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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?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
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. View full answer
- Gregory R.
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