Tacoma Sales Up Again

This is the truly disturbing. I think many folks are slowly digging themselves a hole that they will have a hard time getting out of.

 

Even people that pay $500/month for a vehicle are insane

 

Situation dependent completely. My house is paid off, a $450 payment for me is nothing.

 

Used as a tool, financing is good business. Many people in business borrow to meet short-term production/inventory issues and the ROI from the sales makes up for it. Some use it as a temporary bridge for getting through a brief (unexpected loss of vehicle?) period while working a better long term solution later.

Some, though, as you state, use financing as a VERY rickety ladder to looking like a movie star. And they "negative equity" their way up the ladder every 2 years, when they ultimately pay $75k for their $45k minivan.

 

What's even more insane is when people plunk down cash instead of taking advantage of low interest financing.

 

I buy what I can afford and finance what I can't.

 

My employee credit union is offering 5.00% C.D.s. My two recent Tacomas are financed through Toyota Motor Credit at 1.49% and 1.90%. This is easy math / basic finance 101 to use low APR financing when available.

 

Vehicle repos are at a supposed all time high.

 

I'm not sure what that means.

 

If I can afford to buy something, and have enough cash on hand I buy it out right.

If I can't afford to pay in full up front it gets financed.

I don't think that's sound financial advice, nor should I be buying anything I can't afford.

 

Hmmm, I can afford to pay cash for literally everything I've purchased in recent memory (thinking vacation, dining, new cars...) and everything I plan on buying in the foreseeable future (thinking a new house and a new car for my wife...), however, just today I paid cash for something for the first time since the start of COVID, a box of Girl Scout cookies.

By buying on credit I reap the rewards of the various credit cards I have, and for larger purchases (cars and home) I am able to keep my money invested and earning at a higher rate than the interest I'll be paying.

 

You can buy a $600,000 house in full if you wanted to?

 

i agree with you it can be a tool. But I would be willing to bet majority of folks with those payments aren’t doing it in a positive manner.

 

I was reading something the other day and can't even find it now. It was how American consumers are low on cash, overleveraged on credit, and student loans will be due and nobody will be able to pay those among other things.

 

Yes.

 

Wow, I'm poor. I'm just thankful I'm not sleeping in a tent outside an industrial park.

 

Quite honestly, 10 years ago I was in the same boat; my wife's business had failed a couple of years before and saddled us with a ton of debt, and then I discovered my (now former) business partner had taken out five lines of credit in my name and ran up over a quarter of a million in debt. We lost our house, switched to driving 10+ year old beaters, and ended up renting a low-cost apartment on a horse farm where I needed to serve as a caretaker three days per week (while maintaining a full time job). We lived there for nearly nine years while our financial fortunes bottomed out and then gradually started to improve.

Long story short, I truly understand being short on funds and the hardship that entails; my motto was, "Plan for the worst, strive for the best."

 

When I was shopping in 2020 just pre Covid, the rate was 5.49%. In discussions I mentioned that I would put down $20k and I got the standard “why? Invest that and finance all of it” I told the guy “Sure! Just show me where I’m going to get a guaranteed 5.49% return on that 20k today”. He shut up. They get commission on the financing of course. I also walked out of that deal and Covid hit. 4 months later I got 0% and bought.

 

Smart folks buy the end of a generation run if at all possible. Nowadays odds are "new" won't be better.



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