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re: when's the best time to trade in your vehicle?
Posted on 1/25/17 at 9:49 am to Honky Lips
Posted on 1/25/17 at 9:49 am to Honky Lips
quote:
3 scenarios:
A. the second your loan balance gets low enough for a decent trade-in and the value of your car is still relatively high
2. when you vehicle is paid off. you get the full equity in your car, but it's probably gone down significantly in value during the last few years of ownership
D. a few years after it's paid off. you wont get jack for the trade-in but you get a few years of no notes.
I try to keep them twice as long as it takes to pay them off. By that time they are pretty worn down. I actually kept a Silverado about 6 more years after I paid it off. As long as they are maintained and not involved in collisions, vehicles tend to last a long time. 8-10 years and 150,000+ miles is really not a big deal these days for most models.
Helpful tip: Women don't have an understanding of vehicle maintenance. Be more proactive about replacing batteries, bulbs, etc. on her car before they fail to ensure that she doesn't have any issues. If she loses confidence in the vehicle (which will happen if a battery dies or if the check engine light comes on just for a second), she's going to want a new car.
0
Posted on 1/25/17 at 9:53 am to YouAre8Up
quote:
The longer you hold on to the vehicle the more it depreciates in value (in most cases) through out the life of the loan.
But there is a point at which the value you get out of owning a particular car vs. the value of it at trade probably level out. The trade in value would be so low it wasn't worth trading in compared to it's value to you (comfort, usefulness, reliability, etc. would all play into this). Or you can have low personal value in the use of the car, and the trade in (net after what you owe) is higher than that. But that's a case by case basis for each person. You can't just make a blanket statement on this.
Posted on 1/25/17 at 9:59 am to ConfusedHawgInMO
quote:
Going from a $0 pmt to a $500 pmt freakin sucks, but for some reason going from $450 to $550 doesn't seem as bad.
Could you be buying more vehicle than you are comfortable with? I noticed on modern cars and trucks that the options can inflate the price by as much as 30-40%. Even a Chevy Cruze or Honda Civic can have up to $12,000 in additional options. The base price for them is around $20,000....so a fully optioned model is a pretty big leap. It's even worse in domestic pickups.
I see a lot of people that either don't need a truck at all, or can easily get by comfortably with a fairly basic model. They could save a lot by finding whatever Ford/Dodge/Chevy is on sale and skipping the higher end features if they were so inclined. There's always use for an old pickup truck. They aren't particularly hard to sell used even if they are fairly stripped down with visible wear and a lot of miles. If they run and are priced fairly, it will sell very quickly even with scratches or small dents.
I guess the flip side is that if you intend to spend a lot of hours behind the wheel for 7-10 years, you should ensure that it has comfort/convenience features. I can see that point of view as well.
I try to buy whatever is on sale at the time. Usually it is a bodystyle that has been out for several years, and it typical is the "middle of the road" trim level with a lot of inventory. We actually didn't buy the Outback until the new body style came out. We bought a 4th generation model after they had started building the 5th generation model....and ended up with a very good deal. Designs that have been out for a while also have the benefit of being easy to research known problems.
This post was edited on 1/25/17 at 10:11 am
Posted on 1/25/17 at 10:09 am to slackster
quote:
A guy like you pops up in these threads all the time. You're so proud of the ability to pay cash for a vehicle that you don't realize it is actually a poor decision given the alternatives. Just think about how much money you'd have if you understood how it works.
And a guy like you pops up in these threads all the time and thinks he is Karl Marx and the greatest "deal" is using low interest car loans for a financial tool to make money.
There are a lot better returns on investments that I prefer to indulge in. I'm guessing you are the AutoYes credit manager?
Let's just say I'm old so I'll sit back and reflect on my poor decisions and how much money I would have if only I used Ford Motor Credit in my lifetime.
But hey man, good luck with that 72 month financing at 2.9% on the Buick. Sounds like you are heading onward and upward and living the American dream albeit one with the short term cash flow problem.
Posted on 1/25/17 at 1:46 pm to Bama323_15
quote:
18 years without a note here.
Damn you WIN
Posted on 1/25/17 at 2:22 pm to baobabtiger
quote:
When the cost of repairs outweighs the cost of replacing it
FIFY.
It's a depreciating asset so always go for the lowest possible cost (note + maintenance + taxes + insurance).
Posted on 1/25/17 at 2:39 pm to Honky Lips
I was driving a 2004 Yukon I had since new up until October. I had wanted to upgrade but it was in fantastic shape, and I didn't want the note.
It ended up getting totalled (not my fault) and I got about $2.5k more from the insurance company than any KBB value I had seen.
At that same time GM was running 0% on their trucks.
It all worked out perfect
It ended up getting totalled (not my fault) and I got about $2.5k more from the insurance company than any KBB value I had seen.
At that same time GM was running 0% on their trucks.
It all worked out perfect
Posted on 1/25/17 at 8:06 pm to Martini
quote:
And a guy like you pops up in these threads all the time and thinks he is Karl Marx and the greatest "deal" is using low interest car loans for a financial tool to make money.
quote:
But hey man, good luck with that 72 month financing at 2.9% on the Buick. Sounds like you are heading onward and upward and living the American dream albeit one with the short term cash flow problem.
As I figured, you simply don't understand how money works yet you've made money in spite of your limitations. Congratulations.
Posted on 1/25/17 at 8:18 pm to slackster
quote:You are most certainly always better off NOT paying interest.
I know enough to know that you think paying cash for a vehicle is a better financial decision than financing that vehicle, which means you either:
Posted on 1/25/17 at 9:24 pm to Geauxtiga
I'm on my 3rd year without a note, but the transmission is slipping. It was a used car so I knew it had some miles on it. FWIW - I only drive about 3000 miles a year so that is helping me hang onto this car for a little while longer.
Posted on 1/25/17 at 10:58 pm to Geauxtiga
quote:
You are most certainly always better off NOT paying interest.
Firstly, you can often get zero percent interest with enough credit, especially someone who presumably has enough cash to pay cash instead.
Secondly, it is obvious few people understand the time value of money. While I can't put a value on how not having a note makes you feel, I can unequivocally tell you it is the poorer financial decision. It's really not debatable.
This post was edited on 1/25/17 at 11:15 pm
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