College student thinking about buying a 2013 Tacoma, leery on dishing out the cash

Hey guys, I found the perfect Tacoma that I want. It's a 2013 TRD Sport Access Cab 4x4 in Barcelona Red with 28k miles

I can pay cash for the vehicle and still have my finances in order to complete school and live without being paycheck to paycheck

I am a senior mechanical engineering student and I have a job lined up post graduation. I've never spent this kind of money before so I am a little uneasy about dropping 23k plus tax and title.

I'm considering just buying a 1st Gen with 120k miles for $11k and feeling a little more secure about my situation, but it's ultimately not the Tacoma I want.

My real question is, if I drop 25k after everything, is there a good chance I can still sell this bad boy in say a year or so for close to what I paid if something would go bad and my job doesn't pan out?

I don't have a car at the moment and I figured it would be a better financial decision to buy something I actually want and will keep if everything goes right, rather than paying $5-10k for a car or truck that I plan to sell for a Tacoma once I graduate.

Just wondering what you guys think, I saved for a while to get this taco and many people have told me different things. Some have told me to invest my money in a Roth IRA, other say to treat myself and others say that Tacoma's hold their value so well that if shit hits the fan the most I'd lose on it is $5k.

What kind of advice would you guys give a 22 year old in this situation?

Also, if the answer is to buy it, would you finance it to build up your credit (5.07 interest rate) or just dish out the 24,900

 

Why not pay half in cash and finance the other half to boost your credit? A payment on 12.5 k will be about 230 bucks a month

 

That might make more sense, I'll have to talk to the dealer and see if I can get a better finance rate that way.

 

Do you have any other expenses (student loans, cc debt, etc.)?

 

If that's the vehicle you want and the price is right, buy it. Consider doing it this way: Big down payment...say 50% down & finance the rest at the good rate you quoted for 24 months or less. Don't spend the remainder. That way you know you can pay it off at any time plus you build up your credit rating and the interest cost for 24 months is minimal.

 

Your interest rate will more than likely depend on the term of the loan. I'd talk to your local credit union. I know my credit union (Hfcu) has way better rates on used cars than any dealer in my area.

 

At this time I do not, I still live at home and im fortunate enough to only have to pay for my car insurance,phone bill,gas etc. unless you consider having a girlfriend, that's about the only "bills" I currently

 

Sounds like a good plan

 

Girlfriend is the most expensive bill of all!!!!

 

I will second this ^

My dealer wanted me to finance through them because of their "fantastic" interest rates. My CU beat them by a whole percent I believe. Easy decision.

 

You are exactly right my friend

 

I'm currently hunting down a Range Rover evoque for my fiancé, credit union beat the dealer by 2.5% easily.

 

Buy the vehicle you want. You'll be driving it long after you forget about the terms of your payments.
At the age of 22, you have a long while to invest in 401k and/or an IRA (I'd recommend both).
All that said, if you're 22 years old and have saved up $25K in cash, I'll make the assumption that you'll do alright in life, financially speaking.

 

That's good to hear, I may try to shop my bank then and give that shot. I know my job has a good credit union, so maybe if all else fails they can refinance the truck and get me a better rate

 

This is my thought. I’d throw 11,000 down payment and finance the rest. Financing 13,900 would be around 210-215.00 a month payment. Done!

 

Those were my thoughts as well (as far as the 401k and IRA)

Thanks for the help man. I think I should be alright

 

This ^^

With no other debt and you at home, I would put down around half and finance the rest on your bank's loan, not the dealer. Also, you should get the price down that way as well. Be ready to walk.

However, I would buy the truck if indeed it is the "perfect truck" for you. Build you credit as mentioned before and get into your 401k the day you are eligible.

I likely sound like you Dad now Good luck!

 

^^^ This, right here. I don't know your financial situation, but I've always been told that "car loan" credit is one of the more difficult types of credits to get when starting out. This would be an EASY way to get it and start building it!

Sincerely,
A recent college grad

 

I'm 23 now bought a new Tacoma last year, sorta different situation already have a solid job and everything. I would definitely finance at least some to build credit it helps quite a bit. I would shop around for rates though, I had 1.99% I realize new vs used rates will be different, but that seems kinda high.

I just saw no reason to put all of the money in one place when I can help myself by building credit and having plenty of just in case money.

 

You are smart to spend wisely since you don’t have a job yet. But, think positive, good engineers are always in demand, work hard and you will always have good prospects. If you have the cash for the vehicle + ins + a small slush fund for tires/brakes/repairs, you are in better shape than many college students. Resist the urge to start spending $ modifying it until you own it 100% and have steady employment! A ROTH IRA and paying any student debt is always a good idea - you’ll thank yourself in 30 years.

I think you’d be better served to buy the newer truck as well, despite the additional cost. Finance half, you can always pay it off early, and it will help build your credit. In that same sense, get a credit card and be responsible with it - that will help you build credit as well for the bigger expenses down the road - house, etc.