Saturday, November 11, 2006

 

Math mistake in my favor and it paid off my car


I bought my car in November 2002 and financed it for 5 years at a fixed monthly payment of $242.99. I've been paying the exact same amount every month so I know exactly how much I have left to pay off, one more year of payments: $2915.88. But Chase Automotive Financing is weird people or at least that's what I thought. I receive a bill every month in the mail that never matches what my online account says, its always much less. I called and they said that I must have overpaid at one time which is why the payment due is less than what my online account says. I was still confused as to why the paper bill didn't match the online but decided to ignore it and just keep paying my fixed amount. Well today I went online to pay my bill and happened to notice that my payoff amount was only $693 not $2915.88. I thought Chase must have made a mistake but woo hoo, I transferred enough money out of savings and paid that puppy off!! Yippee!! I was doing a happy dance thinking how nice it was of Chase to make a mistake in my favor when I remembered...I made the mistake myself. Way back right after I bought the car, I made a lump payment of 6k towards the principle and then completely forgot that I did so. Which explains why what I actually owed was not what I thought I owed...what a dork!!

But I am happy dancing anyway because I am still car-payment-free a year earlier than I thought, which means that I can start putting that money in my emergency and unexpected expenses accounts even faster. And my net worth will go up!

The moral of this story is, math mistakes are not always bad, but I need to do a better job of remembering and tracking when I make extra payments towards debt. I was lucky this time that it all worked out in my favor.

2 Comments:

Anonymous Super Saver said...

Banks are usually pretty good at doing the math correctly :-) If they made even .01% mistakes, there would be lots of unhappy people and they wouldn't stay in business.

That's why I no longer reconcile my checkbook with the bank statement. The bank has always been right when I found a discrepancy. Not balancing my checkbook saves me at least an hour every month:-)

It was good it was a happy ending for you.

4:39 PM  
Blogger enoughwealth@yahoo.com said...

I'd be more worried that paying 6K up front apparently only reduced your total repayments by $2,900ish. It should have knocked off more than $6K off your total repayment schedule. I think it's still worth checking bank statements for loans - apparently the error rate is quite high. Unfortunately, getting the exact payment calculation formula out of lenders is like pulling teeth - they will give you the rate and fees, but often don't say if interest is calculated daily but capitalised daily or monthly, or if the annual interest rate is divided by 365.25 to get the daily rate of what.

Regards
http://enoughwealth.blogspot.com

7:52 PM  

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