonna bury the lead.
You only need to buy cheaply, save 50% of your income, and make more money.
But…
Those are just the main categories.
Let’s dive into some unique resources and tips to help you accomplish those three things.
Tip #0: Buy Cheap
This is called Tip #0, just in case you haven’t bought a vehicle yet (fingers crossed 🤞).
And if you haven’t, here’s some options
Military Lemon Lot
Oh yes, the ever-so-awesome lemon lot.
I have both bought and sold vehicles on a lemon lot.
I have also seen coworkers get free vehicles and use them for ten years.
“What’s a military lemon lot?”
It’s essentially a lot for used vehicles that military members or family members put for sale.
A lot of times, it’s because they are going overseas, but sometimes, they just want to get rid of a vehicle.
This is where you can step in and find gold.
Here’s a couple of options:
- ResaleLot.org: Invaluable resource for finding affordable used vehicles, often from military communities. It’s a user-friendly platform where active-duty military members, veterans, and their families can list their vehicles for sale, particularly when facing deployment or reassignment. This site offers the potential to snag a great deal as sellers are motivated for quick sales, ensuring buyers may find well-maintained vehicles at a fraction of the cost, allowing for significant savings on your car purchase – savings that could contribute to paying off a car loan much faster.
- Militarycarlot.com: Another great resource for finding used vehicles on military bases. This site allows users to filter their search by different military installations, making finding affordable options in your area easier. Also, YOU DO NOT HAVE TO BE MILITARY. So enjoy the discounts!
These two options should be your first stops before you buy a vehicle.
Facebook Marketplace
This has quickly become a popular platform for buying and selling vehicles, with the added benefit of connecting with local sellers.
You may find fantastic deals on quality used cars using keywords specific to your location.
The platform’s built-in messaging system allows easy, direct communication with sellers.
Just do your due diligence before purchasing, and always meet in public.
Craigslist
A classic platform for finding used cars, Craigslist can offer great deals if you search strategically.
Again, using keywords specific to your location can help narrow the search and potentially lead to significant savings.
Review the vehicle’s history and request a test drive before finalizing the purchase.
Also, be cautious of scams and always meet in a public place.
Police Auction
You can also check out local police auctions where seized vehicles are sold at discounted prices.
These vehicles may require repairs, but the savings could be worth it.
Just be sure to research the vehicle beforehand and budget for any necessary repairs.
Red Tag Sales
2009 I bought a brand new 4×4 Chevy Colorado for about $16,000.
It was a red tag.
I scoped it for a month.
No one wanted it, so I jumped on it as time passed!
Do yourself a favor.
If you want brand new, take your time, look for Red Tag sales, then act and bargain!
I’m telling you, if you want to pay off a car loan fast, it starts with buying cheap.
It doesn’t necessarily have to be a used car; you can buy a new one.
Whatever you do, just buy within your means.
Look for functionality, not name-brand booties.
You’ll thank me in the long run.
Now on to Tip #1.
Tip #1: Save 50% of Your Income
I know, I know, saving 50% is impossible!
No, it’s not. I can speak from experience.
It just takes time, discipline, and consistency.
That’s it!
Well, mostly it.
I’ll show you what else you can do:
Stop Impulse Spending
If you sign up for our newsletter, we’ll give you a free impulse buyers guide.
It’s a handy checklist you can use on your phone when shopping.
So, for example, if you’re going to Costco for groceries and you see an oh-so-attractive TV, you bring it up and start asking questions like:
- Did you get paid?
- (If NO, STOP HERE. DO NOT BUY; if YES, move on)
- Did you pay your bills?
- (If NO, STOP HERE. DO NOT BUY; if YES, move on)
- Is this a necessity? ( Groceries vs PlayStation)
- (If NO, STOP HERE. DO NOT BUY; if YES, move on)
- Is there a sale?
- (If NO, STOP HERE, DO NOT BUY; if YES, move on)
- Can it wait two weeks? (i.e., Sale ends today)
- If NO, move on; if YES, DO NOT BUY)
That checklist will force you to stick only with the necessities on your list.
I highly suggest you start using that.
You’ll be surprised at how much you save.
Learn to Say No
Life is about having fun.
But not at the expense of your bank account to the point where it makes you stick out the whole car loan.
Or, even worse, get behind on your payments.
You can still have fun with your friends but must start finding a middle ground and creating boundaries.
What am I talking about?
The next time you’re friends go out to eat, suggest a pig-in at your place.
The next time you’re invited to the movies, suggest going half and ordering the movie at home.
“No thanks. I just saw that the new Marvel movie was on demand for about 18 bucks. Let’s go half, and I’ll air-pop some popcorn.”
You could save 50% or more by watching it on your couch rather than seeing it on the big screen at the crowded, people-infested mall.
Walk, Bike, or Carpool Whenever Possible
Just because you have a new ride does not mean you have to use it 24/7.
“In 2023, the average American spent about $200 a week on gas.”
-J.D. Power
That’s a whole lot of cash.
Do this.
Find someone you work with who lives the same route and see if they want to alternate weeks of driving.
That’s 50% saved right there.
Or, check to see if your workplace has a commuter van.
That way, you can commute with a group to work and drive your vehicle on the weekends.
