Cash or finance new truck

If inflation is skyrocketing why would you pay cash?

 

Because my $1000 cash will be worth $930 in current dollars a year from now at 7% inflation, retailers will up pricing to compensate for inflation. If I invest in the market now I expect a flat line or further decline at least for this year and my $1000 investment in S&P 500 would also be worth $930 in current dollars due to inflation assuming the market flattens and doesn’t drop further. The only thing I would consider is if the demand for tacomas is going to come down and dealers have to discount… then I might wait. But OP sounds like he wants to buy right now.

 

Well, that's good to hear/read.

And you make good sense when you say, "where you are in life".

My wife can't stand that I spend money on my Sport. We had a little talk about how much we should have at all times to make her feel a little more secure (and that's stretching it because even when we reach that goal, she'll still question my purchasing reasons) and that number was $40K+.

Another agreement was for her to see the money accrue in an account she manages. So, I'm transferring $1K per month so she can add $12K to the existing balance (by the end of the year) which would bring us to roughly $25K.

This doesn't take into account the savings in our other joint account that I manage. I think she needs to see the balance to feel secure in having a year's worth of cash if one of us lost our job. Granted, I'm retired military so I get a retirement + disability check as additional income on top of my civilian job.

Our adult daughters are both married and they are always at our home...whether on weekends or living with us. We both have our own vehicles with the only change being I upgraded from an SUV to my first truck.

So, it's good to have money in the bank...although some people have spoken to me about the end of the world and they are keeping hard cash in their homes...to include precious metals and coins. (Veered off a little...sorry about that)

It boils down to what we are comfortable with in managing our money. Wife and I celebrate 32 years of marriage this month and money is a HUGE topic of discussion we've had differences in how we spend. I think her upbringing has affected the way she thinks as an adult because her parents were always struggling with money to feed 8 kids...wife is youngest.

You're passionate about paying vehicles off with how you expressed it in your last sentence.

I'm just glad you explained that you weren't going to argue everyone's decision but you still managed to get your point across.

 

I paid cash. I’ve got plenty invested. For those saying put it in a s&p index, I hope yours is performing better than mine.

 

Are you saying I can’t take the 16+% YOY gainz to the bank every year without fail?! Whack .

 

lol with you there bro. Even dead cash is better than this market. Which I also have along with securities and bonds waiting on a stock market recovery - likely in a few years at least the way it looks now.

 

Imma just post again

time in the market>>>>>>timing the market.

This is certainly a “set it and forget it” moment, makes my life easier as I don’t look at my investments near as much when they’re bombing!

 

I was just at the bank and I was asking them if I should hammer the ECGS bushing removal tool in or grind it down til it fits.

 

All these great explanations but dont see anyone factoring in that you still have to make payments during the loan.

Say you invest that whole 40k in stocks, funds, whatever…The math formula is a bit more complex. So if a 5% yield account generates 2k extra after a full year, you still have to make those 8k in car payments plus interest of 750..so 8750 for year one. 2,000-850=1250 net.

So you are spending 48k to make 1.2k profit at end of year 1, assuming thats when you cash out. And this is grossly simplified.

40,000 lump sum fully invested stock market @5% yield
8,000 car payments.
750 interest on payments @2% apr

48,750 total spent in first year….stock + payments

=

1250 bucks profit gained by stocks, but by tying up 48,750 in one year.

..gonna pay all upfront? Invest instead and spend 8750 extra dollars in car payments for a 1250 profit.

 

Good thoughts on both sides of this question. I'm also wondering if walking in with the cash to pay but then saying you are open to financing if the interest rate is low enough and perhaps if there's some other consideration might get you a better deal. Someone who doesn't have or doesn't say that they have the cash to pay might not get that $500 finance bonus or 1.9% instead of 3.9% for example.

I should be picking up my Taco in about 3 weeks and I have the money set aside to pay cash but have been considering financing, or at least dangling that carrot out in front of them.

Also, I think I had read that those with great credit scores could get 1.9% on a Tacoma now, is that true? I've also read 2.49% is the lowest they will go. Maybe it differs from dealership to dealership.

 

There is no penalty to pay off balance early, so you could finance for the low ticket and pay off the next day. I got the 1.9% will be paid off early.

 

Dealers get a kickback from Toyota if you sign up for financing through Toyota Financing or some such, if you’ve got the patience to game some extra money, you should absolutely tell them you’d be willing to finance for a discount (YMMV). Then pay it off immediately as there’s no penalty- even though they probably will say there is cause I think they only get paid if you’re on it for like 3 months or something.

 

this month? No…over the last 20 years I’ve been invested?

 

Kinda pissed it only allows me to like this post once

 

This is assuming you have $40K to begin with...yes?

I got as far as monthly $600 payments X 12 months = $7200 with roughly $576 of that as interest--paying considerable principle off.

After that, I got lost in the shuffle...lol

I recently spoke to a Schwab Financial Rep who sent me info learning how to pick funds: ETFs vs Mutual Funds.

Once I get spun up on that, I'll be able to tap a robust resource of information to make my money grow!

 

if you’re only yielding %5 a year during this 15 year bull market run we have been on, I feel sorry for you. You could throw darts at a board and make 10-15% during this run. Your analysis is flawed.

 

Why do these threads exist? This seems like a perfect candidate for off topic rant bullshit instead of 3rd gen stuff.

 

What I've learned since first joining a forum is this...reading from other's experiences is essential. This of course depends on validity of individual posting, hence tenure is also essential.

Gixxer.com - 2011
GSResources - 2012

Although, everyone is entitled to their own opinion about the learning curve.

 

as Opposed to the will this tire size fit without rubbing or where to get raptor light threads that pop up daily? I’m sorry that these talking points aren’t up to your satisfaction!

 

Really?? Nothing to add except your opinion on where the thread should be?? It’s here because I am buying a 3rd gen. I think that qualifies. Or if not the mods can always move it.