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Pay down current car and trade in or use cash as down payment?

Discussion in '3rd Gen. Tacomas (2016+)' started by jmichael99, Nov 7, 2018.

  1. Nov 7, 2018 at 1:42 PM
    #1
    jmichael99

    jmichael99 [OP] Well-Known Member

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    im saving money for a off-road and I have a 2012 Camry to trade. I owe 8 they will low ball me to around 5-6 I’m sure. Should I pay the car down, this way I don’t spend the money lol. Or save it as a down payment? I have 3k saved. I’m wanting to put around 6-8k down
     
    Sum1 Else likes this.
  2. Nov 7, 2018 at 1:47 PM
    #2
    Sub_Par

    Sub_Par Well-Known Member

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    I’m trying to understand the math here, you are currently upside down 2-3k on a trade in, and you have 3k in savings. You would like to put 6-8k down. So essentially you have 0-1k to put down at this point, so you need to save another 6-7k before you’re where you want to be. Isn’t this a little premature to ask this question? When will you have the rest of the money for a down payment?
     
  3. Nov 7, 2018 at 2:06 PM
    #3
    siznarf

    siznarf Everyone my age is older than me...

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    I've never traded in ANY car I've owned. FACT - Dealerships will low ball you ... 5-6k is optimistic, expect 4k-ish.

    Private sell that Camry and pay off loan. If you sell for more than what you owe, great. If not, its ok because it will always be better than what the dealership will offer.

    It will take some time to sell so list right now so you can be ready by the time black friday comes along ... might be some good deals then.
     
  4. Nov 7, 2018 at 2:09 PM
    #4
    MidCitiesMildMan

    MidCitiesMildMan Well-Known Member

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    In most, maybe all, states there is a tax advantage to trading, compared to selling outright. Now understand that sometimes the benefit of selling outright will outweigh the tax benefit, so do your homework. But not everyone wants to sell their car private party. It isn't without minor risk.

    To make it simple, lets say your tax rate is 6% on cars, the truck you are buying is $40k, and your trade is worth $20k.

    Taxes on $40k will be $2,400.

    If you trade, you pay taxes on the difference (40k-20k trade = $20k), so your taxes will be $1,200.

    I don't know what your car is worth, but if I were in your position, I'd sell it private party.
     
    jsi, Boerseun, Skydvrr and 3 others like this.
  5. Nov 7, 2018 at 2:22 PM
    #5
    jmichael99

    jmichael99 [OP] Well-Known Member

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    I have considered private sale. The only issue it’s my only car. So if I sel it and can’t find a truck for a few days/weeks I’m kind of screwed. My in-laws said I could take their f150 but again if it’s mlre than a few days I doubt they would like that
     
    GillyLink likes this.
  6. Nov 7, 2018 at 2:27 PM
    #6
    PackCon

    PackCon Well-Known Member

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    You should only pay cash for cars.

    Keep the Camry. Pay it off. Then save for your Tacoma in full.

    If you can’t afford cash, can’t afford it.
     
  7. Nov 7, 2018 at 2:29 PM
    #7
    hx989

    hx989 Church of @ODNAREM - Pacific Northwest Chapter

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    I know that in California and Washington his doesn't work. Fucking gubernment!

    And also if he has a loan he most likely doesn't have possession of the title so that makes private selling the current car a lot harder
     
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  8. Nov 7, 2018 at 2:40 PM
    #8
    siznarf

    siznarf Everyone my age is older than me...

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    Sold 2 cars without the title in my possession. Payment was done at my credit union which also handled the change of ownership
     
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  9. Nov 7, 2018 at 2:43 PM
    #9
    Lastplace

    Lastplace Well-Known Member

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    A wiseman once said:

    "You should only pay cash for cars.
    Keep the Camry. Pay it off. Then save for your Tacoma in full.
    If you can’t afford cash, can’t afford it."
     
    Tocamo, canopycarl, bucktales and 5 others like this.
  10. Nov 7, 2018 at 2:46 PM
    #10
    MidCitiesMildMan

    MidCitiesMildMan Well-Known Member

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    That made sense when interest rates were high. With nearly free, or sometimes free, loans available, I don't see the incentive.
     
  11. Nov 7, 2018 at 2:58 PM
    #11
    Sharpish

    Sharpish Well-Known Member

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    I agree with this ... it is going to take the average person a long long time to save up $40-$50K cash ... Let's be optimistic and say 5 years ... why not buy the truck 0 down with 0% interest and instead of saving for 5 years (while the value of your savings depreciates and the truck gets more expensive due to inflation) you will have the truck paid off in those 5 years.

    I hate making car payments as much as the next guy but you can have a lot of fun with it in those 5 years.
     
    Tacotj, loginfailed and Ducman4x4 like this.
  12. Nov 7, 2018 at 2:59 PM
    #12
    crepr12

    crepr12 Well-Known Member

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    lmmfao....ok
     
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  13. Nov 7, 2018 at 3:04 PM
    #13
    Texas T

    Texas T Well-Known Member

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    When I sold my jeep I had the buyer meet me at the dealership I was purchasing my truck from. They processed all paperwork and took what I sold the jeep for off of taxes. They had their chance with him in the finance office I guess.
     
  14. Nov 7, 2018 at 3:05 PM
    #14
    MidCitiesMildMan

    MidCitiesMildMan Well-Known Member

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    Nice. I've heard of that happening, but thought the dealer charged a small premium for their time.
     
  15. Nov 7, 2018 at 3:07 PM
    #15
    Texas T

    Texas T Well-Known Member

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    It might have been $500 now that you mention it but I saved much more in taxes
     
  16. Nov 7, 2018 at 3:07 PM
    #16
    crazysccrmd

    crazysccrmd Well-Known Member

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    When did that change in WA? I traded in a car there about ten years ago because the trade in offer plus taxes saved was the same amount I wanted to get for it selling private party. Made the process a lot easier.
     
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  17. Nov 7, 2018 at 3:09 PM
    #17
    PuyallupJon

    PuyallupJon Well-Known Member

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    In Washington State you get a tax break if you trade in the truck/car. You pay taxes on the difference between the two.

    Agreed price on new rig $35K
    Agreed trade in price $28K
    You pay taxes on the $7K

    Here in the Liberal State of Washington our sales tax is about 10% in most counties.
    You sell your ride yourself you are paying taxes on $35K or about $3500
    Trade it in and take a little less and you pay taxes on $7K or about $700
     
    Boerseun likes this.
  18. Nov 7, 2018 at 3:09 PM
    #18
    PuyallupJon

    PuyallupJon Well-Known Member

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    His post is incorrect.
     
  19. Nov 7, 2018 at 3:10 PM
    #19
    ClassicVW

    ClassicVW Active Member

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    Maybe.... be real nice to your in-laws, ask them to loan you what you owe on the Camry and pay off the loan and then it'll be a lot easier to sell. After sale, pay back in-laws and what's left after that, put toward down payment.

    Or, ask them for a down payment, buy truck, then sell Camry and pay off in-laws.

    A reach, I know, but like they say- If you don't ask, you don't get....
     
  20. Nov 7, 2018 at 3:10 PM
    #20
    2ski4life7

    2ski4life7 Well-Known Member

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    Getting the sales tax credit in WA doesn't work?
     

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