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Old 08-24-2019, 02:07 AM #1
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Any other 5th gen + weekend car owners? Need advice

I've been juggling with the idea of selling my 18 Civic Type R this whole week. To keep the post short and to the point, I currently daily my 15 4runner PRO (which I still make payments on) alongside my 18 CTR (also making payments). I've been fortunate financially with my career which allows me to make payments on these 2 vehicles but in my honest opinion, its a bit excessive having 2 car payments.

I also currently have a little one on the way (our first, due Oct/Nov) which has me contemplating on letting the Civic go and putting that extra money aside and/or invest it elsewhere and purchase another fun car in a few years(Something I can build and enjoy with my son in the future).

I like the Civic a lot and I do believe it checks off a lot of the boxes for me with what I look for in an "enthusiast". I will say, next to my old S2000, the Civic has been one of the most enjoyable cars I've owned and driven. But paired with the 4Runner as my daily, I am maybe taking the Civic out 3-5 times a month. I guess the reasonable, practical part of me says to sell the Civic and continue daily'ing the 4Runner which would eventually become the main family hauler. The selfish- YOLO part of me says to keep the Civic. If I'm being honest, I'm not sure I have a car in mind that I see as a suitable replacement to the Civic at this moment.

P.S. Selling the 4Runner is not an option, I absolutely love the thing.

TLDR: Own a 15 4Runner PRO + 18 Civic Type R, have 2 car payments. Finances are not an issue, have first child on the way and keeping 4Runner for family/off road duties. Responsible thing to do is sell Civic, save and invest the extra payment money and eventually buy something cheaper in the future that I can pay mainly with cash. Or YOLO, keep the Civic, continue to pay it down and make memories with my family, maybe someday pass the car off to my son (Not sure if I can see myself keeping a car that long).
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Old 08-24-2019, 02:12 AM #2
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Get rid of civic. Pay off 4runner, save money, when the 4runner is paid off and you didnt need that money you saved by not making the civic payments, put that into a dedicated summee if you still have the hankering for a summer.
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Old 08-24-2019, 08:01 AM #3
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People with money ask how much for the vehicle and pay cash. Broke people ask how much are the monthly payments and make the purchase. You have 2 monthly payments with a child on the way? Just a guess, but you're paying over a $1000/month in cars/insurance? Put your money in stuff that appreciates in value, and anything with wheels WILL go down in value. Sell the civic, pay off the 4R and never finance a vehicle ever. You'll enjoy life with your new child and family not having to worry about making a car payment.

Listen, I don't want to sound righteous. But when I was in my early 20s I started my career in Respiratory Therapy. This older RT, he looked like he was in his mid 40s or early 50s if I remember correctly. I was already working as an RT for 2 years and had mostly paid off all my debts. He suggested to me that I buy a house since I was so young, and the reason being is that by the time I'm in my 40s, it'll be paid off. Well, guess what, I took his advice and bought my house at 23, and it'll be paid off in my 40s.(I'm 40). I'm still living in said house that I paid $147,000 in the Austin, TX area. That was in 2003, the house has gone up in value, significantly.

One of the biggest financial mistakes I made in my 20s was buy a brand new 4R. I had this financial mentality like you... finances not an issue, I'm making a 6 digit income and I can afford the monthly payment Truth of the matter was that I was actually broke, didn't have a 3-6month emergency fund, still paying on some of my debts. I wish now that the $32,500 I paid for the brand new 4R I used to invest in a Roth IRA, do the math on the compound interest on that, roughly $398,000 growth in 20 years, making just $5000 in payments on that a year and growing at a modest 8% interest rate.

