Trade in *mint* 2015 CPO for higher mileage 2014 ?

ktm525 said:

Trade $ will be much lower than you think. Why not just wrap the white one? Interior colour the same?

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lol

Frank8 said:

I only used ATT as an example. There are many very conservative stocks/mutual/ETFs that have good yields.

But keep in mind that 1.8% is very cheap money. Interest rates are going up and you’ll not likely ever get a loan at that rate again.

The only way you’re gonna come out of a trade with a *** of cash is if you wind up with a vehicle that is worth a lot less and you’ve taken the difference in cash.

That *** of cash is going to be very expensive money since you’ve given up the equivalent amount in vehicle equity.

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Hey hey, my ETP swing trade idea is up 2% just today LOL any pullback to 19 i'm buying long term call options and shares. Maybe Trump can tweet he doesn't like the China trade deal or something to dip the market this week.

backcountryLR4 said:

Some additional background:

I may be widely over-estimating the value of my current vehicle, and have not yet taken it in to see what they would offer.

I have however looked at every CPO LR4 for sale across the country. The 15s and 16s with my same options are listed from 59k-68k. Try finding a Lux HD package blackpack with the Land Rover manufacturer warranty right now. Of the ~200 CPOs available right now, we are talking single digits that meet the same criteria (found 4). (again, from my research... still could be way off)

From regular pre-owned vs CPO, seems like I am seeing around 6-7K value there for the CPO.

So my rough math of ~36k owed and (hopefully) ~56k trade-in and a ~36k purchase price(listed at 39k) puts me closer to the $16k cash out of pocket to buy the other car with no loan.

I may be crazy...

I have to drive past the dealer to get to the airport tomorrow and may see what they say, but there is no way I think my current vehicle would be worth less than $50k. (have 65k miles and 4 years left on bumper to bumper, transferable manufacturer's warranty.) I am curious @jwest if the ones you saw on auto trader had that? If not, that would match what I saw on Landrover.com of the difference between vehicles with no warranty vs ones with the warranty. (difference of about $6-7k)

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For a private buyer, that warranty is worth a lot IMO. However, any dealer will tell you eveything you think is extra isn't really much, but then they'll advertise it and pump the next buyer saying "ooh ah" about the warranty, low miles, etc, etc. If I were you, I'd step back to at least 2013 or whatever allows you to walk with no more loan.

These things to me are not just about % rates but more about cash flow and liquidity in times when we have trade war BS, and a lot of other uncertainties - regardless of political affiliation, one cannot argue the volatility we have now. Home pricing is on the rise but wouldn't it be nice to be super cash ready if there's a big ole dip or have zero worries about a rough patch?

I'm making some assumptions here but also based on my own choices in the past. Had I not been stretched with 3 car loans in 2008, I could've made an absolute killing simply buying index funds or a house, etc. My business did well so I didn't really experience a change in lifestyle, but nor did I grasp what I'd missed out on until it was too late.

I realize I've gotten a bit preachy here.... hope it's taken as me only trying to bring some good to you all

Yeah, I'm a newb, but I can't help but throw my thought in here. I'm 4 months into my first LR...a 2013 LR4. Want to know why? I had a brand new 2014 F-150 XLT with about 32k miles on it in 2017. I had a 2009 Lariat in the past and couldn't get over how much more tech was in that vs the 2014 XLT. There were no issues with my 2014 but I lusted for more stuff. I found a 2012 Platinum (had every feature in the world) and did a level trade for it with an extended warranty on it. 9 months into having the 2012 it was in the shop for nearly a month while they tried to fix all the various issues that popped up that were probably originating with the prior owner which is why they traded it in. After fighting with over warranty coverage and not having my truck for a month and in and out of shops I took it over to the local LR dealer and traded it for my 2013 LR4 HSE that had 25k miles on it. I had payments on the truck and now I have payments on the LR. I lost money, time, and probably life (screaming at Ford warranty/dealership stuff) because I wanted something different but yet the same as what I effectively had.


Morale of the story? You have a payment now. You signed up for that payment. Unless you can't make the payment anymore, stick with the devil you know rather than the one you don't.

