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  • Avatar Jfleenm16 
    Participant
    Status: Resident
    Posts: 7
    Joined: 12/02/2017

    Hello all. I’m a new doc and new to the site and have a question that I think I already know the answer to, but would like some opinions and recommendations.

    I just bought a 65k truck. Paid 10k down, got 10k for my trade. Financed 50k at 4.28% (5k more after extended warranty and 5 yrs maintenance).

    I’m now regretting the decision after thinking about the 50k debt and the lost opportunity cost. I am thinking of eating the money I have already lost, selling the truck and buying a 10-15k car with cash.

    The truck would sell now for 54k and I can get most of the 5k paid on extended warranty back.

    I think that eating my loss and selling the truck would make sense, but wanted your thoughts. Just trying to make sure that I’m not missing anything before making the decision to sell. I can afford the payment, but at the point in my life I can also use more money in my nest egg.

    Thanks

    #78765 Reply
    Avatar Peds 
    Participant
    Status: Physician
    Posts: 3015
    Joined: 01/08/2016

    yup. consider it tuition in the game of learning.

    also 4.3% is terrible.

    #78767 Reply
    Liked by adventure, Zaphod
    Avatar Dicast 
    Participant
    Status: Physician
    Posts: 394
    Joined: 01/09/2016

    Maybe you have already made up your mind considering your buyer’s remorse but a little more information may help the rest of us out. What is your income range? Any other debts? Net worth?

    A 50k loan will make most people on here cringe but if you are debt free or have a significantly high income it may not matter as much in the end. You will be losing 11k in transaction costs on this deal plus the additional costs of purchasing the next car.  If you keep it you’ll have ongoing depreciation over the next few years that could be much greater than 11k.

    I would sell it if you are in any significant debt.

    Get outside of your bubble.

    #78768 Reply
    CM CM 
    Participant
    Status: Physician
    Posts: 941
    Joined: 01/14/2017
    yup. consider it tuition in the game of learning.

    Click to expand…

    Agree.

    Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried bags for Cyd Charisse (gracious). Hosted epic company parties after Friday night rehearsals.

    #78770 Reply
    Avatar Jfleenm16 
    Participant
    Status: Resident
    Posts: 7
    Joined: 12/02/2017

    Thanks for replies. A little more info about my current financial situation. Annual income now is 90k after taxes. I do have 170k school loans, but am hoping to get PSLF in 8.5 yrs and currently paying via the REPAYE. Net worth is around -160k with the school and auto loans. Cringe worthy I know, but trying to straighten things out.

    #78771 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 1613
    Joined: 01/03/2017

    You couldn’t afford the truck when you got it. I’d definitely try to reverse the extended warranty. When you go to evaluate whether it’d be better to keep the truck or sell it and get a car, make sure you include any gas mileage differences and insurance premium differences.

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #78773 Reply
    I Find This Humerus I Find This Humerus 
    Participant
    Status: Physician
    Posts: 203
    Joined: 12/02/2017

    Maybe take the 50k loan and invest it to get more than 4.3% return?

    #78774 Reply
    Avatar East coast 
    Participant
    Status: Other Professional
    Posts: 98
    Joined: 03/06/2016

    What’s your goal? Be out of debt asap and achieve financial independence asap? Sell the sucker and buy a cheap reliable used car.

    If you like the car and plan on keeping it for 100k miles, then this will likely be a rounding error in your overall financial picture across your lifetime. (This assumes you don’t make it a habit of spending $$ you don’t have). My guess is you are worried enough about it that you won’t fall into a trap of lifetime debt.

    #78775 Reply
    Avatar Kennyt7 
    Participant
    Status: Other Professional
    Posts: 42
    Joined: 01/08/2016

    Big mistake.  Buy certified Honda or Toyota and you have it for 15yrs

    learning experience

    you cannot afford this car

    #78776 Reply
    Avatar Dicast 
    Participant
    Status: Physician
    Posts: 394
    Joined: 01/09/2016

    Thanks for replies. A little more info about my current financial situation. Annual income now is 90k after taxes. I do have 170k school loans, but am hoping to get PSLF in 8.5 yrs and currently paying via the REPAYE. Net worth is around -160k with the school and auto loans. Cringe worthy I know, but trying to straighten things out.

    Click to expand…

    Sell it. Paying off 50k with 90k annual is nuts. It is a good thing you are having buyer’s remorse now and not 10 years from now.

    Maybe take the 50k loan and invest it to get more than 4.3% return?

    Click to expand…

    I think he repays the loan when he sells the car and has 9k left over. I can’t imagine the bank not wanting their money when they are holding the title.

    Get outside of your bubble.

    #78777 Reply
    Avatar wideopenspaces 
    Participant
    Status: Physician
    Posts: 905
    Joined: 01/12/2016

    A 70k vehicle on a 100k income? That’s pretty crazy to me. I’d sell. Your net worth isn’t bad but it’s going to be slow growing at that income level so I’d be shoving as much cash into retirement as possible.

    #78781 Reply
    hatton1 hatton1 
    Participant
    Status: Physician
    Posts: 2767
    Joined: 01/11/2016

    Hopefully just a momentary lack of discipline.  Sell it and plan to buy your next vehicle with cash.  If you pay with cash you can afford it.

    #78793 Reply
    ACN ACN 
    Moderator
    Status: Physician
    Posts: 490
    Joined: 01/08/2016
    Earnest refinancing bonus

    Refinance with penfed for 1.5% auto loan and keep it. You’re going to lose a lot on the depreciation of a new vehicle imo in selling it.

    If you're ever having a bad day, just remember in 1976 Ronald Wayne sold his 10% stake in Apple for $2,300.

    #78797 Reply
    The White Coat Investor The White Coat Investor 
    Keymaster
    Status: Physician
    Posts: 4077
    Joined: 05/13/2011

    Someone get Craigy in here so he can understand why I hate auto loans so much.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #78801 Reply
    Liked by Craigy, CM
    Avatar hightower 
    Participant
    Status: Physician
    Posts: 1306
    Joined: 12/07/2016

    Agree with the above. But dont beat yourself up over it. Take this as an important life lesson. Follow the WCI rule of thumb for deciding how much car you can afford and always pay cash (or pay it off in a few months). No more than 20% of your salary on a car will prevent this from happening again. That means spending up to 18k for you. You can get a very nice car for that price, but pay cash for it.

    #78804 Reply

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