What is your monthly payment? Please read.

How so?

If I can invest and get a 1.8% return, you can be sure I'd leave my money in the investment instead of pulling it out to avoid a 1.3% interest rate.

 

Actually I'd love for you to show me the math in your ROI because I could make more asking for change on the street.

CD's are about 1.4%-1.6% anyway.

1.8% i a bit high to be honest, and you wouldn't pull money from a CD to buy a vehicle anyway since there are early withdraw fees. Hence why cash is cash.

 

Ah yeah that would probably make a difference.

 

Run the numbers yourself if you want to make an argument on that basis.

The CD rates are a baseline for the risk adverse and it's not difficult to achieve higher rates elsewhere if you can stand some risk.

 

I did, like I said I can earn more peddling change on the street. If i was worried about $100 or so a year I wouldn't buy a truck.

 

A penny here, a penny there.

$803 is the interest cost of $30k over 48mo at 1.3% amortization
$2367 is the interest income over 4 years at 1.9%/yr compounded monthly. ($2346 compounded annually)
Apply your own marginal tax rate to arrive at the net difference. If you're only ending up with $400 you need a new tax guy.

Of course that's a baseline and in reality the equation is around whether or not you're pulling 30k out of your overall investments.

 

Can't argue there.

 

Not to mention paying capital gains taxes on the investments that you sell so you can pay cash/pay-off your loan. I'd rather leave my money in the market as long as auto loans stay this cheap.

 

If you like a V6 RAV4 you should try my wifes Ecoboost Escape jks. The newer small SUV's are not only cheap but they hold their value. The demo the Ford dealer had on lot, which had less options then what we bought, was worth more money after incentives on the new one. Crazy.

 

It's really not in perspective. My house is paid off except for $460/mo in dues.
I have no other payments at this time. Paid off the boat when I bought the truck and no more daycare.

For the last 3 years I paid between $1000-1600/mo in daycare. $400 on the boat $460 in dues $200 on the car, etc

 

You have no other debt or monthly obligations so a $650 car payment is nothing for you. We can't judge people until we know the total picture.

 

Correct. I mean I have two kids I raise by myself but they are both in school now. I plan on making $1k month payments to start with.

 

Better to just not judge people. JMHO

Judging loan terms, rate, and other objective things is a different matter. I wouldn't do a 72mo car loan; can't imagine a circumstance where I'd think it was a good idea.

 

I read thru a few pages here. Some great perspective and arguments. Has the OP considered a 2nd gen? I ordered a manual trans last month. 3-6 month wait. After browsing this forum at leagth Im considering finding a good second generation and saving $10000. I don't know if this properly answers your payment question but it might prove to save you a little cash and a few headaches.

 

Boy, I hate to bump this, but I found the perfect pic for this thread.

Balling on the banks money

Buy an affordable truck and pay it off when you get it.. Given I financed my truck for incentives and rebates, but my TDI which i own out right is being bought back February 4th and my truck will be paid off with less than a year of ownership. Oh I'm 25 and graduated college recently so not having to give them greedy basterds 15k a year helps me.

 

Also this isn't a financial forum, but that is what I graduated in. OP I like to keep 5k plus in the savings at all times for rainy day funds. I built this while working in college.

The 5k isn't counting my scottrade investment account.. Okay so the point of why it makes sense to not pay off the truck. Well my interest is 1.9% so use your calculator and you find that let's just say I financed msrp of truck 40k for 60 months which turns out being $41,900 give or take.

Okay so to not pay off the vehicle would be like me guessing that I can have a greater return on investment than 5% over the same time period. Well there's risk involved, but if you're playing with 40k in a stock day trading account 5% is nothing, I've made over 2k in a matter of months with GM stock or you could say north of 25% of my investment, plus dividends.

Anyways I'm off subject, come see me, I'm fresh out college and working on certifications such as health and life insurance as well as series 7 among others. It's interesting stuff.

 

I agree with that theory in most cases, but the problem is that it works until it doesn't. If the market takes a dive tomorrow, layoffs follow. If you get laid off, and your investments took a 40-50% dive because the market took a dump you are screwed. You have to cash out at half of what you had to pay debts and even just survive, absolutely wrecking yourself. Paying off debt instead of investing the same money is like buying insurance, yeah it is a losing game statistically, but you can't destroy yourself doing it.

 

What is MCM? Series 7 wow. Sponsirship?

 

sad that bailout out rolled insurance into finance.

 

Shouldn't judge at all, everyone goes through life the best they can. These threads always get kinda nasty in nature.