Cash in hand towards current loan or as down payment on new?

keep it and save your money, drive it till it dies and by then you'll have enough to pay cash for a new or newer one...vehicles are money pits..

 

This could’ve been mentioned, I just merely skimmed over the responses on the first page, so forgive me.

I’m in the same boat at the moment, weighing options. I have a 1st gen Tacoma and a Z71 I’m selling and going to buy a 3rd gen Tacoma for replacement. I was questioning weather I should sell outright or trade in.

There’s no doubt you’ll take a beating trading the truck in. You’ll most def do better selling outright EVERY SINGLE TIME. Buttttt, trading in has its advantages. 1- youre just done with it. No one there to beat you up with all the BS that comes with selling. No having to deal with 24 phone calls, 7 in person meetings dealing with tire kickers... and chances of the people calling you after the fact if something goes wrong shortly after the sell. 2- the main one. You’re taxed on the REMAINING amount. So the beating you take on trading it in, may make up for itself. Using random, easy numbers. Say the truck you’re wanting is $30k. Say you can get $10k for your truck by selling it and you’re putting all that down on the new one. You’re still paying taxes on that entire $30k. Say for trade in they’re wanting to give you $8k. $30k price of new truck minus $8k trade in, youre remaining number is $22k. You’re only gonna be taxed on that $22k, not the entire $30k. So the lesser amount you get for trading it in, it may make up for itself on the back end. Just food for thought.

 

Unless you sell it to Carvana. The come to you, cut you a check, and take it with them.

 

THIS. This is what I was referring to. Obviously there are variables (offer on trade in, remaining balance on current loan, new truck price, etc.) The less I owe on the current note = lower sell price on a new truck (when trading in) and therefore less tax paid & less interest paid on said taxes. Did some quick/dirty math and up front it'd be a couple hundred less in tax & that could save several hundred in interest as well.

I'm all for getting the best offer for my current truck but as you said: at a certain point the CL & FB back-and-forth can be a lot of time for not.

 

OP, I love these kinds of discussions. I find them interesting from a strategy perspective -- and, to be honest, there is no one right answer.

A few things to think through:

First, do you really need seat warmers? Or, and it is okay if this is the case, are you simply enamored with getting a new vehicle and some upgrades? Nothing wrong with that. You have a vehicle that is four years old. And you saw something new and shiny and got excited. Good for you! What is the point of living if you are not enjoying it. I assume you are doing so responsibly ... so go for it !

Second, get off the clock! It sounds like you are excited (again, nothing wrong with that) but you are making a rushed decision it seems to me. No good financial decisions are made when you are on the clock.

The buy issue is going to be your bigger task to handle. You will likely sell your truck quickly -- and for a good price. The hard part will be in finding a replacement one -- as you know. If you can't think through the timing issue you will be forced to do a trade in and that could be okay -- depending on the dealer -- or not okay. If you can't think that through you will be in a weak position regardless of your cash position and your credit.

Here is what I would want to know in terms of the math before I even think about this:

1) What is my truck worth if I sell it privately?
2) What is the dealer willing to give me on a trade in?
3) How much would it be to rent a car (if I had to) while I found the right truck?
4) Can I find the right truck and for how much?

For example, say I can sell my truck privately for $5K more than the dealer is offering. Maybe I can. Maybe not. If I rented a car for, say, two months, would I still be ahead of the game by several thousand dollars? Probably.

If I were in your shoes, here is the strategy I might employ. Just thinking out loud. I know I have a great asset that I can move quickly -- either through private sale or trade in. We all know this based on the market for used Tacomas. You already know the dealer will give you decent value on the trade in. So I go out and find the truck I want and lock that down. As soon as I do, I start the process of selling my truck. When it comes to actually getting the truck, I can figure out the timing. If I sell a few days before, I just rent a car to get me to the day I pick the truck up.

You can manage the timing. The numbers will tell you whether or not it is worth the effort to do so.

Good luck ! Definitely post back what you end up doing !