If you know some safe back roads, ride your bike to work.
Use your vehicle only for necessities, and you’ll soon be able to pay off that pesky loan.
Buy in Bulk
As I type this, my wife is at Costco buying our week’s worth of groceries.
“In 2023, the average consumer saved about 83% when buying bulk.“
-The Balance
I can attest.
I watched our savings account grow when we started shopping mainly at Costco vs. stores like Krogers or the on-base Commissary.
Costco’s grass-fed burgers are $5 instead of $13 elsewhere.
Same as frozen organic blueberries.
Also, you get them in bulk. We were talking $ 7 for 5 lbs, as opposed to $14 at other stores.
You do not need a family of four to shop at bulk goods stores.
I used to think that.
It was just me and my wife when we first got our Costco membership.
Our friends kept trying to get us to sign up.
We asked, ” What will we do with 60 toilet paper rolls?”
Fast-forward: We finally got one and discovered that many of the bulk items could fit a single-person lifestyle.
Get yourself a Costco card today, and start paying more on the principal of that car note.
Telework Whenever Possible
If Covid was good for anything, it was the age of teleworking.
Before Covid, you had never heard of remote working.
After COVID-19, getting folks back in the office is extremely difficult!
Hek, if I had it my way, I would work from home as well.
That $200 a week we spoke about in gas per week?
That car loan would not stand a chance.
For example, for that 72-month loan, we referenced at the beginning.
If you saved that $800 in fuel and used it on the loan, it would take you only around 32 months versus the whole 72!
So, do yourself a favor.
The next time you go to work, ask your boss if there are any work-from-home opportunities within the company.
You’ll never know if you don’t ask!
Tip #2: Make More Money
Yes.
Make more money.
You can only save so much.
But if you want to obliterate those car payments, start making some extra mullah.
How can you do that?
Here, I’ll show you.
Your Job
That’s right.
The easiest way to make more money immediately is to work more at your job.
Just work more.
Ask your boss for overtime.
Work some holidays.
Do what you have to do.
Another route you can take is to get a raise.
Just march into your boss’s office and demand a raise.
If he doesn’t give you one, just quit.
JOKING.
Well, about the quitting part.
You can do the raised part more tactfully.
Try this.
Ask to have a meeting with your boss.
When you have the meeting, you ask him if you would like to know how you can become the top performer in the office.
He or she then tells you guidelines to follow.
Ask him, “Once I fulfill these accomplishments, can we schedule another meeting to discuss compensation?”
That is much better than storming into his or her area and aggressively requesting more money.
You can also Google “How to ask for a raise.”
Study that, then execute.
Side Hustle
Oh yes, the side hustle.
An ultra-common phrase.
I’m not gonna dive too deep into this one.
I’m just gonna shoot you a list:
- Become a virtual assistant
- Offer freelance services (writing, graphic design, social media management)
- Start an online shop or sell products on platforms like Etsy or Amazon
- Babysit or pet sit for extra cash
- Drive for ride-sharing apps like Uber or Lyft
- Rent out a spare room on Airbnb
- Do odd jobs for people on TaskRabbit or Craigslist
- Create and sell digital products, such as ebooks or courses.
You can even combine a few of these options to boost your income.
The possibilities are endless, so find something that aligns with your skillset and interests.
Quick Cash
Another way to make more money is by doing odd jobs or tasks for quick cash.
Some ideas include:
- Participating in online surveys or focus groups
- Doing grocery deliveries for services like Instacart
- Walking dogs through apps like Rover
- Selling items you no longer need on platforms like Facebook Marketplace, Poshmark, eBay, or Depop.
The best part about quick cash is that you get the money immediately.
That dopamine fix can keep you motivated.
So the next time you’re watching the new Spiderman, hop on Survey junkie and earn yourself a few bucks.
You’ll be hooked on easy money, and your loan will soon be a thing of the past.
Recap
Alright, what did we discuss today:
- If you want to pay off your car loan fast, you need to purchase a cheap car. You can find lower-priced vehicles at places like police auctions, military lemon lots, and Craiglist.
- The next step is to save 50% of your income. If you avoid impulse shopping, buy in bulk, and learn to say no, you’ll be well on your way to a car-loac-free life.
- The final phase is making more money. Work more hours or start walking dogs after your 9-5. Use that extra cash toward your goal.
When you are in debt, you are basically a slave to the creditor.
If they tell you to jump, you have to say how high.
They now have a piece of real estate inside your brain.
They let you borrow money and planted their flag inside your little head so you will always know they are there.
That’s a stressful way to live.
Life is hard enough; you don’t need anything else to worry about.
So, do yourself a favor.
If you are reading this and you haven’t purchased a vehicle yet,buy cheap, start saving as much as you can, and think about making some extra money on the side to help you pay that loan down as fast as possible.
Good luck on your financial journey.
Have a fantastic day.
Hello! I'm Charles. 1st gen millionaire, real estate investor, health enthusiast, and military veteran. In the last 17 years, I have managed billions of dollars of resources for the Department of Defense. Created financial management plans that enabled fellow service members to get out of thousands of dollars in debt and tailored wellness plans that helped people reverse and eliminate high-blood pressure, pre-diabetes, and obesity. Learn more about me here.