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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 8, 2018 at 7:08 AM
    #81
    Kamille.bidan

    Kamille.bidan Well-Known Member

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    This mentality, and the fed interest policy that enables it, are the primary reasons why cars ,and any other products usually purchased with financing, are so f’ning expensive.

    life is not short. we live longer than most animals on earth. Bad financial decisions permanently impact your life.

    If a 40k car is more than half of ones annual income, then one can’t afford it period.
     
    PackCon and canopycarl like this.
  2. Nov 8, 2018 at 7:30 AM
    #82
    Sharpish

    Sharpish Well-Known Member

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    Describe to me how making a $500 dollar payment is different than saving $500 dollars. Your budget is impacted by $500 either way.

    If it's within your budget, it's affordable.

    I could have bought my truck twice over with cash, but I financed with a super low rate and used the cash as a down payment when I bought a home.
     
    Boerseun likes this.
  3. Nov 8, 2018 at 7:34 AM
    #83
    toyotatacomaTRD

    toyotatacomaTRD Senior Member

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    SmartSelect_20181108-073330_Chrome.jpg
     
  4. Nov 8, 2018 at 7:35 AM
    #84
    Sharpish

    Sharpish Well-Known Member

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    My point is that cash savings can be a lot more useful than a paid off vehicle if you had to choose between them.
     
  5. Nov 8, 2018 at 7:43 AM
    #85
    mike2810

    mike2810 Well-Known Member

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    The difference is the $500 payment is going to a lender. The $500 saved is yours.
     
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  6. Nov 8, 2018 at 7:45 AM
    #86
    canopycarl

    canopycarl Well-Known Member

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    Shit ton of Goldfish crackers in back seats, Spilled juice box residue on back of front seats, and a yellow Vanillaroma air freshener.
    That $500 is NOT the same amount. One you are paying to yourself, one your paying to someone else. If after paying off any remaining dept - and funding your future retirement and investment options - you still want the shiny new truck....... and have enough in savings to buy it, then buy it with a huge smile on your face.
     
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  7. Nov 8, 2018 at 7:47 AM
    #87
    PackCon

    PackCon Well-Known Member

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    Because the $500 is going to pay for the current car you drive rather than invested in retirement savings, going to an energency fund, or going to fund a future vehicle.
    The debt payment technically reduces your income. Saving... doesn’t.

    I’m saving money towards my next vehicle as this one gets older. So once its time to retire Barry White to being a 2nd car/tinker toy I will have the cash available to buy my next primary vehicle.
    When a person is done with their 5 year loan... they are no where. They have a grossly depreciated asset and no funds for a vehicle. You basically have to pay off the vehicle and save for the next one simultaneously.
    When I paid $28k for my 2013 I had a truck and my full income.
    When the next person had their 2013 truck and their full income its 5 years later and whats the truck worth now??
    And Tacomas are probably a slight exception because you can easily run them for 15 years and they maintain value better than any other car in the nation.
    Most cars have depreciated 90% in 5 years.


    Your income is your #1 wealth building tool. Debt payments lower your income available to you.

    So many people don’t save the recommended 15% of pretax income per year in retirement but they can sure as hell find $500 a month to finance a car (for a lot thats close to 15%).
    The difference between the car payment and not... is retiring a millionaire.

    Another answer is risk. You don’t borrow on your car to invest. You don’t borrow on your house to invest.
    You need a roof over your head and a car to drive to work to have money to invest.

    If you are investing the money you use to buy cars because its that lucrative... you are spending too much of your income on cars.
     
    canopycarl likes this.
  8. Nov 8, 2018 at 7:48 AM
    #88
    1911tex

    1911tex Well-Known Member

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    Too much common sense is not in the genes of most male truck owners......
     
  9. Nov 8, 2018 at 7:52 AM
    #89
    PackCon

    PackCon Well-Known Member

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    Yeah well I’d rather have money in the bank AND no debt.

    Why have one when you can have both?
     
    mike2810 and canopycarl like this.
  10. Nov 8, 2018 at 12:36 PM
    #90
    Slashaar

    Slashaar Trail Limo Supreme

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    I listed it high on purpose because I knew I'd be low balled. I really only wanted 700 but it was the end of the year and I wanted it gone so the first person to offer 600, it was gone.
     
