opinion on truck/car situation

[twoodcc]

earlier this year i purchased a 2011 toyota tacoma. without getting into all the details, it's not a cheap truck - MSRP was over $30k.

the truck is nice, but the issue i have is that i signed a 48 month contract bc they had a special with 1.9% interest. long story short, the payments are high every month, and even though i can afford it, i'm thinking it's not in my family's best interest.

the payments are $764 a month for 48 months. that equals $36,685.44. that's a lot of money, and my family consists of myself, my wife, and my 7 month old son. right now. so i've looked around for a used truck, and have found a 2011 suzuki equator (basically a nissan frontier) with only 16,000 miles for under $19k. i have great credit, and even at 5% interest for 60 months, the payments would be $400 a month or less. and it would be a total of 23,924. a savings of over $12,000.

does this sound like a crazy idea? i know you don't know all the details and what's going on with my family and all, but based on what i've said, does this sound like the right thing to do?

feel free to ask questions, i was trying to make you read too much.

thanks in advance

 

[killerrobot]

If you're happy with the other truck, I can't think of any valid reason not to save $12k in total/$400 per month. Seems perfectly reasonable to me, especially in today's economy.

Disclaimer: My eyes gave out about half-way through the post.

 

[twoodcc]

If you're happy with the other truck, I can't think of any valid reason not to save $12k in total/$400 per month. Seems perfectly reasonable to me, especially in today's economy.

Disclaimer: My eyes gave out about half-way through the post.

thank you for the reply. yeah that's what i was thinking. i know i will take a loss on my current truck, but overall i'm saving money.

sorry, i was trying to keep it short.

 

[neiltc13]

I looked at these vehicles and I can only use one word to describe them - commercial. I don't understand why someone would buy one of these for their family instead of a medium sized car like a Ford Focus or a large saloon car like a Hyundai Sonata.

 

[Abyssgh0st]

I looked at these vehicles and I can only use one word to describe them - commercial. I don't understand why someone would buy one of these for their family instead of a medium sized car like a Ford Focus or a large saloon car like a Hyundai Sonata.

@OP: Do you have to have a truck, specifically instead of a car?

 

[Demosthenes X]

If you sell the truck today, will it be worth enough to pay off the rest of the loan? If not, then you have to factor that into the price of the other truck, and it might not wind up being that much cheaper.

 

[steve2112]

If you sell the truck today, will it be worth enough to pay off the rest of the loan? If not, then you have to factor that into the price of the other truck, and it might not wind up being that much cheaper.

That's the big question. New vehicles have their biggest hit in depreciation in the first two years, so you may be upside down on the truck. If you are trading it in, I'm sure the dealer will roll the amount upside down into the new loan, but it will raise your payment.

 

[twoodcc]

@OP: Do you have to have a truck, specifically instead of a car?

basically yes. i was open to a car, but my wife would rather we have a truck, so we don't go through this same thing again in a few years. i'm really a truck guy, and that's probably the best thing for me to get

If you sell the truck today, will it be worth enough to pay off the rest of the loan? If not, then you have to factor that into the price of the other truck, and it might not wind up being that much cheaper.

That's the big question. New vehicles have their biggest hit in depreciation in the first two years, so you may be upside down on the truck. If you are trading it in, I'm sure the dealer will roll the amount upside down into the new loan, but it will raise your payment.

i have calculated this in my estimates already. i do owe more than it's worth, but i will also be putting some money down

 

[Tilpots]

You pay a premium for Toyota's for a reason. Besides initial price, you also have to factor in in maintenance, safety, dependability and longevity considerations. You bought the Toyota for a reason. Don't forget why, especially, if you can truly afford it. Congrats on the kid, too!

 

[senseless]

You'll lose so much money on resale, it'll kill the plan. Pay it off as planned, but keep it for 10 years. If it's nice, you won't mind, and it'll make good financial sense.

 

[twoodcc]

You pay a premium for Toyota's for a reason. Besides initial price, you also have to factor in in maintenance, safety, dependability and longevity considerations. You bought the Toyota for a reason. Don't forget why, especially, if you can truly afford it. Congrats on the kid, too!

You make a good point. The thing is, this Toyota isn't as great as I thought it would be. It's good, but the transmission is lacking.

Thanks! I'm thinking of the kid, which is why I'm asking others opinions on this. Basically we can afford it, but just barely. My wife might end up going back to work, which isn't necessarily a bad thing

You'll lose so much money on resale, it'll kill the plan. Pay it off as planned, but keep it for 10 years. If it's nice, you won't mind, and it'll make good financial sense.

