84 month Financing,Crazy?
Senior User
Joined: Jun 2012
Posts: 100
Likes: 2
From: St. Louis area
Great that y'all can drop down $1000-$1400 a month on a 48 month truck loan or pay cash and all. Not everybody is in a spot to do that, and it doesn't mean they can't afford, or don't need one of these trucks. I plow snow for the company I work for. It's a large commercial account with one of the major RR company's. I have to have a 3/4 ton truck min. And that's a stretch legally. I carry a 700# plow and a 1.5cu yard salt spreader in the winter, and I needed the payload that a 1 ton truck would give me. My old truck is a 96 f-250 7.3 that although it is a really good looking, and thus far dependable truck. It has 360k miles on it. I drive 25k miles a year. I started looking for a used truck, but I soon realized that I would be better off buying a new GAS f-350 for many reasons like alluminum, less maintenance, warranty, less downtime, and better longer financing then can be had on a old used diesle. My credit is in the good territory with exelant vehicle history, but I have a monster open tax lein from working for myself and being young and stupid. A bank or CU will not touch me for any loan with a tax lien. I had 5k on me cash at the dealer, but I would also need to buy ladder racks, bed liner, and a few other things. Allready paid jeep off 6 months early and paid down my CC's in preparation. Sticker on the truck I ordered was 53k (f350 XLT premium ccsb)price negotiated was around $48k. w / incentives . The two choices they cam back with where Ford credit. 2K down 74month @8.5% with room to add in extended warranty and gap. With just gap the payment would be around $750. Or Ally 2k down, + $600 cash for the gap purchased outright (2600 down) no room to buy warrantys 84 months, @ 7.19% with a payment of $682, but I did have to leave $1250 in Ford incentives on the table. Now my company leases my truck from me for $325 a month, pays my fuel, and pays my insurance because of our plow account. The lease payment is 1099, so I'll get to claim milage, and take depreciation on the truck. I took the 84 months. I can always pay more, but I have a manageable payment if something crazy happens with my currant work arrangement. we had a very week winter, and I still made 15k salting this year. That's enough to pay 2 years worth of payments. I sleep fine at night after buying this truck, even if I had to take a 84 month loan on it.
Posting Guru
Joined: Nov 2010
Posts: 2,043
Likes: 4
Trucks (and especially new Superdutys) are hot ticket items and have been for awhile, it’d take a an unbelievable economic turndown to find yourself upside down on a new truck if you keep it at least a year and don’t beat the crap out of it.
Senior User
Joined: Apr 2017
Posts: 399
Likes: 1
I only read the first couple pages but I noticed one thing that a lot of people stated. 84 month loan means being upside for the duration of your warranty. As someone that has an 84 month loan I can state that this is absolutely inaccurate. I was in the green within a year on my truck. My current trade in value is roughly the same as my payoff and my private party value is about $3k above my payoff.
Lead Driver
Joined: Jan 2017
Posts: 6,840
Likes: 4,131
From: Jacksonville
Oh, I heard it was the other way around, don't finance a depreciating asset. I guess I screwed up royally then. Either way, I don't pay anyone else's bills on here (unless you're on welfare, and I highly doubt that's the case) so if you are comfortable with it, by all means go ahead. This is a depreciating asset for me and I will probably do it again an 18-24 months.
Senior User
Joined: Apr 2017
Posts: 399
Likes: 1
Oh, I heard it was the other way around, don't finance a depreciating asset. I guess I screwed up royally then. Either way, I don't pay anyone else's bills on here (unless you're on welfare, and I highly doubt that's the case) so if you are comfortable with it, by all means go ahead. This is a depreciating asset for me and I will probably do it again an 18-24 months.
Tuned
Joined: Jan 2012
Posts: 292
Likes: 25
Absolutely one will be under water with an 84 month note. Thosands of $$ disappear as soon as it is driven off the lot - but the debt remains, and so does the interest on that debt. Nice work if you can get it. Not buying more than you can afford gives you options if things were ever to go sideways for whatever reason.
The law of supply and demand applies to money, and credit too. Cars would be a lot cheaper if more people paid cash. If the only thing keeping car makers in business is running Americans into bankruptcy, hell let 'em die now, it's only a matter of time. Wages have been stagnant 40 years now, and today both parents (if there even ARE two parents) have to work to make ends meet, back in the day only dad worked. Moms were expected to stay home with the children, as society then had antiquated, backward ideas such as women were better mothers, goofy stuff like that.
The law of supply and demand applies to money, and credit too. Cars would be a lot cheaper if more people paid cash. If the only thing keeping car makers in business is running Americans into bankruptcy, hell let 'em die now, it's only a matter of time. Wages have been stagnant 40 years now, and today both parents (if there even ARE two parents) have to work to make ends meet, back in the day only dad worked. Moms were expected to stay home with the children, as society then had antiquated, backward ideas such as women were better mothers, goofy stuff like that.
Fast forward to present, my wife quite her day job when child #1 was born in 2007 in order to stay home with him, child #2 was born in 2012 and will be entering kindergarten this fall. We're now discussing about my wife getting a PT job in the fall with the school for some extra money. We've been living on one income for 10 years so it can be done. It isn't how much you make, it's how much you don't spend.
More Turbo
Joined: Feb 2013
Posts: 618
Likes: 69
So there is the no-debt side of the argument and the debt is O.K. or even good side of the argument.
For those that believe you should finance a truck for 7 years and at 100%, does that also apply to your mortgage as well? I mean, why ever pay off the house when you could just get an interest only loan and theoretically invest the rest of your disposable income. 10% in the market vs. 4% for the mortgage. A 6% spread looks appealing. I knew plenty of guys with $700,000 interest only loans around Washington DC in 2006 that all of a sudden were sitting $200,000 in the hole once the market crashed. So much for houses always being an appreciating asset.
I'd wager that few actually invest in the market as much as they say they do. The market did well last year, but back in 2000 and 2008, it was a different story and there could be other factors that pop up and leave you leveraged beyond what you can recover from.
I'm in the no debt camp myself and like to minimize stress and risk. Financially it doesn't make sense on paper, but having peace of mind and not having to worry about owing money to anyone is pretty nice and stress free once you get to that point or make the decision to live without debt hanging over your head.
For those that believe you should finance a truck for 7 years and at 100%, does that also apply to your mortgage as well? I mean, why ever pay off the house when you could just get an interest only loan and theoretically invest the rest of your disposable income. 10% in the market vs. 4% for the mortgage. A 6% spread looks appealing. I knew plenty of guys with $700,000 interest only loans around Washington DC in 2006 that all of a sudden were sitting $200,000 in the hole once the market crashed. So much for houses always being an appreciating asset.
I'd wager that few actually invest in the market as much as they say they do. The market did well last year, but back in 2000 and 2008, it was a different story and there could be other factors that pop up and leave you leveraged beyond what you can recover from.
I'm in the no debt camp myself and like to minimize stress and risk. Financially it doesn't make sense on paper, but having peace of mind and not having to worry about owing money to anyone is pretty nice and stress free once you get to that point or make the decision to live without debt hanging over your head.
Posting Guru
Joined: Mar 2018
Posts: 1,962
Likes: 11
From: Fairbanks, AK
Agreed. In poker/gambling, it's called "variance". Your bankroll must be able to handle the variance/swings. It's a very similar idea on investing and borrowing. If your finances can't handle the variance, you've overextended yourself. It's only as stressful as you make it.
