Financial Question... Need Some Help Please

Everyone loves resale book value on the Tacoma. We are lucky in that respect. Buying used privately though is a slippery slope. Most who mod here remove their mods & put it back to stock to capitalize the most. No financial institution is going to loan more than book value. I vote buy stock & mod yourself or find one priced realistically within kbb, Nada, or BB pricing or add your own cash.

 

Alright, the basics.... there are really two types of loans. Secured and Unsecured.

With Secured loans you have to provide some collateral to the lender (e.g. the truck, the house, the boat, etc). For this reason the lender will limit the amount they lend you based on how much collateral you provide. So for a used vehicle that is usually the KBB (Kelly Blue Book). It is not unheard of to use multiple items for collateral, say two vehicles. Or, as some have suggested your home (if you own it at least have a mortgage on it and have some equity in it).

Now, unsecured loans. No collateral. The lender bases the loan on your credit worthiness, income, and other factors. Basically how capable and likely you are to pay back the money. And this type of a loan usually has much higher interest rates associated with it since the lender is taking a bigger risk (since they hold no collateral for repayment).

I've done unsecured loans for my business and had as high as an 18% rate, and also for vacations I've taken. Whenever I can I use what I own as collateral. You can even use your retirement savings. Remember you don't have to actually pull your money out of retirement - just sign documents that turn those savings over to the lender if you don't pay your debt.

OK, now my opinion on modded vehicles. Those sellers have an overinflated view of the value of their vehicles based ion the tins of money they've sunk into them. They want to get their money back out of the vehicle. A dealer might actually pay them less for a modded vehicle which is why they are probably on the private market to begin with. You should be able to make really lowball offers and just walk away. There are lots of modded vehicles and a much smaller pool of folks that want them (compared to a good used stock vehicle). Modded to me probably means the=y may have "abused" or at least heavily used their vehicle. True or not it deflates the resale value. Don't give in to sellers trying to recoup their investment in their vehicles - they should have known they'd never get that money back.

Hope this helps.

 

Exactly.

 

There's a huge difference between FACTORY installed upgrades ... versus JOE BLOW upgrades especially when installed on new vehicle.

Factory/Dealer parts, factory/dealer installation, with factory/dealer warranty. It's all in one package. New vehicle is just that....NEW and untouched (so to speak).

Joe Blow buys whatever parts he wants, has them installed where-ever, and they're not covered under warranty (as a whole). Vehicle is used. Parts aren't necessarily the best and/or the installations aren't proven either. As far as the bank knows.....those upgrades could fall apart tomorrow and cause a serious accident. Banks don't care about home grown upgrades. As far as they're concerned, they're a liability and they won't cover them.

Sure ...upgrades only add value to those willing to pay for it. And even so....anyone who is willing to pay for it, needs to research the cost of having those same upgrades installed NEW and with 'trusted' installation on a stock vehicle. There's a certain 'trust' factor involved when buying a modified vehicle. Trust that it won't break down next week. LOL

 

What are credit unions limits on unsecured loans? I know banks don't give too much for them.

 

Personally I feel if you've got nothing to put down at all, you shouldn't even be thinking about buying the vehicle. 100 percent of the time you wind up upside down potentially for years in a situation like that. I've had probably a dozen heavily modded trucks over the years and a few heavily modded cars. And you know what? It absolutely doesn't add value to the vehicle. In fact it usually makes it VERY difficult to sell. Just about every modded truck I've sold outright or traded I've got far less for than a stock example would have brought. But I do it because I like it that way, not because it adds value. It narrows the field of prospective buyers greatly. Also something that's been touched on but not really said is some insurance companies won't even cover a vehicle with an altered ride height. And most won't cover the cost of any modifications in a total loss. Being older with a family and less disposable income both my Tacoma and my Mustang are relatively stock. But over the last 5 years I've had some really cool old stuff (an FJ40 and a few Fox bodies) that were pretty sick. And covered in full by collector car insurance. That's the way to do it, with something that's purely a toy where you can cover it properly for cheap. Never again would I have a super-modded rig for a daily driver 100 miles a day. Been there, done that. But cruising around town on a sunny day and hitting a few local trails... That's when it's nice.