 

I'm 80% not likely to pull the trigger. I ran my '99 Tacoma for all she was worth and then a good bit more--should have replaced it a couple years earlier but wasn't in a place to take on a loan for a reliable replacement so I coughed up the $300 there, $200 here. I'm unlikely to get into a similar situation going forward, that's to say I'm by NO means loaded but in a much better situation now. And yeah, I'm enamored with the shiny new thing but there is also knowing that 'hey, I can do it an not be in a bad spot financially'. Financially, obviously it makes more sense to finish the note and have zero debt. I seriously doubt most people are walking in and writing a check for a new vehicle, though they seem to be loud & proud on here.

Lastly, I'd love to drive another Tacoma for 300k. If I truly think I'm going to own another vehicle for that long, why not get one within my means that I truly want?

 

I think you answered your own question. Sell your existing truck privately, trade in they will dog you. Get what you want. Tomorrow is not promised to ANY of us!

 

Generally, this is NOT a good time to buy. - There are no deals to be had. (And few tacos as you really want them!). This will get worse, I think. (due to production issues).

I'd sit it out six months... Get the set heaters....
(see your truck's value incease maybe?). Maybe sit out a year - or two.
This will likely get you a good tech improvement, maybe more features you'll REALLY NEED - maybe a better deal on a 4th gen. Or an Electric Truck!

 

Does Toyota ever offer deals on Tacomas?? Maybe when there is a body change and to move the last of the prior model year?

 

They offer deals but from what I have seen they are not huge. You will from time to time see cash back or low APR. In general, if you get 10% to 15% off MSRP, you did pretty well.

You may have to travel to get the truck you want. Lots of folks in Cali travel to AZ, for example. Availability is still tight -- but not as bad as it has been. It also depends on the market you are in. I am not sure what the allocation looks like for Maine. In NY (and the tristate area) there seems to be a reasonable supply. Maybe expand your search and contact out of state dealers -- that may make sense depending on where you are. Nothing wrong with a road trip with the wife!

For example, I drove a ways to a dealer in CT that had reasonable inventory and good prices. But then I was not looking for specific features or a. specific color.

That dealer appears to have 11 Tacomas in. Just an example of what you might find if you can go farther:

https://www.torringtontoyota.com/new-vehicles/tacoma/

 

IMO, you should never do a trade in. You will always lose financially. If you're willing to lose money to save a hassle then by all means, go for it. But just understand the trade off you're making and what you're losing.

You said you have some cash, so you should be able to put down a deposit on the new truck and handle double car payments for a month or two while you sell the old one. If you get the current truck prepped and listed before buying the new one the timing may work out well. And, with many buyers you could probably work out a deal to take a deposit so you can keep the truck for a couple weeks if needed. With the value and demand of these trucks on the used market I think you could sell it really quick as long as you know how to properly prep, list and sell a vehicle.

Around here I could probably sell it within a couple weeks for $5k more than what the dealer will give you. I could probably sell it in a couple days for $2500 more than the dealer will give you. Of course, my area is a little crazy.

If you don't have the cash to pull off the above suggestion then you shouldn't be considering a truck upgrade in the first place and should be saving, saving, saving.

 

@averagejp nice! Nothing but the mothership's $500 off at all the Maine dealers. But will expand if/when I go for it. That said, Torrington is 20min from my aunt so could plan accordingly.

 

dont forget state tax for a vehicle bought out of state has to be paid before you can register it. lots of a people think they can get away with buying a vehicle in NH, no sales tax... then you get hit.... do some research.

 

@Scott17818 haha!

 

agreed But the rules change when you are trading in a vehicle thats on its last leg. Dealers do a good job overpaying for those.

 

You should get a credit for whatever sales tax you did pay on the vehicle, though. So for example, if your state is 6% and the other is 5%, you should only have to pay the additional 1%.

 

Maine has a USE tax...so yes, pay the difference.. lots of Mainers think they can go to NH, and buy a vehicle/atv/boat cheaper.. till they try to get it registered..

 

Being that you are in Maine, how much rust do you have? You are probably at the point where it starts the down hill slide and you could reset the clock by starting new. Normally I would say stick with what you have, but your value in what you have will start to take a steep drop as the effects of road salt begin to show.

 

@Sungod yup & that is on the mind as well. There is surface rust on the belly even with regular rinses

 

https://m.youtube.com/watch?v=hgtondzh5l8