The automobile purchase dilemma

**Tabs** · 07-25-2015, 09:15 AM

At first, I was all for replacing the truck, because there is a phenomenon where towards the end of a vehicle's lifecycle, the cost of maintenance increases greatly. I forgot the name of this... anybody remember it?

Anyways, then I saw this:

con If I somehow lost my job would be in a pinch with note AND rent etc. Yikes.

That there (and other cons) changes everything. I see no reason to put yourself in a financially precarious position if you don't have to. If you buy now, you are in danger, but if you wait, you can always buy the truck later when you really need it.

For that matter, does it have to be such a newish truck? Couldn't it be a couple of years old with a bit more miles on it? For example, I see a 2013 Silverado with 12k miles on it for $23k near me. That's not bad.

Does it even have to be a truck at all?

**ESMonitor** · 07-25-2015, 10:51 AM

Tabs, good question. If i can find a good deal I would be willing to buy a used truck, just dont want to put myself in a situation where I am paying it off + visits to mechanic when things start going wrong an going out on it. I am also reluctant to buy from someone i don't know.

job is a serious concern and one of the things holding me back for now. There are some changes taking place at where I work and I want to see how things play out.

Also - it doesnt have to be truck. If I could buy a used auto of any kind for $6k to $12k i would seriously consider it if car is in good shape. if deal is right.

Truck reason - the bed comes in handy whenever u need to haul something, feel safe in it, and most importantly if i ever get in a hunting/fishing camp I would have to have one. I have a lifetime license to hunt and fish in Miss. Also if i ever needed to haul anything like a 4 wheeler, boat or something I would have that option. Getting a car rules all of that out. But a car has its benefit too, with better gas mileage, easier to park and navigate through town.

After getting the repairs done I am considering holding on to truck for another year as I just pumped $1,800 into it with repairs and new brakes. The plus side is I did not spend a dollar on the truck aside from oil changes since Nov 2013 so a little over a year and a half no expenses, that makes me feel better about it, still in the positive. If it starts going downhill, thats the risk I am taking.

**corn18** · 07-25-2015, 12:15 PM

I'll chime in with the standard SA answer: need more detail. Can't make a recommendation with just the info provided. What is net income / month, monthly expenses and savings (emergency, all other).

If you are saving $1,000 / month, maybe that could go into a new car fund for a year while you keep this one running. Hard to tell without all the details.

Tom

**Jsteinkruger** · 07-25-2015, 12:44 PM

Have you also accounted for the new insurance premium for buying a much newer vehicle? Be a big one if you want from 2002 to 2015. I think this is one thing a lot of people do not consider when buying a car because they are so focused on getting the perfect vehicle. I am sure your agent would give you an estimate before buying.

**tripods68** · 07-25-2015, 12:55 PM

Without the detail finances, my recommendation and a statement.

YOU CANNOT AFFORD TO BUY A NEW TRUCK, today, tomorrow, next week, or next month.

Keep the old truck while saving up to buy a new TRUCK - PAY CASH! I know its a simple concept, right? Its very hard to do to save up to buy a new car and pay cash for it. Look at your entire budget (income versus expenses) where you can cut back, cut the cable instead, you can even sell 'stuff' decluttering your life. Maybe you can sell some old stuff you no longer need. Cut off the coffee or Starbucks and buckle up rave up savings. Even if it takes 3 years to save for a new truck, you've at least afforded to pay for a new truck.

**snafu** · 07-26-2015, 04:51 AM

It's my hope that you'll make the decision to buy your next vehicle based on fact. You're the best guy to look after your money.

$ 42,160. [Trade $ 4K + 38,160 in payments] over 6 yrs is not a decision to be made in response to emotion, nice paint, or commissioned salesman looking to transfer your earnings to his pocket. I suggest some research before you fall head over heels in debt. What are the factual pros and cons of that particular model in unbiased publications like Lemon Aid and Consumer's ? What are it's weak points? What was the best rig in that category? What features are worth the price? Which are just add-on profit for manufacturer and dealership?

