To trade in or not

I will be trading my 12 sport on a 16. With tax @ 6% here in Pa, I'd never be able to sell it for enough privately to make up the tax benefit I get by trading it in (I tried). The dealer is applying 25,500 to the new truck as a result of the trade. I would have to sell it privately for 27,680 to break even with the trade. Bank still has the title on the 12 as well.

 

Agree with WBF610, trading my 2012 instead of selling it, here in Indiana you pay 7% sales tax on the amount left over after trade or if I sold it then it would be 7% on the total amount, so Indiana gives you credit on your trade in value, now if I still lived in Va I would try to sell due to the difference in how they apply the sales tax.

 

he's got a point!

 

I traded in my 2011 with about 14,000 miles on a 2016 and got more by trading it in because you get the tax break which you wont get selling it privately. I bought it for just over $35000 and got about $31000 on trade, Ive always been a firm believer that life is too short to do without something that is in your reach.. So you have to make payments for a little longer, if your young enough who cares, there will come a time when you wont have that option.. IMO

 

Like others here, I also rotate my truck every 3-5 years, trying to time out when I can sell it at max value before all the annoying servicing needs done on my current one. My 2012 right now is paid off…but I was paying $200/month. I will sell it now for max value, buy a loaded 2016, and continue paying $200/month for a 3 year term….not bad for a $45,000CAD truck! I like staying on top of the curve. And yes, I can avoid the payments all together if I wanted, its just with the 3 year interest being so low, I have better places for that extra 8-10k.

 

This truck does not have any engine problems. Most of the things wrong with it are cosmetic such as cd does play inside temp gauage is broken driver seat worn front bumper could use some painting and it needs a brake job. Other than that she runs good with 217000 miles on it. When I get my 2016-17 I just hope I get the same reliability

 

14,000 mi? Jeesh. I get attached to my vehicles and like building memories with them etc. I wouldn't like trading every few years. I also know my truck is going to start every morning and get me from a to b. Everytime i get a new vehicle i always hope that it'll be as reliable as the last. I've had good luck with all my vehicles knock on wood

 

I'm a sucker for bells and whistles, when I saw what the 2016s came with, I was sold and with the little extra that I had to pay, it was very attractive. I did a lot of addons to the truck and did really like it but I don't have any trouble transferring my attachment from one truck to the other..

 

You only live once.

 

If your truck was paid off, I'd say go with how the spirit moves you.

But you're in debt on your truck. Best thing you can do financially is pay that off. Well, actually the best thing you can do financially is pay off any credit card debt you happen to be carrying. That's a guaranteed annual return of between 12 and 20+% depending on the card.

I had to borrow money for my first new car. But after that I've always kept it for long enough to pay cash for the next one.

 

I'm not sure what the interest rate is where you are but in Vancouver bc. its so cheap that it really doesn't make a lot of difference. Some car dealers here are even offering 0% financing, I guess its whatever your comfortable with in the end but as you know the Tacomas don't seem to depreciate quickly and if your going to keep it a long time, you don't have to worry about it.

 

Kinda. If we're having an academic discussion about whether you're pulling money out of long term investments to pay cash for the truck vs. letting that money stay invested by taking a 0%APR loan, then yeah, I can see that point.

But many/most folks have a tendency to live month-to-month without saving or investing anything. And the only way out of that position is to reduce your set of monthly payments to the point where there's enough money left after your fixed expenses that you can start saving/investing regularly out of money you take home every month. And that's true no matter what the interest rate is.

 

I just paid mine off. The title is in my hand. There is no way I'll be "upgrading" anytime soon. OP, keep the truck. The new 16 will put you in at least another 15000 in debt, probably more like 20000+. Not worth it when your truck has only 70k in miles.

 

I totally agree, but if you are already making payments, it just means you will be making payments longer but of course you have to be able to make the payments and still be able to live right..??

 

If you have to ask the question, I feel like your decision is already made. It's just a matter of time for when you trade it in. You're already interested in doing it and considering it otherwise you wouldn't be asking. If it was me, I would go talk with them. See what numbers you come up with. If the payment comes out to be around the same or even cheaper, I'd jump all over it. Yes you'll be making more payments now, but you knew that going in. If you're young, stretch the payments for longer and try and save up a few dollars here and there to put towards the principle or any other existing debt.

That's most likely what I'll do. Try and get a new one that I know will last another 10 years, or hopefully. My truck is knocking on 100k miles door at the moment. Yes that's just getting broken in nicely, but I don't see it lasting another 10 years without a good amount of work being done. If I can get the same payment on a new truck with no miles that has a warranty, I'm going to go for that.

 

Sell it private for more, or trade it in if you want. Overall...using that truck as a down payment I bet you could get to a point where your payments on the new truck would be the same amount. Of course you would have a new loan so a longer term, but the truck would have a lot of new tech in it that you would like. It would be a nice upgrade.

Just make sure you get a decent deal on the 16.

 

That is "cost of Ownership" We all participate in that but those with payments have both debt and cost of ownership to deal with. I usually don't finance depreciating assets unless the money is 1.5% or below. The idea or goal when owning a vehicle is to keep the Cost of Ownership as low as possible. There are a few vehicles out there that do that much better than others. Tacoma Is one. As are most Toyota products. I understand a Jeep Wrangler is in there as well. Plus of course the Honda products and even the Cooper. Some vehicles only have a great used COA. Corvettes, Miatas in addition to the above, as well as F150s in that mix.

That all said, the longer one keeps a vehicle the less their COA is. That is why people who drive the same vehicle for 10 years or more have the best COA despite any mechanical issues.

People choose what they will pay and deal with based on personal finances which is different for everyone.

 

Yeah me too. I am a tech addict. When I see new tech I want it and will pay up for it. Technical bits and modern conveniences don't scare me like many who think they will fail and cost a fortune. Yeah the Nav screen tech in the Lexus LS450 is $15,000 to replace. But those cars are mostly leased.

I don't get attached to an inanimate object. I will dump in in a NY second if something much better comes along. The 16 is MUCH much better than the second Generation Tacoma. IMO.

 

I'm considering upgrading my 2012 White TRD Sport DCSB w/ JBL and NAV to a 2016 with the same specs. I'm in Pennsylvania also. A Lot of folks say its best to sell to sell it privately but I just don't see anyone paying me what I can get on trading it in (9000miles), Plus I'd get hit hard on tax if I had to pay on a $39,000 Truck. Still trying to figure what would be the best way to go financially.

 

Depends which State you are in. In AZ you pay tax on the difference with a trade. Sales tax is somewhat high in AZ.
My experience has been I have been money ahead in trading. I tend to keep my vehicles 7-10 years.
I also pay cash for a vehicle unless 0% is offered.