How in debt are you with your Tacoma?

I generally don't advocate paying cash for a home for several financial reasons. A few examples are: housing, unlike cars, is an asset. They climb in value. Save for 10 years starting today & a chunk of that savings will be lost in appreciation of comparable properties in 10 years. The amount of appreciation will help to alleviate the amount lost in interest. There are tax shelters for this interest lost.

Those are a few examples of why I won't fault anyone for a mortgage so long as it's done intelligently. You shop for a good house & do your research. You put in just as much research on your mortgage company & mortgage product. You only do a traditional 15yr mortgage on a fixed rate & your mortgage payment doesn't exceed 25% of your monthly take-home. This last number can be stretched slightly but limiting the house you think you need is usually the better financial move.

We're getting into a totally separate topic now as mortgages aren't the same as loans for many reasons. I would still pay it off as quickly as humanly possible though for many of the same reasons I suggest not getting into a car loan at all.

 

Again, the two aren't mutually exclusive. Many $2k cars have great safety ratings. If you allow emotion to make your financial decisions you'll always justify the shinier toy.

 

Buying a $30K truck at 6% for 5 years costs $34,796 at $579.98/month. If all you do is buy a 5-year CD (Goldman has one paying at 2.40% APY as of 11/6/17) that $4,796 will be $5,400 in 5 years. So instead of being $4,796 in the hole on interest you could be $604 richer by paying the $30K outright. There's no way a bank is going to give you a loan that yields them less than they are making on investments. The only reason we justify our mortgage is we're not well off enough to buy a house for cash and real estate generally appreciates. So as long as the cost of the money doesn't exceed appreciation there's no reason not to take a mortgage.

My justification was either writing a check for the whole amount or accepting the 0% loan and letting the cash sit under a mattress, which is just as useful. Putting it in a checking account is comparatively essentially zero risk, zero gain, almost as good as having the cash. So that's why I said $148 better off for doing absolutely nothing. Our household finances aren't that simple, by far. We anticipate being able to use the Subaru for free at 5 years with the investments, but that's no way, no how a zero risk situation. We could also end up still needing to make the car payments or be faced selling at a market price having lost the money in another crash. There are no guarantees in life so 0% interest rate isn't 0% risk unless we physically sit on the cash anyway, which negates the advantage of splitting up payments over 5 years instead of the lump sum.

The vehicle is depreciating at the same rate whether you finance it or not. If you're basing depreciation on the resale value it's more difficult to predict. We usually just use the IRS MACRS rate to figure it out. Since the value for these cars here is high you can't just use a 5-year standard rate because you can't find a reasonably used 5 year old Forester or Tacoma for what the IRS predicts standard property will depreciate. An accountant would tell you if you have $20,000 to buy an off lease 3 year old Tacoma or Forester. Good luck in that search. Using the SL deduction on an asset with a 10-year service life starting at $21,000 should have a book value of $15,703 at 3 years, but we found that's not realistic in the market. Perhaps for a Chevy or Ford, but not a Toyota or Subaru. Then again the useful service life is going to be longer than 10 years for them, too. That's another variable. We kept our previous truck 16 years (it was 25 years old), the previous car is 15 years old (in our ownership 11 years), which replaced a 7 year old (bought it at 3 years old) that was totaled in a wreck. We get every penny of depreciation and use from vehicles.

We wouldn't have taken a loan at any other rate.

 

Many $2k cars break down constantly, are damaged and structurally unsound. Many $2k cars need constant upkeep where your just dumping more and more money into. I could go on and on...

I'm guessing you dont have kids huh? Well if/when you do, tell me how much "emotion" comes into play when making judgements that directly affect their lives.

 

My 2014 is paid off. I financed it for 3 years, so I had it paid off at 27k miles. I put about $8k(cash) in it when I got it with lift, tires/wheels, gears/locked, and on and on and on.

 

Even though there are some really good points being made in here, I have to agree with @Ostrichsak on a lot of what he is saying. We all have our reasons as to why we buy the shit we do, but in the end, most of those reasons boil down to “wants” and not “needs.” It’s that grey area between want and need that sets all of us apart. It is also mind-blowing to see what one can do with their money in the form of investments and savings if they just stick to a plan and follow through with it.

 

Wow. Stupidest comment I've ever seen on here.

 

How is that stupid? It a wise financial decision not to waste money on useless items.

 

Spends 15-30k on a Tacoma to keep his daughter safe, defends her at home with a stick

 

All speculation and conjecture. There may be a point where you can statistically find cost/upkeep hits a minimum and I would agree that it's probably higher than $2,000 but that doesn't justify a brand new car as financially sound. If I had to guess the point were you achieve the best value is probably more like $10K to $15K. Let someone else eat the first 2 to 5 years of depreciation while you reap the next 5 to 7 years of useful life. I used to buy $1000 cars when I was younger (but then again $1K actually bought you something in the 1980s) and I treated them as almost disposable. You can buy 15 $2K cars and if they all only last one year you're conceptually no worse off in than if you bought a $30K car and kept it for 15 years.

 

My tacoma was no where near that, and I dont have anyone coming to take over my home. Sounds like the fear pushing media has gotten to you.

 

11,500 out the door (minus the $2k I got for my old car)

 

I shouldn't have to explain this, I'll let you figure it out.

 

You paid $11,500 for a new Tacoma?

 

Rusted frame?

 

I'm not that dumb, sorry

 

Good answer...

 

nope, frame is solid

 

2010 w/ 85K

 

How many miles?