I don't understand your reasoning...how does a new Silverado make you more focussed? Does it balance the resultant debt? Is this desire for a new truck based on expensing $ 1,500. for brakes and repair on current truck? That equals about 2.85 payments of the vehicle payments you're considering. Are you comfortable carrying such a high debt load for such a long time ? What value in 2021?

1st why do you need a truck? They are more expensive to insure and operate. Can you justify buying a new/demo this late in the season knowing year one deprecation hits the moment you drive off the lot! Year two depreciation hits when the new model arrives in the show room. You could ask for bids electronically from dealerships within a two hour drive. Likewise seek a 2 y/o vehicle with transferable warranty knowing KBB.

Sorry to be so wordy but how many times in the last 12 months have you needed to haul stuff that just would be impossible in a car? How many times did you need a truck to be able to go fishing or hunting in Miss? What is the likelihood of camp membership or further in debt to buy a recreational four wheeler, boat, holiday trailer etc in the next few years? Doe your current Silverado disqualify?

I'm confused about how your truck affects your job. What changes do you anticipate? Why does the vehicle you drive affect your relationship with co workers? Do you dislike people because of the vehicle they drive to work?

**ESMonitor** · 07-26-2015, 08:38 AM

The consensus I am feeling here if for me not to buy the truck.

Well, maybe that's a good thing.

That's what I am trying to figure out.

new truck:

$38,854
-4,000 trade in
$34,854
$1,751 tax
$179 doc fee
$10 title
$36,795
$3,750 rebates
$33,045 selling price hypothetical $530 note for 72 mos

I make $70k per year. I am 42, single, no dependents, no debts. I have $42k in savings.
As a supplemental job loss emergency fund I have 10 weeks of vested annual leave saved.

Of course I have no plans to lose my job, nobody does, my plan is to grow, but in Sun Tzu terms, you have to expect the best but also be prepared for the worst.

I am still in an apt. At some point I have to move into a house. My lease runs out in April of 2016. I plan to sign for another 13 mo term. When that lease terms runs out in May 2017 I will be ready to move and should have a house lined up for move out.

At the front end of each month I put a $1,000 in savings (i am on salary), pay my bills and live off the remaining money from paycheck. Some months I do better than saving a $1,000, but I never move more than a $1,000 into savings because some months I take a hit with expense and this was one of those months with $1,800 mechanic bill, so I let that extra money stay in my checking account to offset any over and above expenses such as a mechanic bill, etc.

Also, there's a grey area with financial peace, I think, where you have to figure out what's most important to you, such as paying for a cable bill or a gym membership or living without them.

I agree with ya'll I don't want to pay a $530 note each month. But at some point my truck needs to be replaced with an upgrade, be it truck or car.

Do I have to have a truck? No. But driving a pick-up fits my psyche, they come in handy at times but I am not crazy about the fuel economy with them. But this silverado demo I was in the other week just made me feel good inside. Felt good in it. There was a sense of happiness that came with it.

So it's a priority thing: thrill of not having a note > having a new automobile

or...

Thrill of having a new ride/note > driving a depreciated vehicle with high mileage that's paid for.

Please provide feedback if possible. I'd love to hear your thoughts about what you would do. I hope I have provided more detail to help you make a more valid assessment.

Thanks,

ES

**ESMonitor** · 07-26-2015, 08:39 AM

Originally posted by Jsteinkruger View Post

Have you also accounted for the new insurance premium for buying a much newer vehicle? Be a big one if you want from 2002 to 2015. I think this is one thing a lot of people do not consider when buying a car because they are so focused on getting the perfect vehicle. I am sure your agent would give you an estimate before buying.

I have no taken this in consideration at all, good point! Thank you.

**feh** · 07-27-2015, 05:49 AM

Haven't read the thread, but I'll throw out one suggestion - never finance a vehicle for more than 36 months. Ideally, it should be purchased for cash.

