Best way to finance a $17K SUV—bank loan or investment fund?

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  • #126621 Reply
    USER

      Please be nice. Our saving got basically drained in the last year and I’m needing a new vehicle bad! We’re planning to our purchase a small SUV from a friend for $17k.

      After listening to the episode on car loans, I’m wondering the best route.

      We could get a loan for 80% of the value from our bank at 8% or take it out of a non-retirement fund that has been doing well the past few years.

      I don’t want to rob our future selves but car payments feel like such a waste of money too.

      #126622 Reply
      Rachel

        If that same vehicle purchased elsewhere would cost more. I’d consider this with the loan (try CUs, first), but it also depends on how quickly you can replenish emergency fund and pay off the loan.

        #126623 Reply
        Shane

          Take out of cash account and buy it. If rates drop down to 5 range consider taking it back out and I vesting it.

          Not bad to sell at high stock values now.

          #126624 Reply
          Heather

            If you live in Colorado or another state with extra EV tax credits, go look at a lease. I just got a 2025 Nissan Leaf Plus model for 0% down, taxes, fees and $20 a month payment.

            Yes, $480 total in payments for 2 years, not per month.

            With all the gas it’ll save, it’ll be a money maker for us.

            #126625 Reply
            Jenny

              A friend leased a Tesla for $349 per month. That might be an option is the deal is still available.

              #126626 Reply
              Dave

                Selling investments in a well-performing account will not only rob you of future gains, it will hit you with capital gains tax on top of that.

                #126627 Reply
                Ashley

                  You are more in the $8000 car range at this point. You can get a toyota rav4 with about 120k miles on it and it will be reliable for at least another 100k.

                  Build up emergency savings again. And the 8% IS robbing from your future self.

                  #126628 Reply
                  Bryan

                    Cheaper car. What do you have in cash? Do you have a car to sell/trade in?

                    #126629 Reply
                    Emma

                      What did the savings account get drained by? Are these habits that are forming that are getting you into trouble?

                      17k is a lot for a car if you have a drained savings acct.

                      #126630 Reply
                      Randy

                        8% no thanks. Taking from a taxable account and realizing gains = more taxes. You should find a cheaper car.

                        Only buy what you can easily pay for.

                        #126631 Reply
                        Tony

                          You can get an older reliable Honda or Toyota for half that amount. Focus on your needs that don’t require a loan and then build up to wants when you’re in a better financial position.

                          #126632 Reply
                          Frank

                            Don’t take out 8% loans to buy vehicles if you don’t have to. But why are you fixated on that vehicle?

                            I would be spending less if you are that strapped.

                            #126633 Reply
                            Brad

                              Buy something you can pay cash for… I wouldn’t add a car payment with no savings.

                              #126634 Reply
                              Amy

                                Are you sure your bank will lend you money at 8% on a private party sale? Some banks will only lend to you if you’re purchasing through a dealer.

                                So, if all you’ve done is check rates online, you probably need to talk to someone at the bank to confirm they lend on private party auto sales.

                                #126635 Reply
                                Juliett

                                  There’s not enough information…
                                  If you have no savings, buy a cheaper car.

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