What could you do with that money? You could send your kid(s) to college, really enjoy it now, and pay for a brand new 4R in CASH. If you have this YOLO mentality, SPEND SPEND SPEND...you'll be broke all your life bro. Don't do it, your new family deserves better. Congratulations. Peace.
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Old 08-24-2019, 10:12 AM #4
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My 4runner is my daily. I have a paid off srt4 as my fun car and it's nice not having to worry about breaking something and not being able to get to work. I agree with the above post, having a loan on a fun car is not worth it unless your credit cards/student loans/other debts than a mortgage are paid off and you are still putting money into savings and saving for retirement. The opposite would be you only live once and if you're not struggling financially and the civic makes you happy then keep it. There will always be cool cars out there to have and if you took the money and invest it, someday you could have your dream car (unless a civic is). Only you can make the decision.
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Old 08-24-2019, 02:46 PM #5
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Quote:
Originally Posted by Ventil8 View Post
People with money ask how much for the vehicle and pay cash. Broke people ask how much are the monthly payments and make the purchase. You have 2 monthly payments with a child on the way? Just a guess, but you're paying over a $1000/month in cars/insurance? Put your money in stuff that appreciates in value, and anything with wheels WILL go down in value. Sell the civic, pay off the 4R and never finance a vehicle ever. You'll enjoy life with your new child and family not having to worry about making a car payment.



Listen, I don't want to sound righteous. But when I was in my early 20s I started my career in Respiratory Therapy. This older RT, he looked like he was in his mid 40s or early 50s if I remember correctly. I was already working as an RT for 2 years and had mostly paid off all my debts. He suggested to me that I buy a house since I was so young, and the reason being is that by the time I'm in my 40s, it'll be paid off. Well, guess what, I took his advice and bought my house at 23, and it'll be paid off in my 40s.(I'm 40). I'm still living in said house that I paid $147,000 in the Austin, TX area. That was in 2003, the house has gone up in value, significantly.



One of the biggest financial mistakes I made in my 20s was buy a brand new 4R. I had this financial mentality like you... finances not an issue, I'm making a 6 digit income and I can afford the monthly payment Truth of the matter was that I was actually broke, didn't have a 3-6month emergency fund, still paying on some of my debts. I wish now that the $32,500 I paid for the brand new 4R I used to invest in a Roth IRA, do the math on the compound interest on that, roughly $398,000 growth in 20 years, making just $5000 in payments on that a year and growing at a modest 8% interest rate.



What could you do with that money? You could send your kid(s) to college, really enjoy it now, and pay for a brand new 4R in CASH. If you have this YOLO mentality, SPEND SPEND SPEND...you'll be broke all your life bro. Don't do it, your new family deserves better. Congratulations. Peace.
That's not true. Paying cash for a car is dumb. Interest rates are stupid low. Make the payments and invest the rest, using the money coming back on investments to pay the vehicle
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Old 08-24-2019, 02:52 PM #6
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Sell it. If you have to ask then you already know.

I'm successful and it's because of good decisions not because of my income.
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Old 08-24-2019, 03:17 PM #7
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Quote:
Originally Posted by gainman View Post
That's not true. Paying cash for a car is dumb. Interest rates are stupid low. Make the payments and invest the rest, using the money coming back on investments to pay the vehicle
I disagree with this. Considering you reallocate the same amount of money of a car loan you end up at a null point.

If you take out a 30k car loan at 2% interest and just pay the payment while taking that 30k and putting it into a CD which would probably make 2% interest minus taxes on the gains, you are actually on the losing end.

I hate loans but they do help build credit. There is nothing wrong with a loan as long as you pay it off. I took one out on my 4r, kept the loan for a year then paid it off. But I also have the mentality that when taking out a car/personal loan or using a credit card, it is smart to have the cash to pay it off set aside. I use my credit card to get miles/perks etc but if I buy something I have the cash to pay the entire balance the next month so they get no interest from me.

Having a loan is a negative for me because of these points:
-Having a loan means you owe someone money
-It takes away financial independence
-If you lose your job or something happens, you are in a very bad spot.
-Your job can take advantage of you because you need to make a payment and would be unable to leave.

As was previously said, people with real money pay cash or have the cash set aside to pay off a car in an emergency. People without real money take out loans on everything.

Especially having a kid on the way, financial independence puts you in a safe spot and would help you to save up money for your kid/future/family as well as make sure you are not in a difficult position if something goes wrong. Losing your job, getting hurt etc, making you unable to work would be a catastrophic blow to you at this point.