**ua_guy** · 07-27-2015, 07:04 AM

Trucks really aren't that expensive to insure, and the operational costs probably aren't what people imagine for newer trucks. If you want to drive a truck, drive a truck.

Can you afford it? Financing for 72 months doesn't sound like a great plan. Maybe look at a more affordable truck (the pricing, options, configurations are almost endless in the truck world). Or a GM certified used truck.

**snafu** · 07-28-2015, 06:56 AM

The new facts you offer has me wondering how to put you in a newer truck based on fact, not emotion because your current Silverado needed brakes and some repair. Please put together facts like how much will it boost annual insurance? What are the weak points of a Silverado as outlined by vehicle experts like Phil Edmonston [Lemon Aid]? Would you be willing to take a photo of current Silverado, write a brief description for local Facebook buy/sell page and Craigslist to gauge interest/response?
I wouldn't happily make 3 extra payments that $ 1,500. represents.

I'm really bothered by the fact that the new vehicle will take a major depreciation hit the second you drive it off the lot since the 2016 models will be at the dealership shortly. I'd expect year end pricing. Bids from other dealerships and research on a 2 y/o Silverado with transferable warranty all help put you in a stronger negotiation position for the truck that fits your psyche. These big item purchases need a fair bit of work. You want to buy and sales guy wants commission. They lose their job if they don't bring in the required dollar value.

72 months is a really long payout period; would the $ 530. monthly payment come from earnings or would it significantly reduce your $ 1K savings program? What interest rate? Can you get a better rate from your bank or a Credit Union? It would put your plan for home ownership in jeopardy but if you boosted your downpayment from savings you'll save yourself interest. The dealership has padded their profit with the document fee and lowball value for your trade. They will likely find 4-6 more fees before all is signed off so be prepared to stand your ground with no, no, no.

BTW, these 0% interest deals are misleading, either workedinto the price or commission from complicated lender formula like GMAC financing.

**bjl584** · 07-28-2015, 07:18 AM

I don't know your income, but it sounds like you can't afford a new truck.

However, there is nothing wrong with a used truck. There are plenty out there that would drive just fine and fit in your budget.

**corn18** · 07-28-2015, 08:39 AM

Originally posted by snafu View Post

BTW, these 0% interest deals are misleading, either workedinto the price or commission from complicated lender formula like GMAC financing.

I've heard this before but I wonder how it works. I ask because I was going to pay cash for the last car I bought, so I negotiated from a cash position and got the best price I could. I walked away once but got a call back and we agreed on a price. Then, and only then, I asked about the 0% for 60 months financing. Had to talk to their finance guy and he gave me the 0% AND a $500 financing incentive and the sales price didn't move. I just got the car that I was about to pay cash for for $500 less with a 0% loan. They gave that to me but did not increase the price of the car that I had negotiated from a cash position. That I paid off 3 months later because I didn't want a loan (mental issue).

So what am I missing?

**ua_guy** · 07-28-2015, 09:12 AM

Originally posted by tomhole View Post

I've heard this before but I wonder how it works. I ask because I was going to pay cash for the last car I bought, so I negotiated from a cash position and got the best price I could. I walked away once but got a call back and we agreed on a price. Then, and only then, I asked about the 0% for 60 months financing. Had to talk to their finance guy and he gave me the 0% AND a $500 financing incentive and the sales price didn't move. I just got the car that I was about to pay cash for for $500 less with a 0% loan. They gave that to me but did not increase the price of the car that I had negotiated from a cash position. That I paid off 3 months later because I didn't want a loan (mental issue).

So what am I missing?

You're not. I've done the same thing. Everyone else will say you didn't negotiate hard enough or aren't smart enough. Not true. 0% financing is an incentive, and it gets a lot of people in the door that can't actually qualify for it, but end up buying a car anyway.

The automobile purchase dilemma