I will never "trade down" to "change" again - sell what you have outright to private party if you want and then go shopping for what you need if you really have that itch.

Interested in selling privately? I could be interested if it has the right options.

TheWidup said:

Morale of the story? You have a payment now. You signed up for that payment. Unless you can't make the payment anymore, stick with the devil you know rather than the one you don't.

I will never "trade down" to "change" again - sell what you have outright to private party if you want and then go shopping for what you need if you really have that itch.

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I can see your reasoning for your choices but not being able to make a payment is not the same as deciding money is better utilized elsewhere, especially on something that is losing value every day you wait.

Trading, up or "down" is irrelevant, it's the trade deal itself that matters and usually it's not very good on vehicles you have only had a short time and/or are not very far into their depreciation curve. Having a very good relationship with a dealer can make a huge difference because they may want to work harder to keep you as a long term repeat customer.

High dollar loans on crappy interest rates can be well worth getting out of more quickly than being stingy on trade or sale dollars simply due to the monthly cost to maintain the loan interest - again, on a thing losing value each month that lingers on.

The other thing here is that if a person "trades down", significantly enough in dollar amount, the net savings over several years can be huge.

Even from a depreciation aspect, consider paying off a $60k loan and then selling the vehicle for $20k in 10 yrs. Net loss quick math is $40k

Alternatively, trade down to a 30k vehicle (loan or cash irrelevant) and take a 10k loss on the trade. In 10 yrs sell that one for 15k (assuming it was also worth 60k at some point it will depreciate less % now from used purchase price). Total loss is $25k vs 40k = 15k less spent over the time period even including 10k hit on the trade. Even if you can only get 10k on resale, you're still ahead 10k.

Basically in this scenario example, the 2nd cheaper vehicle would have to go to zero to be same loss over time.

For my RRSC switch to LR3, the math was not even my main reason though it was hard to ignore the idea of paying off a 96k loan vs a 55k loan. Taking only a 6k loss on the RRSC made it too easy though.

You can also factor in cost of loan. The difference in cost to service same % on twice as much $ is often a surprise over a 3-4 yr loan. Newer vehicles cost more to insure as well but new enough may include a warranty. Old enough and you save so much you should be able to fund your own warranty though.

Warranties are a commitment to give away $ on it's cost while gambling that it will save you more than it's cost plus loss of using that same $ over coverage time period.

Of course somewhere in there is the right balance for different people. I sort of enjoy these theoretical equations because I've had so many vehicles over the last 15 yrs

Right now late lr3's or early lr4's are the best value IMO. It's almost laughable to consider buying a newer lr4 for 40k+ and thus committing to a 25k loss over next several yrs. I would rather put 10-20k into building out a cheaper lr3/4. This is of course after having put over 80k into mine by buying new and immediately building it out though - LOL

Your points are valid and solid no one will rebut them however the factor you're leaving out is that most people will not have cash in hand after they trade-down, they will just have a vehicle without a lien/loan. At that point they would have to then pay themselves the same amount of money they were paying on the loan into an account where they can reach a decent amount of money to start investing with and creating passive income. In addition most people will not be active enough to manage that account once they have money for investments and some people just don't want the risk or headache. Lastly, there is a group of people who will find new ways to waste money, if they don't have a loan they will find another window to throw their money out of.

If I may add one final comment... Investing into any of the markets now with new money is probably the absolute worst time to start. All signs point to a major correction in the near future and my bets have been on something similar of the "great recession" but this time around a bit longer. My advice would be hoard cash until there is maximum pessimism then start dumping money into bricks, blocks and stocks but without knowing one's personal objectives, risk tolerance or being paid for advice I will refrain from stating anything more on the topic.

Another way to consider it regardless of economy:

A. if markets continue upward without a truly major correction, I'd rather have money earning money than committed to a loan for something that is more than what I need.

B. if markets do correct for realz, best to not be stuck in any loan not absolutely necessary.

C. I don't think "all" signs point to your idea but yes some do. The world is not what it used to be so I also think these signs will not necessarily mean what they used to mean but I agree, most people will not be able to actively and effectively manage the moves anyway.

D. instantly finding a new way to waste money was one of the longest and hardest bad habits for me to break