But how am I killing it if I spend less money overall?

 

[Tilpots]

I love the looks of the Tacoma, but I haven't ever driven one. Surprised you find it lacking, but I gotta take your word. My wife drives a 2002 4Runner and my DD is a 1997 Lexus LX450. Both of them are great vehicles that have/will continue to last. That's why we bought them. I actually bought the LX450 three years ago and it had 149,000 miles already on it. I have always been confident in Toyotas and haven't been let down.

The other vehicle you're looking at could be a great machine, too. Honestly, I'm not very familiar with it. Like you're saying, family first. If you need to make a move to provide, obviously that's the right call. We just payed the 4Runner off a couple of weeks ago and I can't tell you how great that's gonna be. I've got a young one myself and a whole mountain of other debt. What I do feel very good about though, is believing the 4Runner could last another 10 years, with very little maintenance or repairs. Great. I just jinxed myself. Aw man. Anyway, good luck!

 

[steve2112]

You make a good point. The thing is, this Toyota isn't as great as I thought it would be. It's good, but the transmission is lacking.

Thanks! I'm thinking of the kid, which is why I'm asking others opinions on this. Basically we can afford it, but just barely. My wife might end up going back to work, which isn't necessarily a bad thing



But how am I killing it if I spend less money overall?

You aren't. Look, if the payment is straining your finances, resale value doesn't matter, and quality of the truck doesn't matter. What matters is relieving the strain. Yeah, you are going to take a hit because you are upside down on the truck, but the relief you get will be well worth it.

A few years ago, I did something similar. I had a car I loved, but deep down I knew I had probably bought a bit too much car. I later got laid off my job, which sent me into a panic. Thankfully, I wasn't unemployed for too long, but my new job had a pay cut and that payment made things too close for comfort. I sold the car and bought and older, cheaper car and rolled my negative equity into the loan but still managed to come out with a lower payment.

Thankfully, I managed to get a better job a bit later, and paid off the car in 2 years instead of 4. Personally, I would go even cheaper on a different truck and lower the payment even more, but that's just me. I hate car payments and most debt.

 

[twoodcc]

I love the looks of the Tacoma, but I haven't ever driven one. Surprised you find it lacking, but I gotta take your word. My wife drives a 2002 4Runner and my DD is a 1997 Lexus LX450. Both of them are great vehicles that have/will continue to last. That's why we bought them. I actually bought the LX450 three years ago and it had 149,000 miles already on it. I have always been confident in Toyotas and haven't been let down.

The other vehicle you're looking at could be a great machine, too. Honestly, I'm not very familiar with it. Like you're saying, family first. If you need to make a move to provide, obviously that's the right call. We just payed the 4Runner off a couple of weeks ago and I can't tell you how great that's gonna be. I've got a young one myself and a whole mountain of other debt. What I do feel very good about though, is believing the 4Runner could last another 10 years, with very little maintenance or repairs. Great. I just jinxed myself. Aw man. Anyway, good luck!

yeah the tacoma is probably the best looking mid size truck. i'm sure the truck will last, but i got the 6-speed manual (i prefer to drive a manual). it has to be the roughest manual transmission i've ever driven.

but i still love toyotas. my wife drives a 2010 4runner (the newer body style) and we really love it. we will keep that for a very long time.

this other vehicle should be just fine. i'm only going to get it if i get the deal i want. we will see. i'm sure your 4runner will last another 10 years. just keep changing the oil and it'll last forever.

You aren't. Look, if the payment is straining your finances, resale value doesn't matter, and quality of the truck doesn't matter. What matters is relieving the strain. Yeah, you are going to take a hit because you are upside down on the truck, but the relief you get will be well worth it.

A few years ago, I did something similar. I had a car I loved, but deep down I knew I had probably bought a bit too much car. I later got laid off my job, which sent me into a panic. Thankfully, I wasn't unemployed for too long, but my new job had a pay cut and that payment made things too close for comfort. I sold the car and bought and older, cheaper car and rolled my negative equity into the loan but still managed to come out with a lower payment.

Thankfully, I managed to get a better job a bit later, and paid off the car in 2 years instead of 4. Personally, I would go even cheaper on a different truck and lower the payment even more, but that's just me. I hate car payments and most debt.

thanks for the reply. yeah our finances are just too close for comfort. we were able to pay off my wife's 4runner earlier this year, and last year we were paying more per month sometimes (even though we didn't have to) to pay it off early. but now we own a house and have a child, and even though i'm getting paid more than last year, my wife's not working anymore.

and i just can't ask my wife to go back to work to pay for my truck.

here's an opportunity to use everyone's favorite star trek quote: "the needs of the many outweigh the needs of the few." i think this applies here.

