How much is your truck payment?

[BA73]

My Tremor build was $70K. Xplan brings it down to $65k. Traded in a 2018 Jeep Wrangler JKUR Recon. I paid $44k (off the lot) for the Jeep in 2018, and got $46K for trade in June...that's a free car for 3.5 years.

I am still financing the remaining $19K and have secured my financing through a local CU, 0.9% for 5 years. The entire loan (should I actually pay for 60 mos) will cost me $450.

Not to start a Dave Ramsey bash sesh (keep in mind he filed bankruptcy and couldn't get a loan if he wanted to), or a finance 201 lecture, but "cash is king" sure AF didn't create the investments that made the 1% the 1%. Putting your money to work for you does. Its been said previously in this thread, a $60k loan over 6 years will cost you ~$3k at these current (great) rates, but a A $60K investment can make you triple that in the same timeframe, covering not only the interest of your payments but also 35%+ of your principal. Don't be afraid to finance if you are utilizing your capital to grow your wealth (even if its just contributing more to your 401K!). 10 years from now we will look back on 3% rates and think "shit, that was free money"...

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[Merccat]

Not to start a Dave Ramsey bash sesh (keep in mind he filed bankruptcy and couldn't get a loan if he wanted to), or a finance 201 lecture, but "cash is king" sure AF didn't create the investments that made the 1% the 1%. Putting your money to work for you does. Its been said previously in this thread, a $50k loan over 6 years will cost you ~$3k at these current (great) rates, but a A $50K investment can make you triple that in the same timeframe, covering not only the interest of your payments but also 25%+ of your principal. Don't be afraid to finance if you are utilizing your capital to grow your wealth (even if its just contributing to your 401K!). 10 years from now we will look back on 3% rates and think "shit, that was free money"...

I think his advise is generally good, especially for the buried in debt masses who have scary high DTI’s. One thing to remember is that most people are not rational investors. It is super hard for people to stick to an investment plan through the downturns and dollar cost averaging is such an important piece of long term investing such as for retirement.

As an example I remember back during the dot com crash (or maybe the one after that) talking to a guy about how I was doubling my contributions during the downturn. I felt sick when I heard he cashed out because I knew that was unrealized losses turned into real losses… may as well have set a big pile of cash on fire. Anyway, once the recovery kicked in my balance ended up tripled from before the crash.

All that being said if you are someone who understands compounding interest, opportunity cost, investing and money management I do agree that much he discusses isn’t necessary applicable to that person.

 

[BA73]

I think his advise is generally good, especially for the buried in debt masses who have scary high DTI’s. One thing to remember is that most people are not rational investors. It is super hard for people to stick to an investment plan through the downturns and dollar cost averaging is such an important piece of long term investing such as for retirement.

As an example I remember back during the dot com crash (or maybe the one after that) talking to a guy about how I was doubling my contributions during the downturn. I felt sick when I heard he cashed out because I knew that was unrealized losses turned into real losses… may as well have set a big pile of cash on fire. Anyway, once the recovery kicked in my balance ended up tripled from before the crash.

All that being said if you are someone who understands compounding interest, investing and money management I do agree that much he discusses isn’t necessary applicable to that person.

Everyone has their own path.

some good reading material:

https://jalopnik.com/once-again-dave-ramsey-is-wrong-about-financing-a-car-1844328020


https://www.forbes.com/sites/garret...o-suze-orman-and-dave-ramsey/?sh=633d43984067

 

[MikeG]

I am one of 3 partners in a relatively successful business. We pay ourselves once per quarter so the whole "monthly" line of budgeting is not how I live my life. Especially when business is slow I may not pay myself. I usually finance long term for a low payment to have good flexibility and throw $10-20k at the loan when business is doing good. I've always paid off my 6 or 7 year car loans in 2-3 years this way. All that said I am paying $750 per month right now.

 

[KartRacer25]

I also got the latest Corona Off Road Stimulus Package from Uncle Sam.
So some BFG, Fox, and RCI goodies are in order. But my wife doesn't quite seem to grasp the concept.

