Busy week here. Another one of our credit card accounts was stolen. That’s seems to be a bit more of a coincidence, doesn’t it? Time to pull our credit reports and check for identity theft! New auto loan account is fully set up, here are the details…
- Purchase Price: $12,189.50
- Down Payment: $2,000.00 (cash)
- Loan Balance: $10,189.50
- Monthly Payment: $257.29
- Interest Rate: 9.77% (I know! Read on.)
The #1 goal for 2017 is to sell 3 vehicles (2 down, 1 to go) we own (older cars), and replace with one newer (to us) reliable vehicle for DH. We also agreed on a truck vs a car, but it still needed a backseat that fit carseats. We almost bought a truck for $22,000 back in January. The experience was less than pleasant (read here), and we took a break from our vehicle search.
I am so glad we didn’t buy that first truck for $22,000!!!
Beginning of March, DH randomly came across an ad from a dealership for the same make/model truck we almost bought, just older (2007 vs 2014). It was in far better condition than the 2014 we looked at a month prior, and similar mileage.
There was one problem: the air conditioning did not work. We live in an area where this is a must during three seasons of the year. They were willing to drop the price by $200 and sell it as-is, or they’d have their repair shop fix the problem, and give a 12 month warranty on parts and labor. We chose the latter.
We could have emptied our savings account and paid cash for this vehicle. The cash price was $15,998 and some change, not including tax, tag, and title fees. However, if we financed, the price was $12,189.50 out the door! So much for “cash is king”.
That’s a $4,000+ difference once you add in the fees. Since we intend on paying this off once our old house sells (within 6 months to a year), it made sense to finance. If it takes us 12 months to pay off, we’ll pay $899.24 in interest – still a big savings from the cash price. In fact, the interest for the life of the loan is “only” $2,161.28.
The interest rate is on the higher end, because it’s solely in DH’s name. This wasn’t intentional, I planned on using my name, since I have near perfect credit. DH is in the mid-600’s due to a short sale in 2012. I had stepped out of the room to answer a phone call, and DH went ahead and had them process the paperwork with just his info. Patience is not his strong suit.
It works out though. I’ll maintain my good credit score without adding debt, and he’ll be improving his with steady payments. All in all it works out and I’m happy with the deal we got. It’s a very comfortable ride for the family, and very convenient having a truck!