I drive an older camry daily and use the 4r on weekends, for transporting large items, or driving in the winter. I also have a project car that I am building on the side that I never drive. Nothing is cool and fancy but they are all paid off. I would love to go out and buy an R35 to replace my camry but I just can't justify taking out a loan for it if it is not necessary.
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Old 08-24-2019, 06:38 PM #8
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Thanks for all the insight guys.

I talked it over with my wife and the rational thing to do is sell the Civic, take the equity I have in it and pay off the 4Runner. That alone will clear up about $1000 in payments a month.

As for a future fun weekend/project car, I'll just hold out until I find something I feel comfortable paying for in cash. Used to have an 04 S2000 that was paid off that I sold when I picked up the Civic... starting to regret that decision a bit.
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Old 08-24-2019, 09:01 PM #9
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Originally Posted by bRYANT619 View Post
Thanks for all the insight guys.

I talked it over with my wife and the rational thing to do is sell the Civic, take the equity I have in it and pay off the 4Runner. That alone will clear up about $1000 in payments a month.

As for a future fun weekend/project car, I'll just hold out until I find something I feel comfortable paying for in cash. Used to have an 04 S2000 that was paid off that I sold when I picked up the Civic... starting to regret that decision a bit.
Smart man! That's why I just keep my G35 as my project that I build on the side with spare(and I mean very spare) money etc. It's paid off and has potential to be built with lots of aftermarket support. Though it is way on the back burner for me since I have no use for it really. Just sits on a lift in my garage.

Family always needs to come first though. If I was going to have a kid I would make sure that everything else is put on hold as well. I still try to prepare just in case one day we do decide to have a kid in the next year or 2. I still try and save a lot just in case something unexpected happens. You never really know what can happen in life and it's always good to be prepared. even more so when you have a family that relies on you.

$1k per month that you save will go a long way to help pay for diapers and future college fund!

One day later down the road you will have another fun car. there will be much better tech anyway when that time comes.
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Old 08-24-2019, 11:15 PM #10
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I can totally relate to this, I was in almost the exact same spot. I had a 2016 Camaro SS that I used to daily, and club raced all summer. Had my first child 18 months ago, and the two payments just didn't fit my life any longer. Got a 2019 Pro a few months ago and let the Camaro go at the beginning of this month.

It sucked, quite frankly, but it was the right decision. My goal is to pay the Pro off ASAP white I set money aside for a true weekender that never has to be a daily driver. I've always been a Corvette fan and I have my sights set squarely on a C8 once the 4Runner is payed off. I do have an old '77 Stingray that's been neglected for a few years, but just no time to get it back into shape with the little monster at this age.

3 weeks after letting the Camaro go I found out #2 is on the way.
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Old 08-25-2019, 12:06 AM #11
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Quote:
Originally Posted by bRYANT619 View Post
Thanks for all the insight guys.

I talked it over with my wife and the rational thing to do is sell the Civic, take the equity I have in it and pay off the 4Runner. That alone will clear up about $1000 in payments a month.

As for a future fun weekend/project car, I'll just hold out until I find something I feel comfortable paying for in cash. Used to have an 04 S2000 that was paid off that I sold when I picked up the Civic... starting to regret that decision a bit.
If I could make a wee suggestion, take a small amount of the money you save and start building some sort of account that your upcoming little one can have when adulthood arrives. College fund, house fund, whatever. And by the way, congratulations!
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Old 08-25-2019, 01:14 AM #12
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Originally Posted by jdm-v35 View Post
I disagree with this. Considering you reallocate the same amount of money of a car loan you end up at a null point.

If you take out a 30k car loan at 2% interest and just pay the payment while taking that 30k and putting it into a CD which would probably make 2% interest minus taxes on the gains, you are actually on the losing end.

