Are you money savvy?

[96RedRunner]

It really depends on what your cash situation is. I had a coworker once who told me he took his entire cash life savings of 5 years work (he was late 20s) amounting to around $25k and bought a new car so he wouldn't have a loan. Interest rates at that time for car loans were around 3-4%.

Curious what you thought of doing that. Investing the $25k in the last 10 yrs
he could have recouped interest on loan and gained a compounded profit.
To each his own of course.

 

[D'arce]

Regarding the finance it and invest the difference crowd; would you take a loan out against your paid off 4runner at 2%, in order to invest it at 5%? Serious question.

I'm just throwing this out there...
If you take after the true inflation rate being close to 6% (shadow stats) as opposed the the stated official number of 2.3%; you would be loosing money. Nominally your account would be growing but you would be loosing purchasing power faster than your investment is making it.

If you believe the official number... you would only be eeking out .7% gains in real terms, not the 3% in your hypothetical.

 

[Muzzle of Bees]

Run the numbers through an amortization schedule with different rates to see the cost of the loan at each point in the game.
If rates are low I finance. They are still fairly low now too.
I am not concerned with losing value since 4Runners hold value well, so losing a bunch of money is not very likely.

 

[2016 4Runner SR5]

I make a lot, I spend a lot. Guess that just means I enjoy life!

 

[Jernik]

Question about the finance it then immediately pay it off process... wouldn't that require the lending institution be included in the title? Thus, extra hassle dealing with DMV when you pay it off to have the bank removed from title?
If done soon enough, could it pose complications - such as difficulty getting payoff paper from bank since they might not recognize a title is in their name, thus complicating your case to the DMV to remove bank from title? Just a thought that popped into my head.

 

[Kai Slater]

Buying anything with an engine is a losing proposition. It is true the moment you drive it off the lot it is worth less. I always pay cash and be done. Financing only makes the vehicle cost more!

Banks are not your friend!

Pay cash. Live FREE!

A lot of truth spoken right here. Good advice!!

 

[shrub1]

I keep my trucks a long time.
I paid cash and was done.

 

[soap94]

I'm in a position to purchase a new 4Runner. My question is this: is there any advantage to getting a loan (and paying it off in a couple days) versus paying by check? I'm thinking getting a loan would insert the bank in between me and the dealership, perhaps providing a buffer of sorts. For example, the dealership might have to adhere to certain standards with the bank that I'm unaware of when I write the check.

Thoughts, anyone? Thanks.

Well, at least I am trying to. I don't want to take many loans, because sometimes you don't know how payday loans work, and it can be a big disaster at the very end! I do believe people should be more financially educated.

 

[Bumbo]

I keep my trucks a long time.
I paid cash and was done.

Same here, keep trucks for a long time, but I still have to look at the cost of money. If the loan cost 4% and I can make 6% making my cash grow, I save/make 2%.

On the surface it appears borrowing money is a bad idea, until you let someone else borrow yours for even more money.

 

[Bumbo]

I'm in a position to purchase a new 4Runner. My question is this: is there any advantage to getting a loan (and paying it off in a couple days) versus paying by check? I'm thinking getting a loan would insert the bank in between me and the dealership, perhaps providing a buffer of sorts. For example, the dealership might have to adhere to certain standards with the bank that I'm unaware of when I write the check.

Thoughts, anyone? Thanks.

I once made a deal when buying my Acura… and then tried to charge the entire purchase to my credit card for the points.

I was going to pay it off right away anyways.

Dealership was a bit annoyed with me, but we compromised on a pretty large portion of the payment on the card. I got 3% back on points, and paid the rest by check.

 

[Dillusion]

Friend of mine is a car salesman. They make $ by offering you financing. If you pay cash, they will not negotiate as well with you since they're losing $ on the finance side. Finance it but be sure to get in writing that there is no penalty for paying it off early. Wait for the first statement to come through and pay it off in full. You will likely get a better deal that way and you will own your vehicle just the same.

Since this thread was brought back I don't believe this one bit. I'm not sure how they do business where you are at but

1. Don't get into any financing questions until after the amount is agreed upon. I sure as hell don't discuss how I'm going to pay until after I know how much I'm spending.

2. Do people actually finance through the dealer? Every single person I know does it through their preferred credit union.

3. Cash is king. Any dealer will gladly take your money immediately to guarantee a sale.

 

[Bumbo]

Friend of mine is a car salesman. They make $ by offering you financing. If you pay cash, they will not negotiate as well with you since they're losing $ on the finance side. Finance it but be sure to get in writing that there is no penalty for paying it off early. Wait for the first statement to come through and pay it off in full. You will likely get a better deal that way and you will own your vehicle just the same.

Not my story, but a family members…

He went in to buy a new Honda, looking a bit shabby and broke, spoke a lot about financing and “trying to get his payments down” . He basically he drove down the principal and the dealer tried to pull a shady but putting in a high interest rate on the contract. They were going to make some good money though financing. A few days after buying the car, he walked in the handed them a check. The dealer ship was pretty pissed, but there was no penalty for early payment. It is possible to work a dealer though the loan process.

