How best to fund new auto purchase?

[indiajust]

I am leaning towards separating the payment and truck decisions. Figure out how much truck you need to finish the project. Then figure out how to pay for it.

I like financing it since it will allow you to defer and adjust your mindset. You don't yet have a way to decum in a reliable fashion. You lack process.

Use the financing time to get your head set on a comfy plan to spend down.

I keep 6 months to a year in cash, the rest goes into buckets.

Set a cash level you are comfy with, in terms of estimated annual expenses. Then figure out a way to decum monthly to keep that cash level as you pay your bills.

My bet is that taxes go up, so I push to fill a bracket, while doing what I can in the way of tax loss harvesting.

I wonder if it would help to look at the financing window as a glide path. Project the accounts from where they are, minus your budget, and where you want to be. Pick a target for net worth, or by account.

The puzzle is solvable in smaller pieces.

 

[Drake3287]

I recently bought a new $70k F150 ($80k including tax and registration) and I had already saved $40k throughout covid simply because there was nothing to buy or everything was too expensive. I simply put the $40k down and financed the remainder at 7% just so I could get a "better deal" through the dealership.

Once I got the first payment in the mail I simply paid off the remaining $40k from my savings/investments and now just pay myself back each month instead of the bank. This way I'm savings thousands of dollars which would have gone to the bank. If you have the funds, give yourself a loan and simply repay yourself each month each you can trust yourself to do it.

Now when friends or family ask me how much my monthly payment is I simply say I paid cash. Always raises a few eyebrows!

 

[TheWizard]

I recently bought a new $70k F150 ($80k including tax and registration) and I had already saved $40k throughout covid simply because there was nothing to buy or everything was too expensive. I simply put the $40k down and financed the remainder at 7% just so I could get a "better deal" through the dealership.

Once I got the first payment in the mail I simply paid off the remaining $40k from my savings/investments and now just pay myself back each month instead of the bank. This way I'm savings thousands of dollars which would have gone to the bank. If you have the funds, give yourself a loan and simply repay yourself each month each you can trust yourself to do it.

Now when friends or family ask me how much my monthly payment is I simply say I paid cash. Always raises a few eyebrows!

I've done similarly.
But I'm really old now (75) and don't have to save for retirement anymore, so I've got lots of extra income that piles up.
My 2016 F-150 Lariat FX4 is still doing well but getting close to 100k miles on the odo.
So maybe I'll upgrade to a new one in a while, likely after the tariff issues have died off...

 

[Drake3287]

I've done similarly.
But I'm really old now (75) and don't have to save for retirement anymore, so I've got lots of extra income that piles up.
My 2016 F-150 Lariat FX4 is still doing well but getting close to 100k miles on the odo.
So maybe I'll upgrade to a new one in a while, likely after the tariff issues have died off...

Yep, I was in the same boat, just a little younger. I had a 2010 F150 with nearly 100k miles and I had money piling up each month because I've already hit my savings/investment goals for retirement. Nice place to be.

 

[Lorenzo]

OP here (but I suppose you can see that). I just spent $2300 to give the the 2002 4Runner a reprieve for another year or so. It really is in good condition for its age. The Toyota specialist shop I took it to won't work on cars older than 25 years, though, and I may have already mentioned that the shop DW and I have long used won't work on cars older than 20 years. When I do sell it in a year (or two?!), it will likely be to a 4Runner enthusiast who does their own repair work--there are plenty of those.

 

[pb4uski]

^^^ I've never heard that shops won't work on cars beyond a certain age... that's age discrimination! I've pbably never heard of it because I have never kept a car that long. In Vermont where we lived most of our adult lives, the winter salt and brine wold have rusted the frame long before 25 years went by.

 

[Koolau]

^^^ I've never heard that shops won't work on cars beyond a certain age... that's age discrimination! I've pbably never heard of it because I have never kept a car that long. In Vermont where we lived most of our adult lives, the winter salt and brine wold have rusted the frame long before 25 years went by.

I've always favored independent shops. Most will w*rk on any car and they know how to find parts (scrap yards if need be).

 

[Lorenzo]

I've always favored independent shops. Most will w*rk on any car and they know how to find parts (scrap yards if need be).

Well, the mom-and-pop shop my wife and I had been using for my vehicle (and still do for hers) has a 20-year limit. I thought that was unusual, but the independent shop I just went to that specializes in Toyota has a 25-year limit, as I mentioned. So maybe it's becoming more common? I suspect they make the choice to keep their prices as low as possible rather than pass on to their customers the cost of their time spent searching for old parts.

 

[ArmchairMillionaire]

If it's such a major purchase don't spend $50k. That's a lot of money! My buddy just bought a 2019 Lexus SUV for $28k and it's perfect! Looks brand new!

+1! And you don't even have to buy used.

We bought a brand new Chevy Trax last January for around $23K. Chevrolet claims it's an SUV, but to us, (and the EPA) it's more like a small wagon. We paid cash for it. Getting around 34 mpg with it. Very happy with it so far.

Not ours, but looks just like this one...

That's a used one and they're asking $21K for it.

 

[brett]

Cash.

Unless Toyota offers me 0 percent financing on the new vehicle that I ordered last week.