2005 T4R: Should I buy or wait?

[MeddlingKids]

Here's the situation:

I'm considering buying a new 4-Runner but can't decide whether to do it now, or five months from now when I get my yearly bonus and salary increase. This is a promotion year for me, so I'm fairly sure I know what my salary is going to be. Also, given the firm has had a good year and it's promotion time, there should be a fair amount of bonus money waiting for me.

Now, enough of that. I've figured out that, after taxes and 401(k) contribution, I currently have 17% of my Net available to contribute to savings. If I buy a 4-Runner now, I'd have 11% of my Net to savings. So, one might think I'd be best off waiting for the new salary and bonus. But, here's where the wrench gets tossed in.

I've found a dealership that seems willing to pay me MORE than I paid for my Civic a year ago. If I wait to purchase the 4-Runner, while it won't really drop in price, my trade offer will probably drop by about $3,000. Additionally, if I keep my Civic for another 5 months, I'll have to pay my registration, buy tires, and spend about $400 in preventative maintenance on it. I've determined that I would have about $5000 in positive equity in the 4Runner after a year, by only transferring in my equity on the Civic.

What would you guys do? Oh, my payment on the T4R would be $450, while my Civic is $262. (60 mos)

 

[MeddlingKids]

Feel free to offer your opinions.

 

[snap315]

It sounds like you've got your financial numbers all in order.

The deal on your civic sounds great and since the outlay of $$$ for the 4Runner will be about the same now or later I'd buy it now.

Think about it this way...

The $$$ is still coming out of the same pocket (yours); it's just that the pocket will be bigger in a few months and you won't notice the missing $$$ quite as much then (but it will still be gone). :

Good luck.

 

[Bobby]

If I were in your situation, I'd get the 4runner. By waiting, you stand to lose money on the Civic within that time frame.

Sounds like you have all your financials in line and it looks like the smart thing to do would be to get the 4runner now rather than later.

So what are you waiting for?

 

[TeCKis300]

You currently have a golden oppurtunity with the trade in. I would definitely buy now if I were in your shoes.

 

[X5Runner]

NOPE! Think twice about the almost double payment ($450 Vs $260), and you're expected to pay atleast 80% more for gas once you own a 4runner. Also, insurance will be inreased between 30-50% compared to your current premium on the Civic. I'd not pull the triger unless you received a huge securely promotion. Depreciation on the Civic will be nothing compare to the slump of the SUV's value during the gas crisis. After all, it's your money, your responsibility. Do what ever works best for you. Opinion is just an opinion.

 

[Bluto]

I bought my 4Runner sooner because of a trade-in offer I could not pass up. But my payments went down (better interest rate). My insurance stayed the same.

 

[MeddlingKids]

NOPE! Think twice about the almost double payment ($450 Vs $260), and you're expected to pay atleast 80% more for gas once you own a 4runner. Also, insurance will be inreased between 30-50% compared to your current premium on the Civic. I'd not pull the triger unless you received a huge securely promotion. Depreciation on the Civic will be nothing compare to the slump of the SUV's value during the gas crisis. After all, it's your money, your responsibility. Do what ever works best for you. Opinion is just an opinion.

My gas expenditure would go up by 80%, but my insurance will increase less than 10%. I've checked with my insurer.

 

[alpha]

NOPE! Think twice about the almost double payment ($450 Vs $260), and you're expected to pay atleast 80% more for gas once you own a 4runner. Also, insurance will be inreased between 30-50% compared to your current premium on the Civic. I'd not pull the triger unless you received a huge securely promotion. Depreciation on the Civic will be nothing compare to the slump of the SUV's value during the gas crisis. After all, it's your money, your responsibility. Do what ever works best for you. Opinion is just an opinion.

The Civic might have a higher insurance rate actually. I'd recommend to ask your insurance company what it would be, but if its not a factor.. then.. But I don't know. I don't think Toyota is offering any special interest right now, but I'm sure they will do so soon.. so if you could wait for that, it would bring your payments down. I'd have to calculate what your payments would be with a lower interest rate, how much you would save, and how much the difference in trade in value between now and waiting would be versus how much you save.. My opinion, check to see if Toyota is offering special financing soon, and then go from there.. But essentially, its your decision, so choose what you think is best for you..

 

[MeddlingKids]

Well, I'm headed back over to the dealership this morning to see if they bite on $26,000 for the 4Runner and $16,000 for the Civic, or somewhere around those numbers. If they do, I should be in a very good position with this truck, equity wise, throughout ownership. While gas prices may affect SUV sales somewhat, I don't think it's going to have a huge effect on used 4Runner value. Even in high gas price times people are spending money on gas guzzling SUVs, trucks and sports cars.

 

[X5Runner]

The Civic might have a higher insurance rate actually. I'd recommend to ask your insurance company what it would be, but if its not a factor.. then.. But I don't know.

Huh! You're counting backward my friend. Here is an example:

Married man in the early 30's, with a perfect driving records in the last 10 yrs.
All quotes are actual number for a full cover per 6 month premium by State Farm with 100/50/100 covered.

Vehicle #1: 98 Honda Civic EX $312
Vehicle #2: 01 Honda Accord V6: $368 with mutiple vehicle discount.
Vehicle #3: 05 Toyota 4runner $486.51 with mutiple vehicle discount.

 

[MeddlingKids]

The Civic might have a higher insurance rate actually. I'd recommend to ask your insurance company what it would be, but if its not a factor.. then.. But I don't know.

Huh! You're counting backward my friend. Here is an example:

Married man in the early 30's, with a perfect driving records in the last 10 yrs.
All quotes are actual number for a full cover per 6 month premium by State Farm with 100/50/100 covered.

Vehicle #1: 98 Honda Civic EX $312
Vehicle #2: 01 Honda Accord V6: $368 with mutiple vehicle discount.
Vehicle #3: 05 Toyota 4runner $486.51 with mutiple vehicle discount.

The newer Honda Civics can have an exceptionally high insurance rate in California, due to its common theft. Again, I have talked with my insurer (State Farm) and they have quoted me an insurance for the 4Runner which is less than 10% more than my 2004 Honda Civic. Also, if you're planning on giving me a lesson in equity loss on trading newer cars, my equity in the vehicle substantially exceeds my initial down payment after less than 12 months.

 

[arouth]

Have you thought about selling your vehicle private party instead of trading it in? I had a 97 Ford F-150 and I took out a $50 newspaper add sold it for $7500 which was $2000 over kelly blue book trade in value.

Also, I would recomend that you buy it now. You can probably get some decent incentives now.