[CASD]

If I want the SEL FWD Sage-Gray that is coming in to my dealership on around 9/1 I need to put $1000 down today...
My problems starts there...
I didn't expect to see anything until October...maybe farther out So my down payment funds will be lower than I planned at that time...
The price $29155 I'm not sure at the moment what add-ons they have added but it looks like around $700 not sure how much they pay for delivery but I used the $1200 number
So anyway ..between my funds being lower at 9/1 then I would like and the slightly higher price...My payment is going to be higher then I wanted...
And I'm really thinking of forgetting the Cruz and going with my build on the Maverick which comes too $28350 and it will be farther out which means my down will be bigger...
But my trade in will be worth less...not sure how much but it could hit that magical 100,000 mile mark and worth less could be even more

My head hurts LOL Any Thoughts? Be nice to see other ideas...

 

[JMII]

I wouldn't make any decisions without test driving BOTH vehicles to form an option. At this point you haven't even seen either in person, this is a big commitment to make based on just pictures and specs. Think of this as getting married, don't you want to go on a few dates first?

Rule #1 in car buying - don't fall in love with ANYTHING. Its just metal and plastic, a mass produced thing that will be widely available in the coming months.

Rule #2 - don't start off upside down, if you can't put 20-30% down either in cash or trade value then technically the vehicle is over your budget.

Personally I've come to the conclusion that this is looking more like a November purchase for me. Still too many unknowns (what do these colors really look like?) and dealers will be asking MSRP+ at first. I'm not dealing with that nonsense... so I'll wait.

 

[Rxturbo7man]

I wouldn't make any decisions without test driving BOTH vehicles to form an option. At this point you haven't even seen either in person, this is a big commitment to make based on just pictures and specs. Think of this as getting married, don't you want to go on a few dates first?

Rule #1 in car buying - don't fall in love with ANYTHING. Its just metal and plastic, a mass produced thing that will be widely available in the coming months.

Rule #2 - don't start off upside down, if you can't put 20-30% down either in cash or trade value then technically the vehicle is over your budget.

Personally I've come to the conclusion that this is looking more like a November purchase for me. Still too many unknowns (what do these colors really look like?) and dealers will be asking MSRP+ at first. I'm not dealing with that nonsense... so I'll wait.

Well said, great advice, couldn't have said it any better.

 

[Mephistopheles]

I wouldn't make any decisions without test driving BOTH vehicles to form an option. At this point you haven't even seen either in person, this is a big commitment to make based on just pictures and specs. Think of this as getting married, don't you want to go on a few dates first?

Rule #1 in car buying - don't fall in love with ANYTHING. Its just metal and plastic, a mass produced thing that will be widely available in the coming months.

Rule #2 - don't start off upside down, if you can't put 20-30% down either in cash or trade value then technically the vehicle is over your budget.

Personally I've come to the conclusion that this is looking more like a November purchase for me. Still too many unknowns (what do these colors really look like?) and dealers will be asking MSRP+ at first. I'm not dealing with that nonsense... so I'll wait.

I disagree on the % down, as sure you are upside down for a bit, but unless your interest rate is really high, by my calculations (which could be flawed, but I have been refining my spreadsheet for a bit) if you invested that 6k you would get more growth over 60 months that you would pay more in interest.

If you already have $6500, roughly ~20% of a 32k vehicle, if you are getting charged 3.9% APR (I chose this because its between the 1.9% special rate and the 5% closer to norm, you pay $700 more in interest, but at 5% mutual fund growth, your 6.5k catches up quickly and gets you 1.8k in interest. So now you have 8.3k in liquid cash and a paid off vehicle with your 6k in it. Sure you have spent more to get here, but you didn't give up a stable pile of money to shave a few bucks in interest off of a depreciating asset.

I would agree, its far better to at least have the money on hand or in trade-in that you could cover the gap though, if you have an issue, I just don't think you should put any more in your vehicle than you have too, and just keep it in mutual funds unless you miss a payment or need it. You should be able to sell out of an M-Fund (As long as you set it up yourself in Fidelity/ TD Am./etc) and send over your money in a matter of days if you needed it, and you have the added benefit that even when your vehicle is paid off that money just keeps growing without being tended to.

 

[monogodo]

I disagree on the % down, as sure you are upside down for a bit, but unless your interest rate is really high, by my calculations (which could be flawed, but I have been refining my spreadsheet for a bit) if you invested that 6k you would get more growth over 60 months that you would pay more in interest.

If you already have $6500, roughly ~20% of a 32k vehicle, if you are getting charged 3.9% APR (I chose this because its between the 1.9% special rate and the 5% closer to norm, you pay $700 more in interest, but at 5% mutual fund growth, your 6.5k catches up quickly and gets you 1.8k in interest. So now you have 8.3k in liquid cash and a paid off vehicle with your 6k in it. Sure you have spent more to get here, but you didn't give up a stable pile of money to shave a few bucks in interest off of a depreciating asset.