 

A Corvette Z06 is not a modded Vette. It is a stand alone model. Big differance.

 

Good post.

 

Purchasing aside, insurance companies can cover mods if you purchase extra accessory insurance. If you don't let them know about the mods and cover them with additional coverage ahead of time, they will not be covered in a loss. I've debated covering my supercharger as an additional accessory on my truck since it is so expensive.

 

I got to ask, how much are the monthly payments?

I save up the $ and buy used. Haven't had a car payment in 20+ years.

 

I've seen junk mail from my bank offering a $10k line of credit, but that's because I have more than $10k in deposits with them.

Some real numbers would be helpful here. What is the book value of the truck you are looking at, what mods does it have, and how much is the owner asking for it?

Another thing: be sure to purchase insurance coverage for the mods as well. My last insurance company offered coverage at ~1.2%, e.g. extra $120 per year in premium for $10k worth of of accessories and upgrades.

None of this is good financial discipline but if you have stable income, it's doable.

 

You would be incorrect.
A Lingenfelter Vette is a modded Corvette.
A Cosworth Vette is a modded Corvette.
A Callaway Vette is a modded Corvette.

Yes you can mod a regular Corvette coupe. Or mod a Z06. Or mod a ZR1.

But a factory Z06 is not a modded corvette. It IS a stand alone factory model.

 

Find a guy selling his truck for less than blue book. I bought my 03 Sierra 4x4 2500hd for $6,000 because it had a blown head gasket. It books for 10k so i Could have gotten a 10k loan to cover mods if it had any or to cover repairs but i did the head gasket myself and i have a 10k truck for 6k. If you could get a truck that's has little damage or with bad motor or something the loan at book value will pay for truck, mods, and repairs.

 

I was hoping someone would have said this, and was not disappointed. OP, with all due respect, if you care about your finances, just save up for the truck. I drove a shitty hatchback for nine years to save up for my 2013 Taco Sport. Of course, situations vary so I have no business commenting on your life, but if possible, paying cash is always the way to go.

 

Bet you a good lunch your insurance adjuster won't care a hoot about them either. It will total out based on the truck, not the mods.

Exception: You've ponied up, had a professional appraisal, and your insurance has a 'stated value' rider that accommodates the mods.

In the Solo II area I spent a lot of time in, on street driven vehicles, to the potential buyer mods are worth about 50%-75% of the initial parts cost (no labor cost) even if you put them on yesterday. Not to mention that to get that level it has to be exactly the mod the buyer would have done themselves, not something they will eventually change.

 

Everything is worth the amount somebody is willing to pay for it. There are mods which would add value to a used vehicle to me, and others I might feel reduce value. If your financial ducks are in a row and the amount can be paid off in what you feel is a reasonable amount of time - go for it. We all pay to play. You have to decide what is right for you. If the money is tough to get, the deal isn't right for you.

If you don't have the time and/ or ability to build a truck, then you have to buy it. When my DD is (finally) properly modded, I plan to buy a trail rig. I'll probably look at some modded rigs and plan to maintain / fix/ improve whatever I buy.

It's your money. Be responsible with it (of course), but get what you want too.

 

I do it differently. I save up the money for a car/truck and when it's time to buy I finance with low rates and then keep the saved up money in the stock market. "Paying cash is always the way to go" - not true. With rates so low why use my money that makes ~10% per year over time when someone will give me money at <2%. But, yeah, you should have the money first.

 

Good post.

Btw, I got a "stated value" quote some years back on my '71 LT-1 Vette. OMG

 

We still haven't heard specs of the vehicle, or asking price...

 

It's great that some of you are willing to drive around shitboxes for years to save the money to buy the vehicle you want and have the discipline and ability to do so. That's definitely something to be proud of....., but different strokes for different folks. Id rather have the vehicle I want NOW and budget it into my finances. Interest rates are so low it doesn't really cost much to finance a vehicle if your credit isn't total shit.

I do agree that OP needs to put some money down to at least make up the difference in the loan/value. I've never purchased a vehicle without putting equity or cash towards the purchase which keeps me in the blue even in the early years of the loan. I've also never purchased or needed GAP.