I hate loans but they do help build credit. There is nothing wrong with a loan as long as you pay it off. I took one out on my 4r, kept the loan for a year then paid it off. But I also have the mentality that when taking out a car/personal loan or using a credit card, it is smart to have the cash to pay it off set aside. I use my credit card to get miles/perks etc but if I buy something I have the cash to pay the entire balance the next month so they get no interest from me.

Having a loan is a negative for me because of these points:
-Having a loan means you owe someone money
-It takes away financial independence
-If you lose your job or something happens, you are in a very bad spot.
-Your job can take advantage of you because you need to make a payment and would be unable to leave.

As was previously said, people with real money pay cash or have the cash set aside to pay off a car in an emergency. People without real money take out loans on everything.

Especially having a kid on the way, financial independence puts you in a safe spot and would help you to save up money for your kid/future/family as well as make sure you are not in a difficult position if something goes wrong. Losing your job, getting hurt etc, making you unable to work would be a catastrophic blow to you at this point.

I drive an older camry daily and use the 4r on weekends, for transporting large items, or driving in the winter. I also have a project car that I am building on the side that I never drive. Nothing is cool and fancy but they are all paid off. I would love to go out and buy an R35 to replace my camry but I just can't justify taking out a loan for it if it is not necessary.
Who invests in CDs anymore?!?! CD only makes sense sometimes if you're near retirement and can't afford to take financial risks.
Paying off super low interest debt (practically free money) early for peace of mind is foolish if that $30K can return substantially more than you're paying out.

We only finance one car at a time (wife's Pilot is paid off), We have more than enough cash in rainy day savings to pay our '19 4Runner off. We financed at 2.5% then invest our money elsewhere at Waaaaaay higher than 2.5% return. Some years we do 6-8%, but some years we manage 30% + returns. Some years our investments yield higher returns than our annual salaries. Can't do that if our cash is tied up in a car. I honestly don't understand putting money into depreciating assets, when it can work for us earning much higher returns.

Having a loan is a negative for me because of these points:
-Having a loan means you owe someone money - This is an emotional reaction to the situation not one based in logic.
-It takes away financial independence - Investing money in appreciating assets to offset low interest debt can increase financial independence.
-If you lose your job or something happens, you are in a very bad spot - If I lose my job we have a one year rainy day fund plus investments that way outperform the low interest we're paying out. We save 27% of our gross household annual income in retirement investments on top of the rainy day fund.
-Your job can take advantage of you because you need to make a payment and would be unable to leave - Not necessarily the case if you live below your means and have backups in place. I can afford a $60K+ car, but I drive a $37K car.

All of that being said, I agree that having a weekend play car financed is not a sound financial decision unless...
  • You and your spouse are already investing at least 20%+ of your household income into retirement investments.
  • You have 8 to 12 months worth of expenses in a savings account/rainy day fund (not a CD or investment where the money isn't readily accessible).
  • Pay off all credit cards every month and have no other revolving credit balances.
  • You make A VERY high salary.

Credit card balances MUST be paid off in full every month.
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Old 08-25-2019, 07:45 AM #13
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I'm in similar spot minus the payments. I have an 06 4Runner and am supposed to be dailying my 91 Crx for the gas milage but love the comfort of the 4R. But now about to pick up 2012 4Runner Trail Edition and hate the thought of daily driving it. Got myself boxed in. All 1st world problems we have huh?

X2 on the S2000 sale. I had one and sold it years ago. Now it's on the bucket list.

Good Luck!

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Old 08-25-2019, 09:27 AM #14
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Lots of good advise here.

I fall into you need to live your life, while being responsible. I have know several people and relatives that picked the super conservative route, saving everything that died young, are dying young and didnt really do things they wanted to do. They where or are unhappy people. Almost all have been cancer.

So yeah, you on,y live once. Getting older kinds sucks. So if you can swing having a couple cars you are passionate about without a negative impact I dont see the harm. There are much worse problems to have.

Plus the 4R is going to last you a long time, way past a payment. As will the CTR since you are not putting a lot miles on it.