 

[IconicTremor]

My Tremor build was $70K. Xplan brings it down to $65k. Traded in a 2018 Jeep Wrangler JKUR Recon. I paid $44k (off the lot) for the Jeep in 2018, and got $46K for trade in June...that's a free car for 3.5 years.

I am still financing the remaining $19K and have secured my financing through a local CU, 0.9% for 5 years. The entire loan (should I actually pay for 60 mos) will cost me $450.

Not to start a Dave Ramsey bash sesh (keep in mind he filed bankruptcy and couldn't get a loan if he wanted to), or a finance 201 lecture, but "cash is king" sure AF didn't create the investments that made the 1% the 1%. Putting your money to work for you does. Its been said previously in this thread, a $60k loan over 6 years will cost you ~$3k at these current (great) rates, but a A $60K investment can make you triple that in the same timeframe, covering not only the interest of your payments but also 35%+ of your principal. Don't be afraid to finance if you are utilizing your capital to grow your wealth (even if its just contributing more to your 401K!). 10 years from now we will look back on 3% rates and think "shit, that was free money"...

Honestly this is really insightful. I typically don't join into these threads as everyone's financial situation, philosophy, and risk/tolerance levels are so different. The thread usually just implodes into people bashing other peoples decisions and trying to impose their own opinions. Disclaimer, I came from the Mustang forums where, mostly, the buyer was younger and lot less concerned with the "investment".

I am in a weird financial transition in my life. Early 30s, finally making a respectable salary for my region (recent large promotion in 2019), my wife has now entered into the family property business and we are gaining ownership draws, and due to some recent deaths, we've gained some financial windfalls that have paid off pretty much all school loan and car debts. As I type this we only have our newly acquired mortgage. I am struggling with changing from "paycheck to paycheck" budgeting and concern over monthly payment to thinking in this way about where my money will grow most. Thinking of a 2.5% interest loan as cheap money compared to investment options is foreign to me but I'm to a point where it needs to be considered. I have never had a car payment over $500.

This truck will be my first "splurge" after getting promoted, surviving the first part of this pandemic, and finishing my masters in my field. I am still trying to swallow a 700/month payment putting about 20k cash down. I have no trade in since I've been working from home, I sold my car and my 2012 Tundra and turned them into cash while the market was good.

Anyways, sorry for the novel. I'm just finding some of this intriguing. Some of the knowledge and experience you guys have is really helpful.

 

[JoeBlowFord]

Honestly this is really insightful. I typically don't join into these threads as everyone's financial situation, philosophy, and risk/tolerance levels are so different. The thread usually just implodes into people bashing other peoples decisions and trying to impose their own opinions. Disclaimer, I came from the Mustang forums where, mostly, the buyer was younger and lot less concerned with the "investment".

I am in a weird financial transition in my life. Early 30s, finally making a respectable salary for my region (recent large promotion in 2019), my wife has now entered into the family property business and we are gaining ownership draws, and due to some recent deaths, we've gained some financial windfalls that have paid off pretty much all school loan and car debts. As I type this we only have our newly acquired mortgage. I am struggling with changing from "paycheck to paycheck" budgeting and concern over monthly payment to thinking in this way about where my money will grow most. Thinking of a 2.5% interest loan as cheap money compared to investment options is foreign to me but I'm to a point where it needs to be considered. I have never had a car payment over $500.

This truck will be my first "splurge" after getting promoted, surviving the first part of this pandemic, and finishing my masters in my field. I am still trying to swallow a 700/month payment putting about 20k cash down. I have no trade in since I've been working from home, I sold my car and my 2012 Tundra and turned them into cash while the market was good.

Anyways, sorry for the novel. I'm just finding some of this intriguing. Some of the knowledge and experience you guys have is really helpful.

Here's a very rudimentary look at a comparison with a fully financed $50,000 purchase vs $20k down on that purchase. The details of specs I used are below.

 

[UGADawg96]

While many people argue the rates are low and one can invest on leverage, most people are not actually doing that. For example, if someone has $20k cash to spend on a down payment to have a monthly payment of $500, but decides to put $0 down and have a $1000 payment. They aren't then investing the 20k in the market where returns are taxable. Maybe a few are, but most people are not doing that.

