New Truck - Loan APR

[pickardjw]

I have about $8k left on my truck loan with WECU. Blue Book is around $24k trade in value.

I really want to move to a crew cab regular bed with a cap so I can build a little sleeper setup. Something under the $30k mark probably. Dilemma is I have a 3.24% rate on my current loan and new rates are at least double that. Is there anyway to keep my rate if I trade in?

[jrebel]

No, generally speaking, the only way to keep your rate down is shorter term with lots of cash down.  Banks are not going to loan below going rates, it doesn't make financial sense for them.   

[phildobaggins]

I have about $8k left on my truck loan with WECU. Blue Book is around $24k trade in value.

I really want to move to a crew cab regular bed with a cap so I can build a little sleeper setup. Something under the $30k mark probably. Dilemma is I have a 3.24% rate on my current loan and new rates are at least double that. Is there anyway to keep my rate if I trade in?

Sorry bruv, I'm in a similar boat with the 4Runner I don't really want anymore. Won't get a rate anywhere near that for used. Best bet for a low rate is a brand spankin' new something and financing with the OEM program when there is a special offer. I worked at a dealership for 8 years.

[jrebel]

I would also add, Selling outright and not trading in appears to be the way to go right now.  Used vehicle prices are still very high.  I do like to the trade option to reduce the taxes....but with used prices now days, its hard to not to just sell them.  If your trade in value is 24K, I would have to assume your sell price is close to 30K. 

[phildobaggins]

and I will also add, you won't get KBB trade in from the dealer lmfao. They will find a way to say it's not in "good" condition one way or another, usually.

[pickardjw]

Yeah I leveraged a Carmax quote last time I traded in, got me an extra grand. Only have the one vehicle so I can't sell and wait for used prices to come down.

I was looking at a Trail Boss but not sure I want a $25k-$30k auto loan in my life, at any APR used or new.

Not trying to dump any cash into a new vehicle now either, gotta but a house at some point...

[Caseyd]

If the dealer is a KBB member they have to honor the Instant Cash Offer provided by the tool.

Some salespeople hate that one.

[pickardjw]

How about really short term? Not sure if banks/credit unions will do them, but say 24mo term. I can afford $500/mo. Not sure how well these online calculators work, but if I keep the principal below $12k on a 24mo term I'm looking at less than a grand in interest...

[KFhunter]

Do not buy a truck right now, here’s why

This is a 95k truck a few years ago at 3.9% rates



The amount you pay the bank is roughly $10k for the loan

[KFhunter]

At today’s rates with good credit, look at your payments now, and how much the bank gets

[KFhunter]

Now check out how big your down payment has to be to get that back down to $10k the bank gets, and your total cost of the truck after financing

[luvmystang67]

If it helps you think about it differently at all... the REAL amount you're paying the bank is the rate, minus inflation.

When you acquired your last truck loan, inflation was pretty steady at 2% per year, so a 4% loan means the bank actually "gets" 2% money. 

Inflation now is... what? Call it 6%.  So an 8% loan still gets them the same net 2%.

Don't believe in inflation?  I'll borrow money from you at 4% right now, and you'll lose in 5 years if we don't get inflation under control.

Point is, banks deal with what they have, you cannot expect to get a loan for less than inflation.  Inflation is real, and the actual cost to you is the net of inflation an interest rate.

If you can afford the monthly payment, then live your life.  However, I do expect prices on EVERYTHING people finance to drop if rates stay high for the very reason spelled out in this thread.  People hate paying interest, and it'll drive down the demand and price for the underlying asset (housing, cars, etc).

[luvmystang67]

Also, another fun way to think about debt is how much you're winning by right now.

Interest on borrowed money at 3.5% when inflation is at 6%... you're paying them back with deflated dollars.  They're paying off your truck for you because your loan turned out to be a pretty bad bet for them.  It may not feel like it, but you're paying back less than you borrowed in terms of real value.  Now your truck is also depreciating, but that is a separate issue.

[pickardjw]

Also, another fun way to think about debt is how much you're winning by right now.

Interest on borrowed money at 3.5% when inflation is at 6%... you're paying them back with deflated dollars.  They're paying off your truck for you because your loan turned out to be a pretty bad bet for them.  It may not feel like it, but you're paying back less than you borrowed in terms of real value.  Now your truck is also depreciating, but that is a separate issue.

That is a fun way to think about it! I'm just gonna hate pitching a tent next to my truck all scouting and hunting season. I've already skipped a couple overnights because I didn't want to deal with it.

[phildobaggins]

If the dealer is a KBB member they have to honor the Instant Cash Offer provided by the tool.

Some salespeople hate that one.

They have a way out though, "the vehicle is not in as good of shape as you described it as in your submission"