Need opinions on financial decision....

Discussion in 'Homesteading Questions' started by farmergirl, Sep 26, 2006.

  1. farmergirl

    farmergirl Well-Known Member Supporter

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    Wasn't sure which thread to post this in, but hopefully y'all will find it okay here. We have two vehicles, both fairly new. One is a truck, one is a car. Both are financed. Hubby and I rideshare to work several days a week in the car, leaving the truck parked most of the time, though we do use it for hauling the horses and picking up feed. We have a good deal of equity in the truck, only owing about 1/2 of what it's worth. So, here's my question, would you all agree that selling the truck to pay off one auto loan and net enough in proceeds to buy outright an older, perhaps less shiny and spiffy, farm truck is a good financial decision? We're trying to eliminate some of our recurring monthly expenses and have decided we really don't need a $20,000 truck for feed runs and the occassional vet trip for the horses.
     
  2. Maura

    Maura Well-Known Member Supporter

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    Sounds like a plan. I think you want to get a truck that is new enough not to need repairs for a while, but leaving you enough money after selling & buying to have the money for said repairs. Your insurance will also go down.
     

  3. zookeeper16

    zookeeper16 Karaoke Queen

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    You can still get a darn nice truck for $10K if you are just trying to eliminate the debt.
     
  4. StatHaldol

    StatHaldol Well-Known Member

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    Sounds like a wise, well thought out decision to me. You and your husband are pretty smart... :)
     
  5. Yvonne's hubby

    Yvonne's hubby Murphy was an optimist ;) Staff Member

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    For a farm truck they wouldnt need to spend nearly that much either. I bought mine for 600, a good ol 1968 ford that needed some tires and a tranny. There are plenty of old ones around this area and I was able to land a good 4 speed for 50 bucks, a set of new tires for 300 and now I am in a durn good truck that will haul and pull just about anything I need for less than a thousand. I have been running it for 3 years doing all of the odd farm chores and its paid for itself several times over. :)
     
  6. jnap31

    jnap31 garden guy

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    YES go for an older truck and eliminate your debt
     
  7. Pink_Carnation

    Pink_Carnation Well-Known Member

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    The only thing I can think of to add into consideration is can you work on an older truck yourselves? Or do you have someone who could help you.

    That might not change anything but is worth thinking about.
     
  8. Kung

    Kung Administrator Staff Member Supporter

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    Most definitely. We sold our newer truck (2003 Dodge Ram) and got a 1995 F250 diesel. MUCH better built, gets great gas mileage, will pull a house, and will outlast many vehicles.
     
  9. Hoop

    Hoop Well-Known Member

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    I happen to think selling a fairly new vehicle and replacing it with an older vehicle is financially foolish. In the short run, yes, ones monthly payment will be reduced. But eventually, repair costs of an older vehicle may exceed monthly vehicle payments. Throwing money down a hole.

    The late model vehicles experience their greatest depreciation during its first 2 years. Of course, it depends greatly on ones ability to sell the current vehicle for absolute top dollar and buy an older vehicle that will give years of trouble free service at bottom dollar.

    Lots of "ifs" in this scenairio. Too many, in my book. Older vehicles need more repairs. Nothing runs forever.

    I happen to think you should keep the truck. If it sees low mileage usage, it will likely last 15 to 20 years. That means 5 years of payments and 10 - 15 years of NO-payments. Besides, you know exactly how the vehicle has been cared for.
     
  10. enota

    enota Well-Known Member

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    Since automobiles depreciate at an alarming rate, are you sure that you could sell the truck for what you owe on it? I seriously doubt if you are going to have an "equity". That is an almost non-existant concept when it comes to vehicles. By the time they are paid of, they are usually not worth very much, and if you still owe on yours, there is a very good chance that you owe more than it is worth (unless you put a large down payment and your payoff balance is very low).

    I do agree with the others though that it is a wise decision to buy an older truck as long as it is reliable enough to get you back and forth to where you pick up your ride. It won't do you any good, regardless of how inexpensive it is, if it leaves you stranded when you need it most.

    enota
     
  11. Beeman

    Beeman Well-Known Member

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    Is paying the bills a problem, do you need the money for other things or other debt? Paying off the car might be losing you more money than selling the car and keeping just the truck. Cars depreciate much faster and aren't as useful as a truck which you definetly need if you have horses. If money was a problem I would sell the horses first as they are usually a continuous expense that's never paid off.
     
  12. MorrisonCorner

    MorrisonCorner Mansfield, VT for 200 yrs

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    If you don't absolutely have to sell the truck (getting rid of the debt is more of a "want" than a "need") I'd economize and pay off the higher interest debt with the monthly savings and... (going against the grain here...)

    KEEP THE TRUCK

    I'm not sure what your used truck market is like but up here a used truck is Trouble. There is a reason someone sold that truck, and you won't find out what it is until it starts costing you Big Bucks. We did this twice (the used truck thing) before deciding to just suck it up and buy new... with plans to hold our new truck until we're old, gray, and the truck is a puddle of rust.

