I dont plan on getting rid of my truck any time soon unless it gets totaled, bought it new in 06 when I was 20 and im gonna run it til it dies... plus I only owe 14K on it. new was almost 40K. I like my 0% interest.

 

I have been upside down in the past and will never do it again. Being upside down on a vehicle is the tell tale sign that you spent beyond your means and that you truly couldn't afford it in the first place. I realize "affordable" is a subjective concept, but one thing for certain is that a vehicle is not an investment but is an expense that depreciates in value and you should never ever be upside down at any point. Why? Because life is uncertain and it is wise to plan for the worst (and hope for the best).

I don't have any payments on any of my 4 cars. I'm not wealthy. I just work within my means. Any conservative method of finance management will work. Here is how I buy a car:

1. Decide what payments I want to budget and how much car that can buy.

2. Make a 50% down payment. If I can't swing that much down payment then I need to lower my price range or save more money.

3. Make double payments and stick to the budget planned in step 1. The car will be paid off in 2 years.

4. If possible, I prefer to have enough cash laying around to pay off the loan at any point. This shouldn't be too hard if you are following another golden piece of advice to always have 6 months of living expenses on hand at all times. This method paid off for me a year ago when my wife lost her job. I immediately paid off 2 cars and we didn't have to worry about making ends meet on my income (or sell a car).

Also keep in mind that if you buy new it takes 10 years to break even and start to get some payback. That's why I buy used. You don't have to buy new to get exactly what you want. It's out there on a used car lot somewhere.

 

i got my 99 two years ago for 18k and now i owe less than 10k and the stealership offered me 9500. i think it was the full race exhaust and the bigger/wider tires that drew the little kid in for the trade in value, after they offered me the 9500 i told them no thanks i'll keep the rig that keeps going, would you beleive they tried to show me into mexican made dodges and bankrupt chev's, i proceeded to tell them that if it wasn't a ford don't waste my time!

 

Interesting post. That's some good advise althought there's more than one way to skin this cat if you will.

My general rule of thumb is that I never extend my payments beyond 48 months. This is for cars, trucks, construction equipment etc. I also wait to get the lowest interest payment possible, usually 0% for cars and trucks etc. I also plan on keeping the cars and trucks for at least 60 months (5 years) so I have a "free year" if you will.
In this economy I'll be keeping our vehicles (7 in all) for a few more years. My wife and I discussed this very topic over the weekend as our Denali has 5 years on it and the F-350 will be 5 next year. She commented that I take such good care of our vehicles (due to this and other forums!!) that we can get several more years out of them. So with that in mind I'm going to do a little long term maintenance in the next few weeks (rear diff etc).

I'm not sure what you mean about it taking 10 years to break even and start getting some pay back as you'll never get even unless you can sell your truck for more than you paid for it several years later and with one exception that has never happened to me. (I bought my first car in 1972 for $1400 and sold it 2 years later because I couldn't have a car at college and there was the oil embargo going on for $1450 because it was a little 4 cylinder and got very good gas mileage for the times (only had 55 HP too!!) ).

Bottom line these trucks, if well taken care, of will give you years of service and the longer you own them the cheaper the overall costs will be.

PS. The KBB value for my truck ranges from a trade in of $27,105 to a private sale of $32,355. Not bad considering I paid about $40K for it...

 

I agree 100% with buying what you can afford. I paid a bit more than I was planning to get my '04 CC SD, but I did so because it was in absolutely like new condition. I simply cannot afford $40k for any truck. But by looking at a used vehicle, I got a loaded Lariat with everything I could want and more and I don't have to worry about the possibility of it getting totalled or stolen and me still owing $10k to the bank even after the insurance pays off. Buying a new vehicle is fun, but it gets a lot less fun when you owe more than it's worth.

 

I just paid mine off last month! wooohooo for no payments.

 

Not even close to upside down on mine. According to KBB Private party says at the good rating mine is worth at least 33K. I owe 19K on it.

 

Typically I buy my cars new, then drive them to the junk yard. Takes about 15 years...

If you keep three, having one down for maintenance causes no inconvenience and you don't need the insurance option for a substitute vehicle.

 

I also like to buy used if I can. Additionally if you're willing to consider something not quite as popular you at times can do better. I bought a Heavy Half long bed, not the most popular selection so it sat on a dealers lot for a few months. End of the month, I made an offer and they wanted to move it and it became mine. Add a few extra bucks a month and it's possible to pay off early without breaking the bank, something I've done for years. I also have 3 vehicles so again, if one is down it's not a major deal and I keep them for 15-20 years if I can. Right now I owe on 1 vehicle, bought it the end of June and KBB is about $8K over what I owe on it.

 

I have never owned a new vehicle, nor will i Probably ever. Value drops way to fast. And unless i can pay cash for the vehicle, i dont buy it

 

I guess this is why I drive 11 year old vehicles.

 

Ya, that was confusing. Rule of thumb is that if a person buys a new vehicle then they need to drive it for 10 years before the use comes in balance with the depreciation. Not sure how that number was developed. It was passed along to me from an engineer that worked for Ford.

I suppose that a person could drive a beater their whole life and save some money. I know people like that and they do it on purpose even though they don't have to. But I think it's worth some extra money to actually ENJOY what I drive and not be stranded somewhere every couple months. One thing for sure is that my wife gets the best car we have which ironically we purchased new four years ago. But I had my reasons beyond money. My wife grew up poor and I figured at least once in her life she should get to choose her own car brand new off the lot.

 

For me it doesn't matter. I will drive the truck for at least the next decade, unless forced to replace it because of catastrophic damage.

The vehicle it replaced, a 1995 F-150, was rode hard and put up wet for over 220k miles. I expect the 2007 F-250 to at least equal that, if not far surpass it.

By the time the F-150 needed to be replaced it had little book value, but I still got $3000 for it because it still looked great and still ran great.

 

I bought my 2006 f250 CC V10 4x4 lariat (39kmiles) in may of 08 for 20 grand out the door. Paid them 1 single payment (which came from my insurance co after rolling my previous truck)

at the time, Gas was 4+ a gallon. The dealer was looking to make a deal

kbb current retail is 28,850

private party lists
Excellent
$25,235

Good
$24,235

Fair
$22,885


maybe I should list it on ebay for 25 grand...

 

That has to be a nice feeling for sure! The only problem is that you would only make money if you don't intend to buy another truck in the current market.