[bjl584]

Interest rate doesn't matter to me. I'd rather have no debt than to have debt at a low interest rate. Of course, I would never finance a car in the first place. It's a depreciative asset. I only pay cash for things like cars. Being that this couple is just starting out with their first home, I'd say that they can benefit more from the extra $400 a month toward their expenses than they could by holding onto the car loan (which may be at a low interest rate) and investing the rest in a high interest account. If they were already established and had been in the home for a while, then I'd say that paying the minimun on the auto loan and investing the rest would be the best idea, but for now I'd want the extra $400 every month for those unexpected costs that always come up when someone first moves into a house.