- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Coaching Changes
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Should I pay cash for a new vehicle?
Posted on 6/13/23 at 2:23 pm
Posted on 6/13/23 at 2:23 pm
I have a 2013 F150 that been paid for but it's time it needs to go due to "pending repairs". I can get $9K on it on trade from the dealership that has new vehicle I want that cost 60K.
I have no debt, a great job but plan to retire in 2 years, have money set aside for retirement (you dont drive a 2013 truck without some basic financial restraint)
1) Options are:
1) Cash out a CD and pay cash for the new vehicle.
2) Use $20K cash and take out the balance via "401K loan" to myself to payback over 2 years
3) Takeout the 401K loan to myself for the entire amount
4) Spend $2500 to repair an a old truck worth 9K that will probably need even more repairs soon
5) Finance at 7%*
Any advice greatly appreciated.
*just kidding, this isn't an option
I have no debt, a great job but plan to retire in 2 years, have money set aside for retirement (you dont drive a 2013 truck without some basic financial restraint)
1) Options are:
1) Cash out a CD and pay cash for the new vehicle.
2) Use $20K cash and take out the balance via "401K loan" to myself to payback over 2 years
3) Takeout the 401K loan to myself for the entire amount
4) Spend $2500 to repair an a old truck worth 9K that will probably need even more repairs soon
5) Finance at 7%*
Any advice greatly appreciated.
*just kidding, this isn't an option
13
Posted on 6/13/23 at 2:28 pm to Crow Pie
I vote for...
4) Spend $2500 to repair an a old truck worth 9K that will probably need even more repairs soon
4) Spend $2500 to repair an a old truck worth 9K that will probably need even more repairs soon
Posted on 6/13/23 at 2:44 pm to Crow Pie
quote:
4) Spend $2500 to repair an a old truck worth 9K that will probably need even more repairs soon
Repair the truck and keep on chugging. Your new vehicle will need repairs soon too.
Posted on 6/13/23 at 2:45 pm to Crow Pie
What is the CD paying you?
Posted on 6/13/23 at 2:46 pm to Crow Pie
How confident your retirement will be fully funded with what you already have?
Posted on 6/13/23 at 2:46 pm to Chad504boy
quote:
Your new vehicle will need repairs soon too.
Probably not and even if there are any he would have a warranty for at least the first 3-5 years.
Posted on 6/13/23 at 2:48 pm to ItzMe1972
quote:Gonna need a $4000 transmission and transfer case soon as the 4x4 option is "acting up" (wont get in and out of Low4 without a small explosion)and that's the reason I cant keep it.'
4) Spend $2500 to repair an a old truck worth 9K that will probably need even more repairs soon
Posted on 6/13/23 at 2:57 pm to Chad504boy
quote:No it won't.
Your new vehicle will need repairs soon too.
Posted on 6/13/23 at 3:14 pm to Sterling Archer
quote:I am in good shape should have enough for at least 25 years
How confident your retirement will be fully funded with what you already have?
This post was edited on 6/13/23 at 3:50 pm
Posted on 6/13/23 at 3:17 pm to meansonny
quote:3.8% now and can get between 4.20% and 4.60% when it expires later this summer
What is the CD paying you?
Posted on 6/13/23 at 4:01 pm to Crow Pie
quote:
Gonna need a $4000 transmission and transfer case soon as the 4x4 option is "acting up" (wont get in and out of Low4 without a small explosion)and that's the reason I cant keep it.'
I'd sell the truck, but I wouldn't replace it with a brand new vehicle. I'd be looking for a 3-4 year old Tacoma.
Posted on 6/13/23 at 4:11 pm to AUHighPlainsDrifter
quote:I decided to go with a luxury SUV as I dont really need a truck anymore.
I'd sell the truck, but I wouldn't replace it with a brand new vehicle. I'd be looking for a 3-4 year old Tacoma.
I understand the idea about buying used but I cannot seem to pull the trigger on a used vehicle that out of warranty that cost 25 - 35K. Just as soon pay more for something new with a 5 year warranty.
Posted on 6/13/23 at 4:19 pm to Crow Pie
quote:
1) Cash out a CD and pay cash for the new vehicle.
Does your CD have enough to cover the total cost of the vehicle? If so, a CD loan would be a better option than cashing it out. Most banks are super flexible on CD repayment terms, and the great thing is that the CD continues to earn interest throughout the life of the loan.
This post was edited on 6/13/23 at 4:20 pm
Posted on 6/13/23 at 4:25 pm to BenDover
quote:Would the 401K loan be a better option as I pay myself interest and the only cost is loss of the growth?
Does your CD have enough to cover the total cost of the vehicle? If so, a CD loan would be a better option than cashing it out. Most banks are super flexible on CD repayment terms, and the great thing is that the CD continues to earn interest throughout the life of the loan.
Posted on 6/13/23 at 4:31 pm to Crow Pie
quote:
3) Takeout the 401K loan to myself for the entire amount
What would be your repayment rate to your 401k while doing this and would it be paid within two years? This would be my likely choice as long as it is paid prior to your retirement. The choices are pretty fungible depending on the repayment rates. What is the $20k currently earning?
Posted on 6/13/23 at 4:44 pm to Crow Pie
quote:
4) Spend $2500 to repair an a old truck worth 9K that will probably need even more repairs soon
This by a pretty wide margin imo
quote:
you dont drive a 2013 truck without some basic financial restraint)
This is not very old.
Posted on 6/13/23 at 4:48 pm to Crow Pie
"Better" is subjective, only you can answer that.
With the 401k, obviously it's great because in the end you receive the asset and your interest. Downside is money out of your wallet (paycheck, really) will be large. Right now you're looking at a 9.25-10.25% rate on a 401k loan. Just using my own YTD return rate, my 401k is up 14%. For me personally, that is not the place I want to be taking money from. Lastly, (for simple numbers) if your 401k has 200K in it, and you take 60K out for loan, you're only gaining 14% on 140K (obviously grows as you contribute and make payments).
With the CD, most places use +2 APY to determine loan rate so you're looking at 5.8%. Yes you're losing the interest to the bank, but you're also still gaining interest on the total CD amount, not just the net amount after loan (opposite of 401k). Effectively, your interest rate is then 2%.
With the 401k, obviously it's great because in the end you receive the asset and your interest. Downside is money out of your wallet (paycheck, really) will be large. Right now you're looking at a 9.25-10.25% rate on a 401k loan. Just using my own YTD return rate, my 401k is up 14%. For me personally, that is not the place I want to be taking money from. Lastly, (for simple numbers) if your 401k has 200K in it, and you take 60K out for loan, you're only gaining 14% on 140K (obviously grows as you contribute and make payments).
With the CD, most places use +2 APY to determine loan rate so you're looking at 5.8%. Yes you're losing the interest to the bank, but you're also still gaining interest on the total CD amount, not just the net amount after loan (opposite of 401k). Effectively, your interest rate is then 2%.
Posted on 6/13/23 at 5:03 pm to BenDover
quote:Wow..there isn't a fund in my 401K near that. Most of our choices are in the 5-6 % YTD range.
Just using my own YTD return rate, my 401k is up 14%
Posted on 6/13/23 at 5:21 pm to Crow Pie
I was in those target date funds that they auto-enroll you in because I never messed with it. Finally took a second last fall and it was moving slow so I threw the entire balance into S&P 500 and got lucky on timing.
Posted on 6/13/23 at 5:40 pm to Crow Pie
You can get 0% for 36 months on a new f150 xlt. Cash flow the payments.
Page 1 of 3
Popular
Back to top
Follow TigerDroppings for LSU Football News