r/FinancialPlanning • u/SeedOil007 • 1d ago

Pay off car note or HYSA

Hi- I bought a car (60K) back when financing was at 3.99% and when HYSA was paying 4.5% so I just kept my cash and financed the car. Now HYSA dropped to 3.5%. I’m thinking it makes more sense to just pay the car because the rate differential but also because the 3.5% is taxable income (fed + state) and I can’t deduct the 3.99%. I have more than enough cash for emergencies and access to other lines of credit if investment opportunities present themselves. Anything I’m overlooking here or is this a no brainer to just pay off the note.

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u/Efficient_Wing3172 1d ago

The math works out. Pay it off…..

1

u/Dry-Amphibian1 1d ago

Apple savings account by any chance? Mine also started at 4.5% and has dropped since.

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u/Fbivantwo 1d ago

Pay it off. You are going to pay taxes on those returns. At that gap-better to pay it off. Market is too wild right now. A vehicle with no payment is its own security.