Input requested on Denali

truckguy82 · January 23, 2018

9 minutes ago, Donstar said:

There are some creative funding formulas and advice being offered! I'd like to add a spin I adopted many years ago and that was to not purchase based on monthly payments. If I need to take out a loan, it is as small as possible and short term. I find a great deal more pride in ownership with a fully paid off SLE than I would with a Denali co-owned with a financial institution. I went decades driving trucks I never fully owned. I have no regrets and fully respect those choosing or needing to pay monthly.

This is an old and outdated way of buying cars, my parents talk about how my grandfather took so much pride in never borrowing for a loan while I was shaking my head.

The better way to do it is to borrow the money for the truck, and then invest the cash you didn't spend.

Granted back when my grandfather bought cars, interest rates were likely much higher, and they didn't have the investing tools we do today. So he had a pretty good reason I suppose.

Not today though, as long as your investment surpasses the interest rate of the loan, you did well, and it's pretty damn easy to beat 1.9% return, or whatever the new car loan rate is.

Not to mention, this method of buying also likely limits most from buying expensive cars that are actually cheaper to own. Like a tesla model 3 for instance. If you have $40k laying around for a car, and you decide to buy a mercedes C class cash instead of borrowing for the model 3, you just made a bonehead financial decision since the model 3 will cost much less to own. (unless of the course the C class is really the car your heart desires, but it's likely not since your limiting yourself to what you can buy cash.

Lending is what makes the world go round, it's why our economy is so prosperous.

If you don't like the idea of co-owning with a bank, maybe you'd like the idea of using the banks money to make more money

Donstar · January 23, 2018

15 minutes ago, truckguy82 said:

This is an old and outdated way of buying cars, my parents talk about how my grandfather took so much pride in never borrowing for a loan while I was shaking my head.

Nothing old about striving to reduce debt and nothing new about monthly financing. My father leased his '68 Ford Galaxie LTD and I fully financed my '69 F100 except for the $200. trade-in credit from my '64 Econoline. I mentioned that I respect those choosing or needing to pay monthly. I also understand the reasons. I am getting older but I and my financial strategies are in fine health.

truckguy82 · January 23, 2018

37 minutes ago, Donstar said:

Nothing old about striving to reduce debt and nothing new about monthly financing. My father leased his '68 Ford Galaxie LTD and I fully financed my '69 F100 except for the $200. trade-in credit from my '64 Econoline. I mentioned that I respect those choosing or needing to pay monthly. I also understand the reasons. I am getting older but I and my financial strategies are in fine health.

If you have 40k and you buy a 40k car cash, you have 0k and a 40k asset. End result, you still have 40k

if you have 40k and you take out a 40k loan for a new 40k car. You have 40k cash, 40k debt, and a 40k asset. End result, you still have 40k

Taking out a loan does not make you go into the red. Debt is a powerful tool, and nearly every single wealthy person and entity in the last 100 years has extensively used dept (aka other peoples money) to get rich.

no issues with what you do, just want to make sure you understand the only reason people have a negative association with “debt” it can also be used to buy what one cannot afford. If you dont do that, take all the loans you can get.

GRN69CHV · January 24, 2018

I was just throwing $40k out there as a benchmark, probably looking more at $36-37. MRC interests me on the Denali. I looked at Laura GMC site, will look again. Wife doesn't want me to buy anything, maybe she's right.

As far as borrowing, I get a 2.69% rate from my credit union. So, I'm not going to put a lot of cash down, doesn't make a lot of sense to dump cash on a depreciating asset. Another reason I am looking at one owner trades like the '15 Denali I am considering is it a Certified vehicle with the 6 year 100K extended warranty. This will only be a personal use vehicle that will see maybe 3000-4000 miles per year. My truck has been washed and parked in the garage since December 1st. One I just looked at has 32K on it, and is immaculate. Deal that we're talking about is they take my '15 DC LT on a trade, they actually buy it out and pay off the mileage penalties, we're not completely to where I want to be but getting closer. We'll see, lot depends on how far I can squeeze them to make a deal in my favor.

O_J_Simpson · January 24, 2018

Save yourself some money. Buy a new 6.2 SLT.