I tried for years to have a car that filled my desire for a sports car and a family car, ski car, camping, etc. the thing about any product that tries to do it all is that they are just okay at best at any of them.

I have a sports that sits nice and cozy in my garage that gets driven on nice days for fun, I love it, my daughter loves it and my wife loves it. It is a luxury but I am living my life. Nothing wrong with the 4R, but hopping in a nice sports car after driving the 4R daily makes the sports so much sweeter.

Another note. My wife bought her first car while in grad school, a 92 Honda Civic Si for 12k. We kept it a long time as a backup car. Sold it a few years ago, near perfect condition, low miles for 8K. So not all cars loss the same percentage over time. No doubt a well maintained CTR will not drop even close to most cars. Kinda like a 4RP.

And yeah, I do car payments because of the low interest rates. I make a much higher return on investments. So paying cash would not work in my favor.
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Old 08-25-2019, 12:20 PM #15
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Who invests in CDs anymore?!?! CD only makes sense sometimes if you're near retirement and can't afford to take financial risks.
Paying off super low interest debt (practically free money) early for peace of mind is foolish if that $30K can return substantially more than you're paying out.

We only finance one car at a time (wife's Pilot is paid off), We have more than enough cash in rainy day savings to pay our '19 4Runner off. We financed at 2.5% then invest our money elsewhere at Waaaaaay higher than 2.5% return. Some years we do 6-8%, but some years we manage 30% + returns. Some years our investments yield higher returns than our annual salaries. Can't do that if our cash is tied up in a car. I honestly don't understand putting money into depreciating assets, when it can work for us earning much higher returns.

Having a loan is a negative for me because of these points:
-Having a loan means you owe someone money - This is an emotional reaction to the situation not one based in logic.
-It takes away financial independence - Investing money in appreciating assets to offset low interest debt can increase financial independence.
-If you lose your job or something happens, you are in a very bad spot - If I lose my job we have a one year rainy day fund plus investments that way outperform the low interest we're paying out. We save 27% of our gross household annual income in retirement investments on top of the rainy day fund.
-Your job can take advantage of you because you need to make a payment and would be unable to leave - Not necessarily the case if you live below your means and have backups in place. I can afford a $60K+ car, but I drive a $37K car.

All of that being said, I agree that having a weekend play car financed is not a sound financial decision unless...
  • You and your spouse are already investing at least 20%+ of your household income into retirement investments.
  • You have 8 to 12 months worth of expenses in a savings account/rainy day fund (not a CD or investment where the money isn't readily accessible).
  • Pay off all credit cards every month and have no other revolving credit balances.
  • You make A VERY high salary.

Credit card balances MUST be paid off in full every month.
I believe both your and my points are subjective. I would not say right or wrong. Everyone has their own opinions on it and it also depends on your situation.

My point on the CD is because it is the only short term sure thing that won't lose money. There are no high yield savings accounts anymore or high interest bonds. Stock market is not safe IMO. But if you are good at playing the market, more power to you. Long term, 401k/IRA is a great investment.

-You can say its emotional but a loan is a loan, and until that car is paid off, you owe someone money and you don't own that car.
-Investing money in a depreciating asset as you said is never smart. Though it does not mean it should not be paid off. Also, it depends on your situation. We keep our cars till they die - literally, so I am not concerned about resale/tradein value so much as a smart initial investment that will last long. We also drive our cars <7k miles each per year so it should last almost forever.
-owing on any loan is not good and does take away from some financial independence. It is just always good to have the upper advantage in life and be able to have control over your job situation. Some just play it more safe than others.

Investments do not seem to work in my favor anyway is most interest gained just goes to taxes unless it is untaxable retirement income.

We live very very practically and like to be over prepared though so everyone just thinks differently. It does not mean be miserable and squeeze every penny. We definitely try live good lives, but within our means. Everyone's extra is what lies within their budget though of course. Some may have 0. some may be able to buy a lambo every year.

I don't think any of it is set in stone for anyone. They are recommendations and opinions, not rules and I would not try to force it on anyone. People also have to tailor these things to their specific life situation.

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