 

[senseless]

I don't like the plan because you're downgrading to a lower quality vehicle and losing thousands of dollars in transaction costs. I do like the idea of buying something brand new, that you really like, and keeping it well maintained for 10 years or 120,000 miles. This is assuming the payments are not a burden, of course.

 

[twoodcc]

I don't like the plan because you're downgrading to a lower quality vehicle and losing thousands of dollars in transaction costs. I do like the idea of buying something brand new, that you really like, and keeping it well maintained for 10 years or 120,000 miles. This is assuming the payments are not a burden, of course.

i don't see how i would lose thousands of dollars in transaction costs. if that's the case, then i won't do it. can you explain what you mean?

i like the idea of buying something new and keeping it 10 years also. that was the plan here, but i guess life happens and sometimes things don't work out like you thought they would.

 

[steve2112]

i don't see how i would lose thousands of dollars in transaction costs. if that's the case, then i won't do it. can you explain what you mean?

i like the idea of buying something new and keeping it 10 years also. that was the plan here, but i guess life happens and sometimes things don't work out like you thought they would.

The only transaction costs I can really see would be taxes/registration on the new truck (sales tax, especially) and, of course, the amount you end up being upside down on the old truck.

 

[senseless]

What is the Toyota worth? If you have to put money down to get out of it, apply this to the Suzuki monthly payments for a more accurate comparison. Also consider that you're going from 17 to 15 mpg and 1.9 pct to 5 pct interest. The Suzuki has more miles and will need tires and brakes sooner? How long remains on both warranties?

 

[jsolares]

i don't see how i would lose thousands of dollars in transaction costs. if that's the case, then i won't do it. can you explain what you mean?

i like the idea of buying something new and keeping it 10 years also. that was the plan here, but i guess life happens and sometimes things don't work out like you thought they would.

well you say the truck would've cost you 36000 on an MRSP of 30000, that was the MRSP, it's no longer new, say you get 25000~28000 if that covers the balance of your credit (hopefully you only pay capital if you want to close it, not sure how it works in the US), you'll lose whatever you've paid already.

the sooner you do it, the less you'll end up loosing.

have you considered other pickups? granted i'm not a truck person. and too bad you guys don't get the BT50 or the Amarok last i checked.

 

[singlestick]

earlier this year i purchased a 2011 toyota tacoma. without getting into all the details, it's not a cheap truck - MSRP was over $30k.

the truck is nice, but the issue i have is that i signed a 48 month contract bc they had a special with 1.9% interest. long story short, the payments are high every month, and even though i can afford it, i'm thinking it's not in my family's best interest.

the payments are $764 a month for 48 months. that equals $36,685.44. that's a lot of money, and my family consists of myself, my wife, and my 7 month old son. right now. so i've looked around for a used truck, and have found a 2011 suzuki equator (basically a nissan frontier) with only 16,000 miles for under $19k. i have great credit, and even at 5% interest for 60 months, the payments would be $400 a month or less. and it would be a total of 23,924. a savings of over $12,000.

does this sound like a crazy idea? i know you don't know all the details and what's going on with my family and all, but based on what i've said, does this sound like the right thing to do?

feel free to ask questions, i was trying to make you read too much.

thanks in advance

If you've done the math right, it seems like a no brainier to go for the cheaper deal. You could even put the dollar savings into a good no load mutual fund or something similar. Good luck to you.

 

[twoodcc]

well it turns out that the suzuki was sold yesterday. today we looked at a 2008 tacoma prerunner with 50,000 miles for $20,000.

we drove it, and even ran the numbers on everything, including trading my truck. they payments could out to be $412 for 60 months or $355 for 72 months - much better than the $764 for 48 months i have currently.

simple math:

$764 x 48 = $36,672
$355 x 72 = $25,560
$412 x 60 = $24,720

if i did the trade, i'd probably go with the 72 month loan. that's a savings of $11,112 (36672-25560) if i drag it out for the full 72 months.

what do you think? it's a 2008 with 50,000 miles, and it's got a few scratches and what not, nothing big. just general wear and tear it looks to me. it drove fine.

it's basically the same truck, except it has an automatic transmission and it's only 2 wheel drive instead of 4, but i can live with it. my wife really likes the tacoma better than the frontier or any other midsize truck.