Merry Christmas Everyone,
I am looking to buy a Tundra. Trading in/selling my 2021 chevy Silverado. Tired of it being in the shop. I just want reliability. I use my trucks a lot. I hunt, fish, surf, drive on the beach, and flip homes. Can anyone give me some advice on anything to stay away from that were major issues in the past years. With my budget I’d assume I’m looking at something with high mileage. I am looking to spend around $30,000 or less. I understand the current market. But I’m making money on the Chevy so it’s all relative.
Back in March my 99 Ford exploder needed a $200 repair. I’d just made $100 in repairs the month before and $75 the month before that. Generally I see advice to buy a new car if your old one starts costing as much to repair each month as a car payment. I started shopping around for financing options and didn’t like what I was seeing. If I financed through my bank for example, they would require the financed amount to be $7,000 minimum on a car 4 years old or newer with less than 100,000 miles. APY would be ~18%. Since I’d need to also get comprehensive insurance coverage, the minimum payment I was looking at was around $170/mo for 72mos if I met the bare minimum requirements for financing with my bank and upping my insurance, including a $3,000 down payment.
I bit the bullet and repaired my car. I didn’t want to take on the credit hit nor the financial responsibility. My salary isn’t great right now and that’s a lot of money. But I know in 5 years, my salary and credit will be better and I could afford a bigger down payment.
Since March, I’ve put $150 away each month that would’ve been the difference in my current insurance and no car payment and the cost of getting the new car.
This has done a few things for me.
(1) more savings. If I suddenly need to make a large repair or afford a new car, I have more money to make the repair or down payment with. My old gal hasn’t needed a single repair since then, thankfully. I’ve put the money into stable ETFs with a 5 year time horizon and have actually made an average 9% return.
(2) I now know I could have afforded that payment, which is a huge peace of mind if I have to soon. I feel like the decision would have been less impulsive.
(3) I avoided the used car price surge. It was crazy to see used cars I was looking at a couple months before increase in price by ~20%. We don’t know how long this used car inflation rate will last, but at least it’s something I can spectate rather than experience.
(4) I’ve actually managed to raise my credit the last few months by almost 50 points. I also have enough room financially and credit wise to take an international trip using a travel credit card and earning a $500 value travel bonus.
In 5 years, I should be able to afford a $13,000 car completely out of pocket rather than a $7,000 financed car with more insurance costs.
If any of you are considering buying a new car, I’d recommend weighing your pros and cons carefully and on a long-term basis!
*Edit
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