"A BRONCO IS A BRONCO" - Buying a new Bronco, making payments, and affordability!

[Roger123]

Good discussion. I feel that you make different decisions when it's your money on the line and not someone else's too. Writing a check really makes me think about what I'm doing. For me taking debt off the table has changed the way I think about many things.

In my life doing what my gut says has allowed the math work out.

Now can I just an email telling me that they're building my damn Bronco!!!

Sponsored

 

[North7]

Good discussion. I feel that you make different decisions when it's your money on the line and not someone else's too. Writing a check really makes me think about what I'm doing. For me taking debt off the table has changed the way I think about many things.

In my life doing what my gut says has allowed the math work out.

Now can I just an email telling me that they're building my damn Bronco!!!

100% agree!

I love the car dealers now sending emails saying "It's time to "Upgrade" your car" with a 202x model, like upgrading your car is just like upgrading you cell phone.

The sad thing is, there are a lot of gullible people in this world that fall for this ploy. Financial Literacy should be a required course in schools, at all ages.

 

[Pancho Kornwallace]

100% agree!

I love the car dealers now sending emails saying "It's time to "Upgrade" your car" with a 202x model, like upgrading your car is just like upgrading you cell phone.

The sad thing is, there are a lot of gullible people in this world that fall for this ploy. Financial Literacy should be a required course in schools, at all ages.

For many, the cell phone family payment cost them more than a used car. So I think it applies for that industry as well.

 

[Pancho Kornwallace]

My simple financial mantra:
"A penny saved is not just a penny earned. A penny saved is TWO pennies earned."

This is the actual math when you factor in the cost of maintaining a job (you might make $50/hour, but when you factor in the cost of making that money, like needing a car, a mortgage on a house close to work, clothing etc, and the taxes etc, it is more like $35/hour) and the value of compounding/investing the money.

Think to yourself, "if I can save this $1000, it will be worth $2000 someday." Do this, and your 401K will look reasonable when you are in your 50s, like is should, in an era where we no longer have pensions for most people.

What makes the Bronco interesting is if you use it as a daily driver. If so, you are offsetting the cost of the other vehicle you would be driving. The "cost" is the incremental cost, v. the vehicle that you would be driving.

That is why I am getting a Base Bronco, and I am redoing the Kitchen (which will have more positive impact on house resale than getting a Bronco Wildtrack will have on Bronco resale). I am trying really hard to keep the monthly payment close to what I would have for an average car.

 

[North7]

I've seen a number of posts that people say something like, if the base model is $x.xx cheaper I can afford it. In fact, that is the complete definition that you cannot afford if you are stretched that thin.

The financial decisions you make early in life will set the trajectory of your entire life. In this first example below, a 25 year old started saving $500 per month, by retirement age they will have $1.52M with an average stock market return of 7% (with the money sitting is a broad based market ETF, such as VTI, https://investor.vanguard.com/etf/profile/VTI).

The second person waited until age 35 to start saving for retirement with the same inflation reduced $500 per month. Due to this later start at serious, responsible, savings, the second person will only have half as much as the smart 25 year old, $714K, with an average stock market return of 7% that is $807K less.

The future quality of life for your family, your children your emergency savings and your retirement are based on the choices you make early in life. Save vs Toys, the choice is yours, if you able to afford both, that is wonderful, but make sure you really can and it is just not a toy you feel you must have when lower cost transportation may be the more responsible choice at this stage of your life.

Investment Calulator

 

[Hoofnmouth]

I've seen a number of posts that people say something like, if the base model is $x.xx cheaper I can afford it. In fact, that is the complete definition that you cannot afford if you are stretched that thin.

The financial decisions you make early in life will set the trajectory of your entire life. In this first example below, a 25 year old started saving $500 per month, by retirement age they will have $1.52M with an average stock market return of 7% (with the money sitting is a broad based market ETF, such as VTI, https://investor.vanguard.com/etf/profile/VTI).

The second person waited until age 35 to start saving for retirement with the same inflation reduced $500 per month. Due to this later start at serious, responsible, savings, the second person will only have half as much as the smart 25 year old, $714K, with an average stock market return of 7% that is $807K less.

The future quality of life for your family, your children your emergency savings and your retirement are based on the choices you make early in life. Save vs Toys, the choice is yours, if you able to afford both, that is wonderful, but make sure you really can and it is just not a toy you feel you must have when lower cost transportation may be the more responsible choice at this stage of your life.

Investment Calulator

Oh boy thats a tough one save vs toys it takes a special person to sit and watch everyone having fun and you sit there saving.
I see the point though dont over extend is good advice but sometimes you just gotta say what the f#@k.

 

[North7]

Oh boy thats a tough one save vs toys it takes a special person to sit and watch everyone having fun and you sit there saving.
I see the point though dont over extend is good advice but sometimes you just gotta say what the f#@k.

Of course, everyone's personal decisions are what is important, but just remember, how far do you want to undershoot future savings, $807K less?

All those other things, your correct, home ownership is over rated, family vacations and emergency funds, who needs them, the kids can always go to community college, no worries. Then again, maybe Walmart will start hiring door greeters again by the time you are in your golden years.

 

[Hoofnmouth]

Of course, everyone's personal decisions are what is important, but just remember, how far do you want to undershoot future savings, $807K less?

All those other things, your correct, home ownership is over rated, family vacations and emergency funds, who needs them, the kids can always go to community college, no worries. Then again, maybe Walmart will start hiring door greeters again by the time you are in your golden years.

Or make the decision to not have kids and eat steak every night?

 

[elnorte]

No, I’m not actually asking you to post how much you can afford. This is not a competition.

