Can I pay off the car loan for my BMW early?

I got a 60-month car loan for a BMW about three years ago. I have the cash to pay off the rest now. Can I do this?

Answer
Not only car you pay off the car loan on your BMW, but it may be a smart move to do so!
If you have the cash to pay off your car loan, doing so can provide a number of benefits, including:
  • No more monthly payments
  • More financial flexibility
  • Saving on interest
However, you will need to check with your lender to make sure they don’t have any prepayment penalties. These penalties are often 2% to 4% of the remaining balance of the loan, and paying it off if you have a penalty may actually cost you more than just paying the entirety of the loan. That said, the pros generally outweigh the cons.
After you pay off your BMW, you have one more important decision: car insurance. Since you’re no longer required to have full coverage, you can choose to keep it or you can choose a different type of coverage. Whatever you decide, use the Jerry app to compare quotes from up to 50 different insurance carriers.
Eric Schad
Answered on Oct 21, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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