 

[fmdog44]

My 2021 F150 XL 5.0 2WD 6' bed cost me 9K, 21K for my 2018 Titan. I have never financed a vehicle. I lied to my Ford dealer by agreeing to finance the truck for six months to get a lower price then paid it off a few days later. I also agreed to the 5 year, $4,000 protection package and cancelled that immediately also.

 

[Dmusick757]

21 powerboost xl was 47,475 traded in a 2017 lariat so they gave 7000 more than I owed. So I financed around 40 financed as long as I could through ford motor credit. My payment is 481.00 a month

 

[Merccat]

They aren't then investing the 20k in the market where returns are taxable.

Good points here. I agree that most probably don’t and you have to be able to earn enough to not only cover the interest your carrying but do so after paying taxes on the investment gains. Still, with interest rates as low as they are, should be something very manageable.

If I wanted a net positive return after taxes, without building a calculator my guess would be if my loan was 3% I would want my corresponding investment returning about 5.5%

 

[JoeBlowFord]

While many people argue the rates are low and one can invest on leverage, most people are not actually doing that. For example, if someone has $20k cash to spend on a down payment to have a monthly payment of $500, but decides to put $0 down and have a $1000 payment. They aren't then investing the 20k in the market where returns are taxable. Maybe a few are, but most people are not doing that.

Agree 100%!

Another way to look at it (based on the example above), is whether or not the $1,300 in interest savings over 5 years is worth the initial cash outlay of $20,000 to reduce interest and lower the payment.

If I did nothing more than put that $20k in a low yield savings account, I might still think it's worth the $260 a year to have $20k available in case of an emergency. Someone might be able to be unemployed for 4 months or more on that amount without having to worry about bills.

 

[Floatman]

My Lariat is a 2 year lease, nothing down, list is $68K CAD.
Monthly lease payment is $519 taxes etc all in. How can I go wrong?

 

[nsbreeding]

This is what I am struggling with. I’m a huge Dave Ramsey fan as well. And obviously financing a truck is a big no-no. But I really want this truck. I hate to touch money in my brokerage account that is earning 10%+ when I can take out a loan at 1.9%. I will put a significant portion down though.

The way I look at it, (Ramsey fan too), is that in an emergency, if I have the invested cash that I could pull out and pay off the truck at any time (having it earmarked for this), then financing is a good idea, if the interest rate is low and I'm earning a higher percentage with the cash that's invested than the loan interest. I also am driving a truck that is an 06 (Tundra) that I've had for 10 years, my wife's last van we had 8 years, 185k miles, so we try to keep vehicles for a long time. I hope this is the case with my new truck.

 

[jamill]

I went on a long path of being upside down on loans starting in 2012. I bought a 2018 F-150 STX brand new in March of 2018 and was upside down. The MSRP on it was like $43k, but they gave it to me for like $38,500 or something close. My payments were $700 a month.

Fast forward to the end of June and I get a letter from the dealership with an offer of up $42,212 or something. While I did love my '18 STX I decide, screw it, let's see what they can do, since I missed some of the features I used to have. I got online and did a loan application for a truck on there and they called me to set up an appointment to test drive after being approved on the online loan app.

After a little hiccup from what I thought I applied for online and what I wound up test driving, I made a deal. The MSRP on my '21 Lariat was around $58k and they had some rebates that brought it down to $56.5k. My 2018 only had 25,527 miles on it and they gave me $38k for trade in and I owed $34,400. The net from my loan I carried over to this one and my payment was $760. My insurance went down $20/month as well with the new one. I wound up getting GAP because people's driving in my area is very questionable, and that brought me up to $830/month for 84 months.

I've always had good enough credit (~700) to get away with no down payments so I very rarely do them. I try and make deals without down payments and if it like what they bring up, I'll make it and if I don't, I'll see what amount will get me where I want.

With all that said though, I am currently not upside down anymore and have a truck I can actually enjoy for many years now and plan to keep this one it's entire loan duration, unlike a lot of past ones.

I loved my STX, but I sure missed electric seats, seat memory and the "get skinny" button for the mirrors more than I thought I would when I ditched those features on my 2013 GMC Sierra All Terrain Edition.

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