Thinking of taking an 84 month car (truck) loan...AM I NUTS

Toymaker

Farm Hand
Messages
63
So heres the deal...I want a new truck.

Been saving for a while, my present vehicle is a 2012 and the urge for something bigger and feature laden is growing.

I like Toyota, been getting some tempting offers on new and dealers locally are pushing incentives hard.

Now I looked at used and it all seems to be overpriced or over driven...or both.

New, I can get what I want - at the payment I LIKE - but have to go 84 months. I guess as you moveup, terms get longer.. Rate isnt horrible (under 5) but still - 84 MONTHS!!

I know, I can just pay it like a 60 and skip a month if I needed to...and with plenty down I should never be under water...still, when did quality trucks get so pricey.
 

Julianna

Farm Hand
Messages
25
Aren't most people underwater once they drive the car off the lot? The value depreciates immediately, whether you paid in cash or financed the vehicle. Personally, I can't imagine having the discipline and the ability to save up to buy a vehicle, only to turn around and take out a seven-year loan. You're doing so well by building up that fund. Keep saving until you buy what you can afford and drive the truck you have right now into the ground. Trucks get beaten up anyway. Because here's the thing, next year a whole new set of shiny trucks will enter the market and they'll have the latest, greatest technology. It happens year after year.
 

Qapla

Farm Hand
Messages
97
You might ask about left over NEW trucks from last year ... you usually have to ask because they would rather sell you ones they don't have to discount

That said, it depends on you. If you are one of those people who seem to always have a payment ... 84 months is fairly "common" with today's prices.
 

Toymaker

Farm Hand
Messages
63
There is alot of mis conception about "losing thousands" when you drive a new vehicle off the lot. Simplest explanation is this...you cannot recover taxes - those are end user cost. Buy a new car for 40k and 8% taxes...you lose $3200 in taxes immediately.

Said car is worth less once titled, but how much...alot depends on make/model. Asian main nameplates (Honda/Toyota/Subaru) fair well...it might now be a 38k car...domestic...closer to 35k. Domestic luxury (Cadillac) you might be lucky to see 33k (I know...they dont make 40k cadillac new...but as an example).

Trucks, espc 3/4 ton, Diesel and Toyota seem to fair well used resale wise.
 

Wildlife

Golden Chicken
Messages
132
If you swing the payments with ease okay,but todays average vehicles I feel poor investment after 3 or so years...that's me tho. ;)
 

Farmallh

Farm Hand
Messages
53
Ouch, 84 months. That's a long time. Most warranties won't even come close to that time period. If you do decide to buy it with those terms, check into the extended warranty. We just bought a new truck - 6 year loan.
 

Fishheadbob

New member
Messages
4
That is a long time. Shop around for the best interest rate you can find, interest can make a huge difference in the amount of your payment. With a good interest rate you could possibly get into a shorter term..
I would suggest you look at the total you wind up paying over 7 years. A salesman is unlikely to show you just how much your total payments will be, but a loan officer at a bank or credit union will before you sign at the dealership's finance office which is a profit center for the dealer.
 

Toymaker

Farm Hand
Messages
63
Drive a truck into the ground? Sorry - not my style. ANY modern vehicle maintained regularly should have minimal drive train issues...exluding sensors/electronics. 99% of the horror stories you hear involve failed electronic components..regardless of the make/type of machine.

My #1 pet peeve, people who literally trash their vehicle - looks like some 19 year olds dorm room inside, 3 mismatched tires and been hit more often than the lotto. Of course these are also typically the people complaining about horrible resale on their cars.

Warranty...who cares....again most warranty is druvetrain only. Anyone recall what the warranty was on a late 70s domestic auto? Yep..basically none...might have been a year. These are considered the "low point" in modern vehicle quality standards...the first generation of disposable cars...yet people bought them with no warranty and survived (gasp). Warranty wasnt an issue till around 1983/84 when Chrysler made it their selling point (and paid the price after a huge sales boost and the subsequent failure of so many of these vehicles).

If someone is willing to loan 6-7 years on it...they either must have some degree of confidence in its resale, the buyer ability to repay or a moderate case of insanity.. or a combination of 2 or more. Banks know how to make money even in recessions.

As I said, rate isnt bad (sub 5)...I understand compound interest, and COULD just go shorter term or pay cash even. But I like flexibility...lile the flexibility to take $500 a month I budget towards a car and pay $300 towards a payment and putting $200 into a savings or other stable value investment - then if I need maintnance, I have a reserve to dip into...easier than say doing 48-60 months at say 500 or 400 a month.

Cars as an investment...never. But you cannot approach everything as an "investment". I take vacations too...not because I get a return on what I paid for them...but because I enjoy them
At the same time - I pay CASH for my vacations...credit cards/loans on such things are just bad financial managememt. I know people so damn tight they drive 15 year old Volvo wagons and keep every penny they earn in the market/savings...good for them, but I believe in BALANCE - if a vehicle makes you happy, go for it...just keep it within reason, ensure there is a backup plan and your not living paycheck to paycheck and dont buy to impress the neighbors, buy what you like.

All of this said, I think Im going used. At least I am 98% on it. Yes, new is nice...but being selective on used is better $$ wise. I can get same vehicle at same payment...just a year or 2 less payment for going a year or 2 older...might even go 3 or 4 and to a higher trim. I am not typically a fan of "fancier" trucks...but what I have noticed...the fancier ones tend to be better kept. Base models get driven hard for 3 years and turned in...higher trim might be 4 or 5, then traded off.

Car shopping to me is actually enjoyable, but I have worked around shops before and know how to treat it. Dont let pressure stress me out, dont buy from someone who tries pressure (even if they are a few dollars cheaper on the front end - they have a plan of attack waiting for you in the finance managers office),know used means you have to be decisive, and understand "window" prices are negotiable no matter what they say...but "internet" prices are typically within 3-5% of the expected sale price. (Its easy to sort prices on the web, so low price gets the first click...but in person - there is no competition, so mark a car high and let the customer beat you down to feel like they got a deal).

Alot of this doesnt just apply to cars too...go tractor/equipment/atv shopping. Everyone wants to "win" - scoring that elusive best price. Funny thing is - Id estimate half of the buyers either cant recognize a great deal and blow it trying to haggle a dealer down more...or get "upsold" into things they never needed...all in the name of "0% financing".
 
 
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