I would agree, its far better to at least have the money on hand or in trade-in that you could cover the gap though, if you have an issue, I just don't think you should put any more in your vehicle than you have too, and just keep it in mutual funds unless you miss a payment or need it. You should be able to sell out of an M-Fund (As long as you set it up yourself in Fidelity/ TD Am./etc) and send over your money in a matter of days if you needed it, and you have the added benefit that even when your vehicle is paid off that money just keeps growing without being tended to.

True, but there are other things to consider.

I'll get 1.99% from my credit union. If I borrow $20k over 4 years, my monthly payments are $434. If I borrow $30k over 5 years, the payments go up to $526. That's $92/month that I could be spending on something else. My budget is comfortable with payments below $500/month. Even going up $26/month stretches it a bit too thin.

And yes, I have a sizeable down payment, as I've been saving for over a year for this truck vehicle.

 

[Mephistopheles]

True, but there are other things to consider.

I'll get 1.99% from my credit union. If I borrow $20k over 4 years, my monthly payments are $434. If I borrow $30k over 5 years, the payments go up to $526. That's $92/month that I could be spending on something else. My budget is comfortable with payments below $500/month. Even going up $26/month stretches it a bit too thin.

And yes, I have a sizeable down payment, as I've been saving for over a year for this truck vehicle.

That is fair enough, I was mostly responding to JMII that its not always perfect to just throw money at a new vehicle. If it was used, cash wouldn't be so bad due to depreciation slowing down.

Its far more important to stay on budget, though, than to force yourself into a corner, so do what you need to get the vehicle to a payment you are comfortable with, without paying on the vehicle too far out of warranty.

 

[JMII]

if you invested that 6k you would get more growth over 60 months that you would pay more in interest.

Or you could lose it all, that is the risk with investments.

Anyone stretching their budget is likely not moving spare money into investments, they are just trying to get a monthly payment that works for them. More money down helps with this, plus it covers the value gap due to that off-the-lot brutal depreciation hit. Its just more of a safety net in case your financial situation changes unexpectedly.

I actually use the investment strategy you are recommended when it comes to taxes. I keep more money in my paycheck, then invest that extra coin (leveraging a nice ROI) to easily cover my IRS payment. Your "refund" at tax time is actually just a return credit indicating you overpaid in taxes. Why have that money sitting in Uncle Sam's pocket week after week when it could be working for you year round?

Standard disclaimer applies: consultant YOUR financial advisor... I am just a guy on the internet

 

[Mephistopheles]

Or you could lose it all, that is the risk with investments.

Anyone stretching their budget is likely not moving spare money into investments, they are just trying to get a monthly payment that works for them. More money down helps with this, plus it covers the value gap due to that off-the-lot brutal depreciation hit. Its just more of a safety net in case your financial situation changes unexpectedly.

I actually use the investment strategy you are recommended when it comes to taxes. I keep more money in my paycheck, then invest that extra coin (leveraging a nice ROI) to easily cover my IRS payment. Your "refund" at tax time is actually just a return credit indicating you overpaid in taxes. Why have that money sitting in Uncle Sam's pocket week after week when it could be working for you year round?

Standard disclaimer applies: consultant YOUR financial advisor... I am just a guy on the internet

Well thats why I prefaced with the statement of using Mutual Funds. Even in massive market crashes, 20% pullback is an extreme case, and like last year, sometimes recovers very quickly, even offering more opportunity. My thought was not a suggestion for someone who can barely afford their car payment.

Good point about your taxes. I might start doing that and try and use the interest off of that money to pay my taxes each year. I'll have to calculate how much that would save me.

As JMII said, always consult a financial advisor and not trust us randoms on the internet, lol.

 

[Jim 99]

And be certain the Financial Advisor you pick is a Fiduciary and not a Broker.

 

[CASD]

Everything is good.... I've decided for me and timing, I will be going with a Maverick Hybrid unless something changes in the next 30-45 days.. I'll be cancelling my $100 reserve fee tonight..
Hope the best for you all...

 

[Rxturbo7man]

Or you could lose it all, that is the risk with investments.

Anyone stretching their budget is likely not moving spare money into investments, they are just trying to get a monthly payment that works for them. More money down helps with this, plus it covers the value gap due to that off-the-lot brutal depreciation hit. Its just more of a safety net in case your financial situation changes unexpectedly.

I actually use the investment strategy you are recommended when it comes to taxes. I keep more money in my paycheck, then invest that extra coin (leveraging a nice ROI) to easily cover my IRS payment. Your "refund" at tax time is actually just a return credit indicating you overpaid in taxes. Why have that money sitting in Uncle Sam's pocket week after week when it could be working for you year round?

Standard disclaimer applies: consultant YOUR financial advisor... I am just a guy on the internet

Not everyone is savvy enough to go the investment route, plus the truism of having money for a rainy day. One should never have to be concerned about meeting payments on a vehicle. What we need vs what we want.