Trade in my 2019 for a 2021?

It’s effectively the same truck, I wouldn’t change unless you were going with a different cab style or drivetrain. Wait for the 22.

 

Now, that's what I like: a practical illustration!

 

Yes, a true gold star. Well played.

 

I always tell people to pay their mortgages off weekly if possible. Take your monthy payment and divide it by 4.

Over the course of a 20-25y mortgage, it reduces your interest by a whack as it comes off the principal earlier every payment.

You can save enough to buy a Tundra with your interest saved

 

Huh? Why on earth would you make higher payments to pay off a 0% loan earlier (unless for some sort of credit reason, but it’s doubtful one would qualify for 0% if credit was an issue anyhow).

 

Funny, the 2005 Double Cab SR5 I recently purchased is my retirement truck too...

 

No credit issues, I'm looking at a 818 credit score..
My loan from Toyota for my 2005 and 2014 were both 0% interest.
My credit wasn't that good in 2004, I was surprised I got 0% back then.

I paid more a month to get it over with and reduce the term.
Be done with it.
I didn't like having a car payment.
Budgeting $45 more to $600 was a nice round number, I like round numbers.

I was funny when I did my online payment.
After awhile it read I had a reduced, or eventually no, monthly amount due per month.
If something were to happen; illness, job loss, whatever, I'd be paid up and be able to skip, or pay the reduced, payment if needed.

I'd rather pay off the the loan early and put that $600 an month in savings or other expenditures..

 

I'd still be driving my 2005 DC SR5 if NTB wouldn't have screwed up the front end.

 

you always want to pay more than the monthly for a variety of reasons.

the main being a possible mistake down the line in the last few months where a payment can be missed and you're on the hook for a balloon interest payment.

always pay attention to the actions of those with excellent credit (obviously like an 818). it is no accident that they are paying off debt in an early fashion, even on a 0% for 60mo term.

 

827 credit here, so yes, I do have a basic understanding of credit and finances.

By taking extra of your own money to pay off a 0% loan off early, you are costing yourself interest gained....... which is basically like paying interest on a 0% loan.

If someone just doesn’t like having payments, I totally get it. I would rather save / have that additional money in my account vs. someone else’s, and pay it off with a lump sum. If you are only shaving a couple months off over the course of the loan, then I don’t see the logic.

 

First, let me preface this with the statement that "it's your money, do whatever you feel is within your comfort zone and is in line with your financial goals".

That said, take the smoke and mirrors aspect out of this. Who care if it's zero down? That doesn't tell you anything.

1. How long is your current loan?
2. How much have you paid in vs. value of the truck?
3. What is the actual price difference between what you are trading and what you are getting?
4. How does that price difference jive with current market values on each?

 

Everyone has their own preferences.

Sometimes payments make one end up buying more things, because it's just a payment. There are many 0% financing to get us all distracted in the materialism. Finance the truck, how about a TRX, a boat, jet skis, sports cars, 8k OLED TV, HiFi, $2k phones, laptops, top appliances, home remodeling etc.

Then the income disappears...

 

its strange that someone with your credit score wouldnt see the logic.

there are several reasons to pay off a 0% interest loan early, those include:

1) positively impact your credit score. each open item on your credit impacts your overall score, the thought process that car payments increase your score because of their repetitive nature are only valid for those who are rebuilding their credit scores.

2) paying off debt can free up cash in the future which everyone should be focused on with a possible biden/harris presidency on the horizon.

3) the risk/reward of a 0% interest loan are great. if you miss a payment, that rate can immediately go up, possibly including late payment fees added onto the balance due. this is how people receive a balloon interest payment their last couple months of the loan. they arent expecting these charges and their auto loan was only scheduled to pull 60 static monthly payments on their loan.

the reason why 0% interest loans are offered to people with good credit is because they usually know the risks and pay off their creditors early, not on time. the interest youd accrue on an extra $50 or even $100 per mo sitting in your savings account is negligible, greatly outweighed by a more fiscally sound future.

 

Looks like you are driving a lot, I would never take out a 7 year auto loan. If you average 30k per year, you would have more than 250k on your truck when its paid off. Even a Tundra will probably need some costly repairs in that span.
Also, not sure what registration expenses are where you live, but that is what keeps me from buying a new vehicle every few years.
Take that $10 a month and pay off your truck or credit card debt

 

It is a total trap to not payoff a 0% loan early. You want out of debt as fast a possible. The future is always less certain than the present. Better to hedge against unforeseen stuff by being as debt free as possible IMO

 

0% financing is like free food*

 

1. Not true. Pay off all your loans and see what happens to your credit. Lots of factors in credit utilization.

I know for me personally, my credit was stuck in the low 800’s when I had my first house paid for and no vehicle payments. Wasn’t until a new mortgage and truck payment that it moved upward again.

Reoccurring and steady payments does indeed help those with low credit more than folks with high credit, but it does helps those with high credit as well.

2. If you are concerned about the future, then why are you taking additional money out of your account to pay a 0% loan vs. stockpiling that money and paying it off early lump sum?

I totally understand the appeal of folks not wanting to have debt on their books, or just not wanting payments in general. I did exactly that for long time.

