So I received the magic ford email

[DrPep]

You and I may agree to disagree on the 0% being negative debt.

I didn't trade, I sold, obtained the positive equity, paid off the rest of our family consumer debt, and reduced our total debt by 27K (car)+additional 14K (consumer). The 36 they're selling will be before the additional 12-15K I deposit (that I save from paying off our consumer debt) before I take delivery in april. So yes Ill go from 27K in car +12-14K consumer to 18-20 Total. Saving me about 600/mo.

Equivalent to cashing out positive equity in your home.

I, too, am not sure I follow the math here.

Simply put, your deal is:

sell car: + $36k
pay off loan: - $27k

Total: +$9k

Then for the new car:

Down payment: $9k

New loan: $36k - $9k = $27k.

The $27k you'll be paying off over the next 60 months. It's debt even if it's at 0% APR.

If you sold the car for a higher amount, the numbers can be adjusted.

You mentioned you're saving $12-15k from paying off consumer debt. I'm not sure how you can save that amount by using your car equity, unless you are paying 200% APR on that debt right now or you will pay off in excess of the equity you're earned - but you could also do that without selling the Ranger. So any additional payoffs or investments should be left out of the equation since they can be made with or without selling the Ranger - aka ceteris paribus.

Of course, if you're happy with the deal that's all fine. But it's usually a mistake to include extraneous savings or gains to justify a financial decision. ('If only I can pay off X I could make a profit on Y.')

Did I miss something?

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[DrPep]

I, too, am not sure I follow the math here.

Simply put, your deal is:

sell car: + $36k
pay off loan: - $27k

Total: +$9k

Then for the new car:

Down payment: $9k

New loan: $36k - $9k = $27k.

The $27k you'll be paying off over the next 60 months. It's debt even if it's at 0% APR.

If you sold the car for a higher amount, the numbers can be adjusted.

You mentioned you're saving $12-15k from paying off consumer debt. I'm not sure how you can save that amount by using your car equity, unless you are paying 200% APR on that debt right now or you will pay off in excess of the equity you're earned - but you could also do that without selling the Ranger. So any additional payoffs or investments should be left out of the equation since they can be made with or without selling the Ranger - aka ceteris paribus.

Of course, if you're happy with the deal that's all fine. But it's usually a mistake to include extraneous savings or gains to justify a financial decision. ('If only I can pay off X I could make a profit on Y.')

Did I miss something?

ps. If you cash out equity in your house and use it to pay off debt, the net effect on your net worth will be zero.

 

[motormike]

2500 off a new vehicle. Caravana offering me 36. I owe 27. Only 8 months old. Would clear 9. Plus they’re offering 0% on F-150s. Thoughts? Help?!

Whatcha waiting fo?

 

[Progeny2021]

2500 off a new vehicle. Caravana offering me 36. I owe 27. Only 8 months old. Would clear 9. Plus they’re offering 0% on F-150s. Thoughts? Help?!

Most new car lots around here are nearly empty - not sure what they have to offer. Sounds like the weird situation with corporations buying up homes and various real estate and pulling them from the market. Perhaps Davos is waiting for everyone to get 'the shot'......

 

[Montana Ranger]

Every new year I check the KBB value of our cars to update our books. Usually I expect several grand in depreciation. This year, my 2019 Ranger went up over $10,000, more than I paid for it over 2 years ago! (Instead of depreciating around $2,000 as expected, our 10-year-old Subaru Outback went up $2,000)

It's nuts out there.

 

[Kemo Sabe]

You’re clearing $9k over what you owe, but not what you‘ve got into the truck total - whatever that is. You’re almost certain to end up in a bigger hole financially if you go with a F150. If you like the Ranger, keep it.

AMEN!!

 

[865RangerVol]

AMEN!!

Youre Right. Im clearing 9500. Ive got in 4500 worth of payments.. Getting rid of ~500, mo. And wiping out 10K in Additional Debt. Saving up ~10K for a down payment, 5K in incentives, and dealer is counting as a trade. So F150 will have a loan for ~20K. And those are going for 56K.

Net worth is defined as total assets-Debts. So after clearing up ~37 in Debt. and swapping it for~20K in debt, ill be +17Kish in positive Net worth. So youre right, I was wrong.

Thanks for catching my math

 

[ben8jam]

Every new year I check the KBB value of our cars to update our books. Usually I expect several grand in depreciation. This year, my 2019 Ranger went up over $10,000, more than I paid for it over 2 years ago! (Instead of depreciating around $2,000 as expected, our 10-year-old Subaru Outback went up $2,000)

It's nuts out there.

yup, me too. Paid 36k all in (taxes reg etc) for new 2019xlt 4x4 sport with elec packages and running boards plus bells and whistles. Think sticker was 45. Kbb says still 45!

granted the price of everythingis inflated so it doesn’t really matter.

 

[rphillips]

Just remember, those "too good to be true" offers are Always to benefit someone other than you. They make them sound good, that's their job, but Guaranteed they are padding their pockets while picking yours....Just my experience.

 

[Trigganometry]

My dealer is always on me to trade up. Sure looks good until you start adding taxes, registration fees, titles etc. for me that easily comes out to 3K on top of the dealer cut. Just on the face though with only the trucks value definitely looks good. This next year will be telling though, inflation is in high gear, all manufacturers are offering electric and the price wars will begin again because money will get tight again. In times like these in the past I always walked into these decisions asking my self could I handle my total monthly costs if everything went sideways for 3 months. In my present situation that answer would be yes.

 

[rphillips]

Do you think your dealer is looking out for your best interest???... You'd better re-think that !!!

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