As someone who is involved in some other hobbies that can get pretty expensive if you’re not careful, and given the fact that this vehicle generally caters to a younger demographic, I just wanted to share some information and suggest that before you place your order...

Take a good, hard look at your financial situation before you over extend yourself on a vehicle with a ton of upgrades and features.

I’m only writing this because I want nothing more than a bunch of lifelong, happy bronco owners. So I figured I’d just lay out a few points to consider for those who may not have a lot of experience with car loans.

• The easiest way to reduce your risk is to increase your down payment or lower the total vehicle cost. Monthly payment numbers are not a measure of cost. Extending your monthly payment over time does not save you money, and it may actually hurt you if you need to sell (see “under water” section below.
• The bronco being new and exciting does not make it a good purchase decision. If you wouldn’t buy a brand new vehicle anyway, you should examine your expenses.
• Do not buy a higher trim with the intent of recouping increased resale value. The depreciation percentage is likely to be higher on more expensive models, and either way, this is a big gamble. Buy the features that make sense for YOU, not what you THINK the market wants.
• Lower trim levels with upgrades over time are a smarter financial decision for most people. Sure you might save a few bucks if you need everything in a certain package, but not being locked into those costs as part of a loan is a major advantage and far more important when it comes to selling early.
• Tax is NOT included in the purchase price of the builder. On a $40K car, this can add $3000 in certain states! Generally, you pay the tax of the state you live in, not the state you are buying from.
• Insurance premiums on a new vehicle can be significantly higher than an old vehicle. Run some quotes on your vehicle (or a similar one) before ordering.
• If you have a sizable cost of the bronco tied up in the loan and you need to sell in the first several years, you will be UNDER WATER. This is because of depreciation. The bronco may have an extra years worth of demand to cover it, but I don’t really expect it to cover the cost of depreciation at all as Ford ramps up production - especially of some of the more expensive models with accessories. If you don’t know what it means to be under water on a loan, you really should examine whether you need to increase your down payment or reduce the total vehicle price.
• if you don’t have at least 3-6 months of cash for your existing lifestyle + your new payment, you should lower your payment or increase your down payment until you do. People will lose their jobs over the next year, no question.
• you should start putting away the payment amount in a bank account now to practice having enough cash to afford your bronco, then use that money to increase your down payment
• there is a lot less shame in having a lower trim level and owning your own bronco than having to sell in a year because you couldn’t afford the payments or lost your job, or being beholden to your loan and being car-poor
• 72 month loans are LONG. Just because people do them doesn’t mean they are a good idea. It will likely take years for you to get above water on the loan. A lot can happen in your life in 5 years. Families, kids, houses, emergencies... being under wanted on a car SUCKS and you should calculate how long it will take you to be above water considering average vehicle depreciation.

-you can see how much car you can afford using a calculator like this: https://www.moneyunder30.com/car-affordability-calculator

-you can estimate depreciation value here (I used Jeep as an example) https://www.themoneycalculator.com/...tors/car-depreciation-by-make-and-model/JEEP/


Now: please buy the bronco you want, that you can afford.

A bronco is a bronco.

You don’t have to validate your decision to me. I’m just sharing this info because I know there are a lot of people on this forum buying an expensive vehicle for the first time.

If it feels expensive NOW, it’s probably too expensive.

You just went full Dave Ramsey and you are giving very sound advice.

People may not agree 100% but in the end you are just trying to help out.

Basically, don't take food off the table for your family just for a new vehicle.

 

[elnorte]

Of course, everyone's personal decisions are what is important, but just remember, how far do you want to undershoot future savings, $807K less?

All those other things, your correct, home ownership is over rated, family vacations and emergency funds, who needs them, the kids can always go to community college, no worries. Then again, maybe Walmart will start hiring door greeters again by the time you are in your golden years.

For a split second I didn't get the sarcastic undertone. ?? "home ownership overrated ...wtf"

 

[Hoofnmouth]

It is great advice i walk my dog with this girl who 35 and has thousands of dollars in college and credit card debt that she will never escape ! I told her to marry rich.

 

[rugbysecondrow]

Some of the dogmatic advice in this post is not objective, and I don’t see your credentials as a fiduciary for all the readers...

There is no “universally true” financial advice, and I highly recommend that readers either research their own situation enough to make their own decisions or hire someone who is legally obligated to provide management/advice that is in the best interest of their client.

Bronco is an average-priced new vehicle and debt is cheaper now than average inflation over the past 30 years. Figure out for yourself if you can afford it at all and decide for yourself how much debt you want to use to finance it. Not rocket science.

What was "dogmatic" about the post? Why does basic advice, which so many people avoid, ignore, or never learned, rub you the wrong way?

 

[Jackattack]

Not sure if this has been posted yet but edmunds.com has a great car loan calculator that incorporates your states tax.

 

[Roger123]

Of course, everyone's personal decisions are what is important, but just remember, how far do you want to undershoot future savings, $807K less?

All those other things, your correct, home ownership is over rated, family vacations and emergency funds, who needs them, the kids can always go to community college, no worries. Then again, maybe Walmart will start hiring door greeters again by the time you are in your golden years.

And this becomes much clearer when your 50 and looking at not working for the rest of your life. Literally the car you financed at 25 could mean the difference between working to 60 or retiring at 50.

 

[North7]

What was "dogmatic" about the post? Why does basic advice, which so many people avoid, ignore, or never learned, rub you the wrong way?

When advice hits to close to home, or it is something people don't want to hear, it is easier to try to reject or discredit the advice than to take it under advisement.

Sponsored