What I am not understanding is the logic behind paying it off early by making small monthly additional amount vs. saving that money in your own account and paying it off early via a lump sum. This would allow you much more financial freedom / power / opportunity to have a larger sum of money sitting in your own bank account to use for any emergency if you are concerned with the future.

3. Paying the loan off early via a lump sum eliminates any end of note cases. And with autodrafts / online banking there is next to no risk of missing payments anyhow.

Anyhow, will stop dumping in this thread. Genuinely do appreciate the civil discussion, and respect the differing opinions! Cheers all, and happy holidays!

 

TANSTAAFL

 

I just wanted to say welcome to forum, and the 1st gen community.

I think that you WIN as far as best name on the forum. I love MXC!


enough of this now.
continue discussion.

 

Personally I will not pay extra on a 0% loan, it is better to save that money or apply it to anything with interest. I really only have 2 payments. My house, which is 2.25%. And my truck, which is 0%. I pay extra on the mortgage every month, and put more money into my retirement account.

 

Half agree, yes i was assuming not having other non mortgage debt

 

All good points.

When there is interest, there is a greater chance of a person paying it off quicker, thus less interest made.

When there is zero interest, there is a greater chance of a person not paying it off quicker, but a greater chance of buying more.

In the end, it’s all down to the individual’s situation. What might work for someone, may not work for others.

 

How did they manage that? Looks like a LBJ failure.

 

Started out as buying a set of tires from them.
Ended up as they didn't put the cotter pin in the spindle nut that goes into the LCA...

Well that doesn't make any sense does it?

Post #11 in this thread explains it.

Tail gate key for 2006 - won't lock - fixed now | Toyota Tundra Forum (tundras.com)

 

If you need a tax write off and can find a way-I would say go for it. But if you don’t need a write off then it’s a lot of extra debt to take on and only gain 2 years.

 

I dont see how Leveraging cheap (free in this case) credit is a trap. The bank is letting you play with their money for free. Use your saved interest and principal to do something else beneficial you couldnt have afforded to do otherwise. Put that money into your 401k or IRA.

 

I don't like owing anyone money, be it 0% interest or not.
I understand what you are saying, but that is my preference.

Getting two 0% auto loans from Toyota Financial was a bonus.
They were part of available incentives when I bought the trucks.

Not sure why I got 0% interest in October of 2004 on my 2005 DC.
I went to the dealer to look at used Tundra and they said they could get me in a new one cheaper and they did.

0% was part of the incentives when I bought my 2014 in December of 2014.
I would have financed the vehicles with my credit union or State Farm and got a better interest than the dealer offered if not for the 0%.
And I would have over paid that loan as well, although in your view that would have been OK.

In my situation, I'd rather be ahead on my 0% interest loan.
If I were to get injured, sick, fired, or have to expectedly take off work for any reason, I'd rather have the minimal amount of monthly obligated debt payments.
Makes no sense to start spending my savings to pay monthly bills, when the monthly bill expenditure could have already been paid off.

I can only put a certain percentage of my income in my 401K and my employer doesn't match any of it.
Sure I could open another Roth or whatever, but I don't want any more debt than I have to have.
Only monthly debt I have now in my mortgage, other than utility bills.

I'd rather not owe anyone anything than have a monthly obligation hanging over my head..
When you get to be up close to 60 years of age, any debt that isn't necessary, isn't wanted...

One less outstanding debt, or monthly payment, also is one less headache my wife has to deal with if I were to kick the bucket unexpectedly.

Neither one of us is right or wrong.
We just have different mindsets about money..

BTW, welcome to the forum..

 

debt is a trap. Cheap interest just incentivizes one to spend more.

 

The one thing to be aware of is often you can either get a discount if you finance at the "standard rate" or pay full price and get 0%. Have to do the math to see which ends up being the cheaper option, also taking into account whether you're likely to put extra money towards it and pay it off early or not.

 

Toyota offers 0% interest when the model changes occur, usually this is 7years (currently 8 on the 3rd gen) so my guess would be it will be offered soon to clear inventory for the gen 4 22's. This is also usually a 36 month term (which I think is perfect). 3years and done with not a wasted penny. To the OP I would say wait for that if you were going to do anything, otherwise it's financial stupidity for the voodoo.

I had 0% on my 06' and when I looked at the odometer, it said 38k and I just sent the last payment. 10 years without a payment later I traded it for a 1.9% on a 17' I put down what I needed to get the payment to $500/month, then I would pay $1000 a month to the truck... $500 to Toyota and $500 to me. I had enough to pay it off in 2.5years but it was right before Covid. I needed to use some of that money and I'm sure glad I had it. After I settled into the shutdown I ended up paying it off to consolidate the monthly burden with limited income. I have not been able to work since March and if I didn't pay double when I could, I would be in a much worse situation.
I hate debt, but I hate finance charges even more.

Good habits start with the smallest things like the golden rule when you get your paycheck is:

1. Pay yourself first.
For those who are in debt, this means to put money into savings first, like you never had it in the first place. Consider what is left is what you have for all expenses.
If you don't do it from the start, you most likely never will save a penny.


7 years of truck payments and finance charges is how NOT to get ahead. I've hit 848 on FICO btw