84 month Financing,Crazy?
Logistics Pro
Joined: Apr 2017
Posts: 3,674
Likes: 51
From: SoCal
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.
Senior User
Joined: Jan 2006
Posts: 224
Likes: 1
From: Central Massachusetts
I wonder how many people are over there heads in a truck they really cant afford? Everybody needs a reliable vehicle but at the end of the day..they're still just a piece of machinery.
My term if for 5 years and will have it paid off in about half of that time....on a 2016
My term if for 5 years and will have it paid off in about half of that time....on a 2016
Posting Guru
Joined: Aug 2010
Posts: 1,237
Likes: 3
LOL do you actually believe everyone on the internet? I guarantee most of these guys saying they paid cash for their truck either are lying or their company bought it for them which in their mind they paid cash.
More Turbo
Joined: Oct 2017
Posts: 741
Likes: 234
From: S. Indiana
Since we have your "guarantee" that most of these guys are lying, it must be true ........ LOL
Posting Guru
Joined: Aug 2010
Posts: 1,237
Likes: 3
I assume youre one of those guys who paid cash for your truck and now youre salty. Maybe you believe everything you see on the internet but I take people's word on here with a grain of salty.
Lead Driver
Joined: Jan 2017
Posts: 6,840
Likes: 4,131
From: Jacksonville
Or they own the company that bought the truck, which would, in effect, make the statement factual. Or they actually told the truth and paid cash? As pointed out by another post, this forum represents a very minute sampling of SD owners. Why would someone put lies out there to try to impress people they don't know and will probably never meet? Doesn't make sense to me.
Senior User
Joined: Nov 2017
Posts: 156
Likes: 0
Thats what I was getting at. It doesn't matter if we are talking about their truck, or home or RV, they all paid them off early or paid cash (on the forums, this one or cummins or GM full-size). My wife and I make very good money but I am not paying cash for any of it while interest rates are so low. Use other peoples money when you can and invest diversely with yours for the long term is my motto.
Senior User
Joined: Nov 2017
Posts: 156
Likes: 0
Or they own the company that bought the truck, which would, in effect, make the statement factual. Or they actually told the truth and paid cash? As pointed out by another post, this forum represents a very minute sampling of SD owners. Why would someone put lies out there to try to impress people they don't know and will probably never meet? Doesn't make sense to me.
People lie all the time for the sake of lying and keeping up with the Jones's. Just go to any fitness club and you can find copius amounts of people that will lie about all the weight they can press. I have been working out since I was a teenager and still see it to this day. It is probably the biggest lie told to this day.
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Cargo Master
Joined: Aug 2010
Posts: 3,228
Likes: 64
We were the first ones in our family to buy a house. 1991, paid $185K for it. Put $50K down and financed the rest at 15+% !
RE-financed it as soon as the rates got affordable, down to around 6% and was happy.
We put $15K of hard updates on the house, and sold in 1998 for $180K, 5000 less and seven years after we bought it.
So much for the never fail at real estate investing.
On the plus side. When we sold that house we bought our 2nd house at $238, with only 5% down and paid the PMI crap.
2 years later the housing market in our area is great, with just a letter to the bank they reevaluated, dropped the PMI and sent us a check for $1,800.
Couple months after that we refinanced for a 25 year bi-weekly which will now be paid off in 6 months. And the best part is we are currently valued at over 500.
But we have financed the rest of the luxuries, cars, trucks, boats etc.
We have been real lucky with my wife's cars. Her last 3 Lincolns were through Ford credit, 60 months - 0%. How can you not take up offers like that.
I sure hope we can do well when I am ready to order my 450 this year or next, and it will be financed as well. No way can we afford to drop $90K cash on a new truck.
Junior User
Joined: Dec 2013
Posts: 84
Likes: 0
From: Hollister, CA
Couldnt agree more. I going with the biggest down I can get together and go for the longest loan time. This allows me to pay double or whatever when i can and fall back to a smaller payment if required. Everyone's circumstances are different. At the end of the day do whats best for you.
Posting Guru
Joined: Aug 2010
Posts: 1,237
Likes: 3
Thats what I was getting at. It doesn't matter if we are talking about their truck, or home or RV, they all paid them off early or paid cash (on the forums, this one or cummins or GM full-size). My wife and I make very good money but I am not paying cash for any of it while interest rates are so low. Use other peoples money when you can and invest diversely with yours for the long term is my motto.
Posting Guru
Joined: Aug 2010
Posts: 1,237
Likes: 3
Or they own the company that bought the truck, which would, in effect, make the statement factual. Or they actually told the truth and paid cash? As pointed out by another post, this forum represents a very minute sampling of SD owners. Why would someone put lies out there to try to impress people they don't know and will probably never meet? Doesn't make sense to me.
Laughing Gas
Joined: Apr 2012
Posts: 902
Likes: 51
From: Clark, WY
I have a degree or two in this area and I whole-heartedly agree.
Post Fiend
Joined: Apr 2002
Posts: 19,311
Likes: 97
From: Waterloo, Iowa
Originally Posted by toymaster
I have a degree or two in this area and I whole-heartedly agree.
As mentioned everyones situation is different, but I see lots of young couples starting out in life without a lot of cash reserves, less than stellar earning potential, kids, and struggling to make rent or mortgage. People in general are under tremendous pressure to borrow to the hilt. It's just plain stupid. It is true that interest rates are relatively low though not for folks with bad or incomplete credit. Then the inevitable happens and all of a sudden there is no money to pay for all of the "stuff". See this all the time.