 

[Bumbo]

Since this thread was brought back I don't believe this one bit. I'm not sure how they do business where you are at but

1. Don't get into any financing questions until after the amount is agreed upon. I sure as hell don't discuss how I'm going to pay until after I know how much I'm spending.

2. Do people actually finance through the dealer? Every single person I know does it through their preferred credit union.

3. Cash is king. Any dealer will gladly take your money immediately to guarantee a sale.

I believe it, but maybe not in modern day sales… that story I told was 18 years old.

That said, I have not been successful at working a dealership like that. Nor do I buy cars often enough to get the chance to try. I’m sure they have learned things over the years as well.

 

[thennen]

I believe it, but maybe not in modern day sales… that story I told was 18 years old.

That said, I have not been successful at working a dealership like that. Nor do I buy cars often enough to get the chance to try. I’m sure they have learned things over the years as well.

To update (I thought I had done so months ago - maybe I did elsewhere), I did end up buying a 2019 TRDOR, Nautical Blue, for $38.7k out the door. It ended up that I had two dealerships with the same truck (one had running boards, mine doesn't), and I was able to get them each to that same price over the phone. Went with the one closer to where I live.

Since I was looking to establish a relationship with the new dealership, I wasn't interested in pissing anyone off by playing money games. Maybe I could have saved a couple hundred bucks by doing so, but I didn't. Wrote a check instead.

A funny thing in all this - the very first time I ever drove one of these was when I bought this off the showroom floor and drove it into a thunderstorm. First vehicle I ever bought without a test drive. Really, the months of education I got here at T4R prior to purchase was invaluable, and even though I knew I wanted a 4R, the info I got here made me confident enough to buy without driving.

 

[Bumbo]

T
Since I was looking to establish a relationship with the new dealership, I wasn't interested in pissing anyone off by playing money games. Maybe I could have saved a couple hundred bucks by doing so, but I didn't. Wrote a check instead.

I used to think this was important… but it doesn’t appear to matter at all.

Most dealership service department doesn’t give two hoots where you bought the truck. Service and Sales are often times very fragmented even in goals and attitude. Having friends who work at dealers confirm this.

That said, working often with the same service advisor and giving the same dealer business has shown some benefits over the years. But nothing significant enough in savings where I don’t take my truck to a private independent mechanic for most of my needs. I have an even better working relationship with a local person who services a lot of my cars assuming I am not doing the work myself.

 

[thennen]

I used to think this was important… but it doesn’t appear to matter at all.

Most dealership service department doesn’t give two hoots where you bought the truck. Service and Sales are often times very fragmented even in goals and attitude. Having friends who work at dealers confirm this.

That said, working often with the same service advisor and giving the same dealer business has shown some benefits over the years. But nothing significant enough in savings where I don’t take my truck to a private independent mechanic for most of my needs. I have an even better working relationship with a local person who services a lot of my cars assuming I am not doing the work myself.

For the past several decades I've done pretty much all my own service work. So what paid off for me over time wasn't labor costs, but parts costs. The parts guy routinely marked off 20-25%. On my 1988 4Runner, I even got two sets of tires, on wheels, already balanced, that had been removed from other new trucks to upgrade. Those sets cost me $175 each set, which was several hundred dollars in my pocket. So that's partly what I'm after. Plus, good relationships in general never hurt

 

[BrianSD_42]

Curious what you thought of doing that. Investing the $25k in the last 10 yrs
he could have recouped interest on loan and gained a compounded profit.
To each his own of course.

[MENTION=142122]96RedRunner[/MENTION] sorry for the late response. I thought it was a ridiculous idea. Some dealerships were offering 1% loans for new cars and yes for sure he could have done much better things with the money.
.

 

[JLTD]

Friend of mine is a car salesman. They make $ by offering you financing. If you pay cash, they will not negotiate as well with you since they're losing $ on the finance side. Finance it but be sure to get in writing that there is no penalty for paying it off early. Wait for the first statement to come through and pay it off in full. You will likely get a better deal that way and you will own your vehicle just the same.

Truth here.

I used to work with a guy that previously did auto financing. In addition to the above I recall that he also said that if you can make a couple percent more, then finance and invest the cash.

 

[shoong]

How can one make money online now?

you can still make money online. just depends on what your expectations are. can you still make $500 - $1000/mo? sure. is it easy? moderately. Can you make $100,000/mo online? sure. is it easy? no, but it's doable.

 

[Carten]

Since this thread was brought back I don't believe this one bit. I'm not sure how they do business where you are at but

1. Don't get into any financing questions until after the amount is agreed upon. I sure as hell don't discuss how I'm going to pay until after I know how much I'm spending.

2. Do people actually finance through the dealer? Every single person I know does it through their preferred credit union.

3. Cash is king. Any dealer will gladly take your money immediately to guarantee a sale. But there are of course really dependable companies on the market.

3 golden rules! :cheers: