Need advice paying cash for new truck

I wouldn't expect 16 percent over the next 12 months. I would guess it's more like 6 percent. Most interest rates are going to be 4 percent, so figure on a 2 percent difference.

Also, most people don't walk in coming from no vehicle at all. They'll have an existing vehicle you can subtract from the 40k. If they're paying cash, let's say their vehicle is worth 15k. So the more real world figures are probably the difference between 4 and 6 percent of $25k. Your figures are best case scenario for money saved. It's probably closer to 6-800 total for most people.

 

One last questions totally different then the original question. Maybe I should start another thread? Why would I pay for the trd offroad full price at 33500 in my area probably near 35k with tax. I could buy a v6 sr for 25 to 26k most and take my extra money and put 10k worth of mods!! I'm going to lift and change tire at bare min on offroad and change exhaust anyways. I could pretty much build a dream truck with 10k. Yes it would not be trd approved but it will actually probably be as good if not way better. I could add snorkel, 33 tires, lift 4 inch, and have money for other things. A camper top and bull bar. Plus a kick arse stero. What are your thoughts.

 

https://www.toyota.com/deals/tacoma/apr/

Showing 0% in Central PA, region specific maybe?

 

I don't think you understand what he's saying, time value of money considers the EARNING potential of your cash, potential that you're throwing away for nothing.

Take $40k and stick it in your 401k and it'll be worth like $55k+ in 5 years (assuming average returns), compound interest is a beautiful thing

Take that $40k on a <3% loan for the same time period and you've paid like <$3k in interest.

$15k earned vs $3k spent is a LOT more than "hundreds of dollars saved max".

 

They should let you put some on credit card. That's what I did. $3,000 so you can get points or cash back from cc. Then pay it with no interest.

 

I understand completely.

He's pointing out best case scenario. I was pointing out a more realistic expectation.

And he and you aren't factoring in the federal tax you'll pay as soon as you cash it.

 

Region specific. 3.9 here. Just checked the website.

 

Your link shows 1.9 for 48 months

 

As some have mentioned, dealers try to make money at every point in the process: trade in, sale price, financing, extended warranty, etc. They may try to make you think you are getting a deal on sale price thinking they will make it up in financing or elsewhere. Of course, if you tell them you are not financing with them there is no chance of that happening.

Ultimately, they had no problem taking a check from us for the entire balance; but, even though I dealt with the internet sales and ordered a truck it still took like three hours to get out of there.

Oddly, when we bought the wife's car (Audi) they said we could save $500 if we financed even though I told them I would pay it off immediately (after confirming there would be no early payoff penalty)... they didn't care.

What a hassle trying to buy a car.

 

Okay, everyone come to central PA for 0.0 @ 36 months on Tacomas excluding TRD Pro!

 

Like I said, depends on your IRR threshold. You are right that returns in the next year or two might not be as high, but also depends on your investment portfolio. It's a risk. Like anything else in life. But pretty safe one and one you can come out way ahead on.

By the way, current rates in my area, through Toyota, is 1.9% at 60 months for a Tacoma. Free money, I say.

Last thing--for the record, if I had a car to trade in, I would just sell it outright, invest it, and leverage the new vehicle 100%. Outcome is basically the same. Not hundreds, but THOUSANDS saved.

 

I honestly don't think you are ready to start any negotiations cash or finance at this point. You don't even know what you want.
Don't worry about how to pay for it until you know what you want, and what you are willing to pay for it.

Paying cash for just anything is just paying cash for it, or you just have bad credit and don't want to deal with high interest.
If your goal is to hopefully save some bucks long term with cash (no interest payments), then know what you are buying before you trying to make a deal.

If you are too lazy to walk to the mailbox to possibly save a few bucks within your investing portfolio, why would you be willing to go to a dealer to negotiate, fake a walk out, and possibly buy/or not buy what they have on the lot when you could save all that energy and sit in your silk skivvies doing everything over email until you are satisfied with the deal.

You are not ready!

 

I am completely satisfied with my TRD OR. However, if I were to do it again, I would get an SR, add a small lift and tires, then call it good. If my ventures dictate something with more off-road prowess, I'd get an ARB locker (f/r). So if I were in your shoes, I would definitely start with the base model and add things as you see fit.

 

2007 to 2009 the losses for the Dow were something like 50 percent.

Saying you'll gain 8k on 40k in 12 months is so misleading.

 

haha, i just gave an example of this in the other thread where toyota wants the guy to lease up a new truck.

 

I never said you're guaranteed any sort of return. I merely said that is what I saw. Also, I did lose in 2008 and 2009, like everyone else. But I didn't panic like most people, and since then, I've regained all that, and then some. Remember, it's not a loss or gain UNTIL you sell.

 

ok but even with taxes....

$15k earned and what 20% capital gains tax?? That net $12k - $3k in interest and you're still $9k up.

I used to sell BMWs in the richest zip code in America (Rancho Santa Fe), not once did I see a wealthy person pay cash for a car, I think for good reason.

From my experience its always working class people that think paying cash for a depreciating asset is a good idea, I'm working class myself so nothing against that but just trying to work my way up and learn from those who've made it ya know

 

very true.

it's hard for folks to think long term when they see it tumble. shit with all of the current tariff talk going on, my portfolio has been all over the place. but i stick with it and i'm still up and keep my eye on the long term goal, not the short term volatility.

 

rich people lease.

 

I get it. It's fun to play with a financial calculator and see how much money you could make.

The reality in the real world, paying cash vs financing and investing safely nets a difference in the hundreds. Not thousands as many on here would like to believe.