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Originally Posted by Sweepsplayer
That's a common misconception. Whether the underlying asset depreciates or appreciates (or even if there no underlying asset at all) is irrelevant. A debt is a debt. If you pay off a debt with an effective interest rate lower than another debt you may have, you're worse off financially. Similarly if you take money out of savings to pay a debt with a lower interest rate than you were earning from your savings, you're worse off financially.
Not to say there isn't a psychological component involved. If someone feels better paying off a car loan just because it's a car loan, I can't argue with that. But it probably wasn't the best financial decision.
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I'd be curious what Warren Buffet or Bill Gates might say. Are all the best financial decisions based only on the numbers?
I think I've heard Buffet refer to chosing a company based on the intrinisic values of management or the product itself...not to say he doesn't look at the numbers, but their are always other factors involved besides the numbers.
If it were me...I'd still pay off the truck and use the $400 towards paying down the mortgage. I like the simplicity of one payment.