GRN69CHV · January 24, 2018

14 hours ago, Donstar said:

There are some creative funding formulas and advice being offered! I'd like to add a spin I adopted many years ago and that was to not purchase based on monthly payments. If I need to take out a loan, it is as small as possible and short term. I find a great deal more pride in ownership with a fully paid off SLE than I would with a Denali co-owned with a financial institution. I went decades driving trucks I never fully owned. I have no regrets and fully respect those choosing or needing to pay monthly.

I'm with you on the payments deal. I am very frugal, I do know people that have $1000/mo car payments, but think that's just insane. I can easily afford that but would never even commit to something like that.

Dnt · January 28, 2018

Since we got off on this side bar we might as well dig in deep. I found this little gem of a financial book back several years ago "The Millionaire Next Door" by Thomas J Stanley and believe me it is pretty dog eared with numerous notes in the margins. A couple of chapters in this book deal specifically with used car buying. One fascinating tidbit from the book is a simple test to see if you are on track to be wealthy or are you already there. Here is the Formula: Multiply your current age times your realized pretax annual household income from all sources except inheritances. Divide by Ten. This amount, less any inherited wealth, is what your current net worth should be......

If you are a bit behind on your "Net Worth" amount you might want to closely examine a future destroying financial decision to waste money on a depreciating asset like a truck. (aka Liability) If you are well ahead on your Net Worth calculation, well shoot man spend away like crazy it will not hurt you much...... MONEY TO BURN

Stepping down off my soap box now, sorry for the rant, man I feel better now. Planning for a 2019 maybe a Black one this time.

aseibel · February 2, 2018

On 1/23/2018 at 3:22 PM, truckguy82 said:

The better way to do it is to borrow the money for the truck, and then invest the cash you didn't spend.

Lending is what makes the world go round, it's why our economy is so prosperous.

If you can make the numbers work, that's great. Example: 1 year ago we bought a used 2015 Terrain and borrowed 20,000 at 1.99% interest for 36 months. We had money in the bank to pay for it in cash, but we are getting 3% interest on up to 30k in our checking accounts. So instead we are only making the minimum payments. So YES, it is possible to make more money on the savings than we are paying on the interest. But not all are that lucky.

Its hard to get a guaranteed return of 2% or better right now. If you have a way to make more money on your investments than you are paying GM financial for the privilege of borrowing money, go for it. I'm just afraid that the average consumer can't secure favorable enough loan rates and end up paying out the @$$ for interest on their 40,000 truck loan. But I don't really know what terms the average denali owner is paying. maybe that should be a poll question.

truckguy82 · February 2, 2018

On 1/24/2018 at 6:48 AM, GRN69CHV said:

I'm with you on the payments deal. I am very frugal, I do know people that have $1000/mo car payments, but think that's just insane. I can easily afford that but would never even commit to something like that.

Yeah but the loan payment itself is not important. Most of that money goes back into the equity on the vehicle. So what really matters is the value of the asset, not the payment.

If you decide to buy a new buggati chiron, and you loan payment is $20k/month, but the car doesn’t depreciate, you are only losing money on interest and maintenance. Infact the chiron will likely appreciate, gaining you money.

it’s possible to literally have a 50 car collection that costs you nothing if you buy the right cars.

Moral of the story - never ever look at monthly payments, it’s exactly what’s wrong with most of the american public and why they are always poor. It’s what manufacturers prey on. Always figure out how the vehicle effects your net worth in the end, aka the real cost.

as long as you go through life calculating how every purchase effects your net worth, you pretty much can’t be poor.

Perfect example of manufacturers tricking the american public....

You see an advertisement......0% interest or $3k cash back! Many of you would be like awww man 0% interest great. You would be paying $3k more for the vehicle to get 0% interest!!! There’s your interest right there, it’s literally no different than making an interest payment for several years. But if you actually viewed everything as how it effects your net worth, you are not fooled by this tactic. You would shop for other lenders, which may not be 0%, but you could figure out how much interest you are paying with that loan and see what’s cheaper, the interest or the $3k.

GRN69CHV · February 3, 2018

Moot point, I did look at the truck real well, was very clean. Didn't move on it, it sold. No big deal, there's always another. Might just end up buying mine out and putting a leather interior in it.