Woohoo! 5 Quick Things To Do When You Pay Off Your Car [Checklist]

We paid off the car loan.

We wanted to share it, so I announced on Twitter last week that we had paid off our last car loan, leaving us with only student loan debt and a mortgage. Sweet!

I appreciate all the congrats tweets you guys sent back. (follow me @ptmoney)

It feels really good to have paid off this debt. The interest rate was just way too high. Now we can begin thinking about prepaying some of the student loan debt that's been around way too long.

We have high hopes for being able to do that this year, but want to wait and see what happens with the baby. Things will change a bit, right?

Anyway, in a response to my tweet, @Finc_Confluence (who blogs at Financial Confluence) tweeted in with this excellent point about car insurance:

“Consider evaluating your Ins. coverage. Requirements are higher when there's a lien on the vehicle. Now, you can decide!”

This is a great point. It got me thinking about all the other things you should do once you truly own your car:

Have you paid off your car loan? Are you ready to celebrate?! Here are some of PT's ideas for how you can celebrate and start using that extra money for other things.

1. Take Time to Celebrate

First, give yourself a good pat on the back for knocking out this debt. Consider a celebratory car wash and a photo op next to your car with the title in your hand. 😉

2. Give a New Purpose for the Old Debt Payment (Adjust Your Budget)

Since you no longer have that debt payment, make sure you designate a new home for that money. Don't just let it get absorbed into your frivolous spending.

Decide whether you want to pay other debts with that money, or build up some savings? How great is it to have more breathing room in your budget!

3. Get Your Title and Store It Safely

Getting your title once you pay off your loan can actually take a long time. Try to avoid putting yourself in a situation where you need it fast (like selling the car).

Some states have the lien holder (the company that you made loan payments to) physically hold the title. If you're in one of these states, you're likely to get your title back pretty fast (as soon as your payment clears and they have time to notify the department of motor vehicles in your State).

For more information on getting your title, see http://www.dmvlist.com/.

Once you get your title, store it in your home safe…not in the car itself. Go ahead and snap a picture of the title too just so you have a digital copy for quick reference.

Lastly, be sure to check your credit report and ensure that your car loan is listed as paid off.

4. Enjoy Your Debt-Free Ride

Lastly, I'll just add that you should count your blessings and soak up that paid off car feeling. That's what I'm doing. With your new extra income, you can now afford to buy something you've been putting off -like a fun vacation or a new TV.

5. Re-Evaluate Your Insurance Coverage

As mentioned above, your insurance coverage *could* be lowered. Call your agent and see what they can do. I recommend also running a quote to see if you can get more affordable auto insurance elsewhere:

Visit GEICO Car Insurance to get a free auto insurance quote today! Find out how much you could save.

Bonus Idea: Turn Your Car Into a Money-Making Machine

Now that you own your car free and clear consider using it to start a little side-hustle to bring in extra income.

You could start driving for Uber or Lyft (both of which are offering big bonuses to sign up and start driving).

Can you think of some other things to do when you pay off the car note?

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Last Edited: January 29, 2018 @ 2:33 pm
About Philip Taylor

Philip Taylor, aka "PT", is a former practicing CPA, blogger, podcaster, husband, and father of three. PT is also the founder and CEO of FinCon, the conference and community dedicated to helping other financial influencers and brands. He created this website back in 2007 to share his thoughts on money, hold himself accountable, and to meet others passionate about moving toward financial independence.

PT uses Personal Capital to keep track of his financial life. This free software allows him to review his net worth regularly, analyze his investments, and make decisions about his financial future.

PT keeps a portion of his emergency fund in Betterment, the automatic investing tool that makes investing super simple. Betterment focuses on what matters most: savings rate, time in the market, investing costs, and taxes. PT recommends this service to anyone looking to get started investing for themselves.

All the content on this blog is original and created or edited by PT.


  1. Carl Frederick says:

    First, PT, congratulations on paying off the debt!
    Sorry to be the conspiracy realist, but you still do not own the vehicle.  In fact, you own nothing.  No American citizen taxpayers own any property, period.  The illusion of ownership exists, but in reality, you do not own your vehicle.
    Well, then who does own it?
    Refuse to pay your car taxes, and you will quickly discover who really owns the automobile.  Ownership implicitly implies complete control of and possession thereof.  How can you own something, but the local/state/federal government can seize it, and possibly attack your character, fine you with financial penalties, and potentially even arrest you and hold you against your will?
    What if you refused to pay fines from parking tickets?  What if you refused to pay moving violation fines?  What if you decided you would rather not pay for a registration of your vehicle, refuse to pay for emission testing, etc.?

    Please stop and consider this.  Now, apply what I just stated above, to your home.  

    You own nothing, because slaves are not allowed to own property.

    This is not an argument about the “moral obligation” to pay property taxes, so roads and schools and fire fighters and police can function, all considered necessities for a civil society.  The argument is ownership.  And if you refuse to do something (exercising your free will, disallowing coercion), in this case, paying money to an government entity, and as a result of your free will decision, your property can and will be confiscated; in plain words, stolen.  This can not possibly be true if you are the owner.

    Peace be with your spirit, please consider my words.

  2. Should you payoff a 2.49% $6,500 car note that is scheduled to be paid off in 14months?  not strapped for money right now.  Just trying to decide whether to put my cash in my investment accounts or pay off the note then make these payments towards my investment accounts.  Decisions, decisions?

    • Philip Taylor says:

      @YR Yeah, that’s a tough call. I think you need to factor in things like how happy you’d be to be debt free of the car note. There are more emotional factors here than technical/financial ones. Dave Ramsey says to help sort this out in your mind, ask yourself if you would take out a 2.49% loan to invest with? If you wouldn’t, then you probably should get rid of the debt.