  11. Nov 8, 2018 at 12:54 PM
    #91
    ClassicVW

    ClassicVW Active Member

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    No offense intended, but I don't want to live as frugally as you do. I'd rather be warm in the winter, life's too short to walk around miserable in the cold. I've added onto my home 3 times. If I'd done the work myself, I'd either still be doing it or my house would have been condemned by the town. Also, I don't know what 'recycle all my stuff so I don't have to pay for it' means. I'll live a bit more comfortably and take the car payment, thank you.
     
  12. Nov 8, 2018 at 1:04 PM
    #92
    PackCon

    PackCon Well-Known Member

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    I don’t freeze. Its called a sweatshirt lol.

    I personally take items to the recycle. I don’t do curb pick up. Thats what I mean.
     
  13. Nov 8, 2018 at 1:08 PM
    #93
    toyotatacomaTRD

    toyotatacomaTRD Senior Member

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    There's frugal, then tripping over a dime to save a nickel.

    Driving to the waste plant can't be gaining anything in your pocket , if anything, minimal at best. Also, I imagine rodent's love hanging out until you make your trip monthly or how ever often you go.
     
  14. Nov 8, 2018 at 1:20 PM
    #94
    PackCon

    PackCon Well-Known Member

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    Uhhh saves $30 a month. Drop off is right up the road. And I have no clue what you mean about rodents in your recycle bin. What the heck are you throwing in there?
    You should be rinsing out cans and bottles with leftover food/fluids in them.
    If you don’t have rodents from your recycle why should I have them in mine? I take my recycle out about every week here recently. Most pick ups are every other week. Your stuff would be sitting longer than mine...
     
  15. Nov 8, 2018 at 1:23 PM
    #95
    toyotatacomaTRD

    toyotatacomaTRD Senior Member

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    I assumed you meant garbage. There is a place that charges $30 a month to recycle? I assumed it was free everywhere.
     
  16. Nov 8, 2018 at 2:04 PM
    #96
    tallpilot

    tallpilot Well-Known Member

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    A thread on how much you paid for your truck is useful and relevant since it helps keep dealers from using information assemmetry to screw clients.

    A thread like this is pointless. Save as much as possible and spend as little as possible. Avoid debt. Pay interest bearing loans off early to minimize interest expense. Everyone knows these things but most ignore the advice. Fortunately this is a forum for truck enthusiasts not personal finance advice.

    These types of threads are as pointless as one asking if I should mainline or snort herion. Half the replies will suggest drugs are bad and the other half will be completely off topic nonsense.
     
  17. Nov 8, 2018 at 2:55 PM
    #97
    Tocamo

    Tocamo Not to be confused with Camel Toe

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  18. Nov 8, 2018 at 2:58 PM
    #98
    phil_m

    phil_m Member

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    Because you can make money on debt. When I bought my Porsche 964 I could have bought it in cash, but with 1% financing that didn't make since given the average annual return on my investment portfolio over the last 10 years. I left my cash in the market and financed the car; here we are 1 year later and my portfolio has appreciated by 30%. Based on the purchase price of the car and the interest rate I'm up over $13,000 in profit by investing the cash rather than buying the car outright. Obviously the market could tank and I could lose all of the increased asset value so I've hedged my bets, but there is certainly a function for debt. As an added bonus the car has appreciated significantly due to Singer and increased demand!

    With all of that being said, I applaud your fiscal responsibility and your choice to pay off your house. I'm just adding that everyone has a different situation and debt can be a useful tool when used appropriately.
     
  19. Nov 8, 2018 at 3:43 PM
    #99
    PackCon

    PackCon Well-Known Member

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    Actually no, and in some areas its not offered at all. My Dad lives in CO and where hes at its not an option. If you want to recycle you’ve got to do it on your own.
     
  20. Nov 8, 2018 at 4:17 PM
    #100
    toyotatacomaTRD

    toyotatacomaTRD Senior Member

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    That's crazy. Sounds like turning back the clock a few decades. We've had free no sort recycling since the early 90s.
     
    PackCon likes this.

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