    Better the devil you know than the devil you don't.

    We also considered dumping one car in favor of the truck, but the car gets much better gas mileage, is easier to drive and park, and has covered cargo space, which the truck lacks.

    Grit teeth.. keep truck.
     
  13. SignMaker

    SignMaker Well-Known Member

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    Sell the truck! You will find that repairs are a LOT less over a 12 month span then the payments would be on a new truck. Trucks are durable(broad paintbrush alert) and will go for a long time inbetween repairs. The only downside is that repairs can cost more than the truck payment within a single month or even two. So, try to have some money set aside for repairs.

    We now have both of our vehicles paid off and the relief we feel about that is awesome. They both need repairs right now but we are able to delay them. Mine needs new shocks and my wifes left fender got hit by a guy. Everything still works great but the difference is that we can delay the repairs. Try delaying the truck payments by six months and see what happens! :)
     
  14. Alice In TX/MO

    Alice In TX/MO More dharma, less drama. Supporter

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    I'd say sell and buy used. Research carefully before you buy.

    Having two vehicle payments sucks. That money can be used better elsewhere.
     
  15. BigBoy

    BigBoy No attitude here...

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    I'm with selling and buying used.

    Here's the way I see it... Here's one scenario...
    Sell the truck for $20,000. Pay off $10000. $10000 remains.
    Buy a used one for $7000 or so. That leaves roughly $3000 cash. $3000 pays for a lot of repairs... which probably won't even be needed if you check it out well. And it would take another $10000 worth of repairs to get back to where you were in debt... that ain't happening!
    The old "used vehicles may need repairs" argument doesn't hold much water.
     
  16. FarmGoddess

    FarmGoddess Well-Known Member

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    Don't like debt, can't stand owing a bill of any kind. If all you are going to do is haul stuff and use it around the farm, and not for long trips or anything where the truck has to be 100% reliable, I'd say go for it and spend as little as possible.

    Also recommend Dave Ramsey's book "Financial Peace". The man knows his stuff. Better yet is you can find the book used. Ramsey is the only author I know who thinks it's cool when people buy his books used. :) :)
     
  17. Va. goatman

    Va. goatman Well-Known Member

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    I use a 1978 Ford F-350 every day [I have a small fence co.] Parts are cheap and if you take care of it It'll get the job done
     
  18. GrannyCarol

    GrannyCarol Well-Known Member Supporter

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    First - selling the truck would work great IF you can really get a lot more than you owe on it. Even if you only get out from under the payment, how many truck payments would it take to buy outright an older, serviceable vehicle? I'd bet not many.

    We've owned a lot of older vehicles in the last 30 years or so, some of them have seemed pretty expensive with repairs, but logically even a new engine is only $2000-$3000 and I know our car payment is about $500 a month (wanted to pay it off faster than it depreciated!) which means that a few months payment would put a new engine in.

    One thing I'd do is to research carefully the rig you are interested in buying. Consumer Reports has a lot of information on problems specific to a make/model/year and could help to steer you away from a lemon of a used truck. Some really do hold up better than others. Have a mechanic look at the truck before you buy, take it for a good test drive.

    If you are looking for a "farm truck", you don't need a fancy new truck, not even a pretty one. We had a great '53 Ford truck for many years, it worked without much trouble at all, we sold it and I think it's still tooling around the area! I have to admit that I really like old cars and old trucks, so factor that into my advice! :)

    It looks like you are getting a lot of good sensible advice on both sides, things to consider so that you can make the decision that is right for you in your circumstance. Let us know how it comes out!

    ~ Carol
     
  19. uncle Will in In.

    uncle Will in In. Well-Known Member Supporter

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    Selling it for book value may not be too easy. Dealers can do it because they lead you to believe that they are giving you a great deal on the clunker you are trading in, when in reality they just doing you a favor by getting it off your property. You took a beating money wise when you bought the truck. True, there are good running old trucks around, and some are about 30 years old.
    If you keep it, and continue to use it very little, and park in inside, you should have a sharp and shinny truck 30 years from now. Nearly all those years except the time to finish the payments will be payment free. You will know every problem that it has ever had, and you will still have the feeling of confidence in its dependability. By that time you can wax it and take it to car shows.
    Keep it, take good care of it, and you will have a new truck until horses that aren't born yet have died of old age.
     
  20. Ramblin Wreck

    Ramblin Wreck Well-Known Member Supporter

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    I'd probably sell the truck and find a good used one, but heed MorrisonCorner's warning: Find out why someone wants to sell any truck you are interested in. In 2000, I bought a 1999 Dodge truck with only 9K miles on it, but it was the son selling his Father's truck to settle the estate. It's been a great truck with no problems for over six years now, and I hope to get many more years of service out of it. Best of luck in whatever you choose to do.