Is buying a new 2023 TRD OR in this economy smart?

I currently have a deposit on a 2023 TRD OR which should come in in a few weeks judging by what the dealer told me. I've wanted a Tacoma for probably over 8 years and have always delayed getting one. Once I heard that this was the last year of the V6 I made the decision to get one. I like to keep my vehicles for a long time and would much rather have the last of the old Dinosaur reliable power train than something new. I like working on my vehicles myself. I'm currently in my late 20s and have a secure job that pays me well. But I've always tried to make smart financial decisions and watching the way the economy is going I feel like a big crash in the car market is coming. I had planned to buy this truck in cash. I'm not dipping into savings or anything ridiculous like that. I understand vehicles are liabilities. My problem is, I'm in this internal debate if it's smart to buy a vehicle now or wait but if I wait then I'll never get a new 2023 ever again. My plan is to keep this truck until my kids can drive it, and I don't even have kids yet.

 

If you go underwater on the loan just put an outboard on back. Can't do that with a hybrid.



Also if you can get 3.99% or better from Toyota it makes sense to put your cash in bonds/CDs and take the auto loan since they still give rates under market value. This might make a little bit on interest, but keeps the cash accessible in case something important comes up. Not living on credit is a good safety measure, but credit is a valuable tool if used correctly.

 

No one knows your financial situation better than you, nor does anyone care to know. Any future economic downturns (further) will effect everyone in different ways, and many people will come out the other end of them better than entering....and others will be destroyed.

As for the decision to buy cash vs finance, that really comes down to the investment potential of the money tied up in a depreciating asset. Over the course of a loan (5yrs) how much interest will you be paying? Probably more than your cash will earn you in the short term, so cash seems like the most economically sound decision....but what about long term investing strategies. What will the returns realized in the near term become in the long term? 5% earned over the next 5 years grows a heck of a lot more over 25 years, so that may the better choice. Comfort in knowing you don't owe anything also has value....

Lots of things to factor in when spending money. Make an informed choice within your means, that's the biggest thing.

 

I wouldn’t panic, there will always be low mileage used trucks out there to buy, unless you need that new truck smell.

 

Hard to get that answer, yes or no, without a crystal ball!

If you're buying it with cash outright (huge props btw), I don't think there's anything to worry about (assuming you have ample cash leftover). Especially if your plan is to keep it for the long haul.

My only reason for you to not buy the truck would be if you don't already own a home. It would probably be a better financial decision to use that cash to purchase a house (appreciating asset) instead of a vehicle (depreciating asset).

Don't let the Fear Of Missing Out make you spend money you don't want to.

Good luck with your decision!

 

Do the math, if you can put down 1/4-1/5 of the vehicle cost and make payments over three years without crashing your budget then you should probably get it.

Assuming you have good credit I would also probably try to finance with a credit union and not through the dealer. Most credit unions will just require you to keep them minimum balance in their institution to be considered a customer.

Don’t let the dealerships screw you into a high interest loan over 5 to 6 years. That means you can’t afford the truck and will just be paying interest.

Interest rates are nowhere near where you want to be getting loans more than three years, unless you put a shit ton of money down.

 

Sounds like a Dave Ramsey talking point that should always be taken with a grain of salt. Taking out a loan that you can safely pay back builds credit. Building credit is good and helps you in the long run (future mortgage, loans, interest rates, etc.)

Obliviously this doesn't mean you should take a 12% APR loan on $30,000. But say you put down a large down payment, and take a 5% APR on $10,000 you would only pay ~$1000 in interest over 48 months and build great credit. I have no idea what your financial situation is but my point is to not immediately think all loans are bad. You say your in late 20's with a good paying job, this is a great time to safely bump up your credit score for the future.

 

another part of what would be assessing; what condition is my current vehicle? Does it need replaced?

 

If you can afford it along with the gas, insurance and registration then sure.

 

My 2007 Corolla worked fine (the loose accessory belt that prompted the change was probably just an inexpensive-fix tensioner after 250k) but I moved to AZ for off-road. Else my Corolla would still be in the garage.

If you have either a "dying vehicle" or other "needs have changed" reason, a simple-cursory read of the information you gave us indicates you have the money.

 

My answer is yes. If you base all decisions on the economy you could drive yourself crazy. You've convinced me that you can afford and want it. Hard work deserves it's share of rewards.

 

Maybe consider getting the 2023 now. Even though you generally keep your vehicles a long time you could be enticed to trade in sooner once the 4th Gens are out for a couple of years. When I was in my 20s, I usually got a new vehicle every 2 years because I wanted a new vehicle and could afford it. BTW, I am keeping my V6 until Toyota entices me with something new. I can afford something new, just waiting to see if that “Wanting Something New” feeling appears.

 

No, but if you want it you have to buy it.

 

No, buying a new vehicle isn’t a good financial decision in any economy. Unless you’re a business owner who can depreciate it for tax purposes.

 

Good advice, thank you. I do like the peace of mind that I owe nothing to no one. But see the side of locking up that much cash also isn't great.

 

I don’t know where the bullshit advice originated on the Internet that buying a vehicle with cash is a smart thing to do.

 

Don't pay a cent over MSRP. Some dealers seem to still be marking them up, I went to a large volume dealer that was pricing them at sticker so I waited for the exact one I wanted, which took a few weeks. I was not planning on getting a new truck yet, but I knew I wanted the old faithful dinosaur tech of the Gen 3, so I jumped in early.

 

I current drive a 2013 Corolla, and I've maintained it meticulously. I bet I could get another 100k out of it if I wanted to. Not even sure if I want to sell it either. It's like a child to me as dumb as that sounds..

 

I was always aiming to save for a home, but up here in the east coast it's near impossible. I would aim for a home maybe 3-4 years from now

 

That's true, I was thinking of maybe doing that. Take a loan on 10-15k just for that reason.