      • @Philip Taylor Thanks.  I have been visiting a few other website by far this is the easiest to understand from my perspective.  I appreciate the reply.  I will be paying off the car loan and sending the payment directly to my investment accounts.

  3. I found this blog by searching Google for “What happens when you’re done paying off a loan”. I see from your blog that there are no additional steps to do for that loan after it’s paid off… i was sure there would be, considering all the crap you have to do to get it. Maybe a “Good-bye!” or “Congrats” from the lender 😛

    Anyway, congrats on your loan payoff!

  4. I’ll be done paying my car loan in November, can’t wait. But I hate that I’m already thinking of leasing a new car which will drain more money than my current car payment.

  5. Thanks, Elliot!

  6. Way to go. I think so many people forget that a car is an expense. That is a nice burden to not have to pay every month.

  7. karla (threadbndr) says:

    re titles – they should be registered with your state or county. You can request a certified or replacement copy for a nominal amount. When you get it, there should be a place that lists any lein holders. Be sure that area is blank. If not, contact the lein holder to get a lein release.

    Funny story. Paid cash for my last car, using a cashier’s check from my credit union. The dealership paperwork showed that there was a lein to the credit union. So AFTER the title was processed, I had to haul it to the credit union to get a release for a lien that never existed in the first place.

    Another reason to bank at a local CU – bet I couldn’t have taken care of it over a lunch hour if I banked with a national ‘chain’ bank.

  8. I would call my State’s dept of motor vehicles and ask them. They should have a process for this.

  9. Amy keller says:

    I paid off my Saturn yrs ago and never received the title to the car. We are trying to get rid of car but need title to do so.The place we financed with is no longer around. What can we do???? It frustrating. Thanks

  10. Mr. Plasectomy says:

    Congrats! You must feel fantastic and I bet it just got a little bit easier to breathe.

    1. I would give it a nice car wash and wax, complete detailing, unless you live in the great white north of winter and then I would give a nice car wash to get rid of the salt.

    2. Fill it up! I bet all of sudden your miles per gallon will increase with out that payment.

    3. Check the insurance to raise my deductibles or even get rid of the collision coverage depending on the age of the car.

    Congratulations to you again! Very inspired by your success!

  11. Gooooooooooood work son! It’s a might fine day in your neck of the woods – soak it all up 🙂

  12. Ummm….that was the second most awesome rap I’ve ever heard (first place goes to PTMoney’s PYF challenge rap, of course).

  13. Congratulations! That’s terrific!

    When I paid off my car loan I continued to make a payment, but this time it was to myself. My savings account grew large enough that I’ve been able to pay cash for our last two cars (though I did put as much as possible on credit cards so I could get the reward, then paid it off immediately).

    Because you do have a baby on the way I agree with your plan to not earmark the additional money towards paying off other debt yet, but I’d still likely throw an extra $25 a month towards principal while you wait and see (that is, if you have a sufficient emergency fund). You likely won’t miss it, and every little bit helps.

    About changing your insurance coverage, remember that the only two coverages that have anything to do with the type of car you have are Comprehensive and Collision, as those are the only two coverages that are on the car itself. You don’t want to reduce your liability or uninsured motorist coverage, as they have nothing to do with the type of car you drive; you can do just as much damage with a brand new car as an old clunker!

    You need to find out how much you pay for each of those coverages, and determine your deductible. Get quotes for raising the deductible and for eliminating the coverages altogether.

    I suspect you’ll find that you won’t save as much as you think, especially with Comprehensive coverage. And if you remove them you will be completely out of luck if you get into an accident that is your fault, if it’s a hit and run or if the at-fault party doesn’t carry enough coverage to fix your car. Also, you’d have no coverage if it’s stolen, damaged in a hurricane, etc.

    That’s almost an entire post right there, but believe it or not I have more to say on this subject. I’m going to write a post about this on my own blog, so look for it!

    And once again, congrats for paying it off!

  14. We paid off my car in August of last year. But we ended up going into debt on my wife a newer car so we’re only saving an extra $100 a month which goes into paying off student loan debts.

  15. Congrats! My advice it to take the (former) car payment and split it between paying off debts and saving/investing.

  16. You are so right about the lien! Make sure you get it either in your name or with a letter stating your loan was paid in full. I didn’t realize I was missing my lien when I traded in my car. The dealer was able to get it for a small cost but it was something that could have held up my purchase.

    When I paid off my last car the money all went into savings each month. That felt great!

  17. The Happy Rock says:

    Awesome PT. We have been driving paid for cars for over 4 years and it is great.

    You might want to think about saving for a replacement depending on the age of the car. It is much easier to save $50 a month for 5 years and have 13k rather than wait till the car is on its last legs.

  18. I love the idea of a celebratory car wash. I tend not to have my car washed because I don’t want to spend the money, but I know that it is good for the car to be clean once in a while. What an appropriate way to celebrate!

  19. Credit Cards UK says:

    Thanks, that’s excellent advice.

  20. Yay! That’s so awesome that you’ve paid that off. Looks like you’ll be able to take your baby home from the hospital in a paid-for vehicle! I’m jealous!

    We have about $6k to go on our car loan, and then we’re done. Soon enough! And I’ll definitely take it for a celebratory car wash 🙂

  21. Congrats! We paid off our car last year, and it felt great. We take the money and put it in a “car fund.” When our car dies, or needs repairs, we can just take the money from the car fund. What we’re really hoping for is that the car lasts long enough that we will be able to pay entirely with cash from the car fund when the time comes to purchase again.