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Thread: Toyota 4runner purchase

  1. #1
    Senior Member Ultralight's Avatar
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    Toyota 4runner purchase

    A junior colleague of mine who is 24 owns her own condo (or the bank owns it and she pays a mortgage). She recently bought a used 4runner with about 20k miles for $31k.

    5 year loan. She has no student debt and makes about $48k a year. She has two expensive hobbies but has, by her own description, never been fiscally responsible. But she makes enough money to live paycheck by paycheck and still cover her bills and hobbies.

    Her financial adviser said: "Buying this vehicle will be a good way to teach you to budget."

    Thoughts?
    I came from a real tough neighborhood. I put my hand in some cement and felt another hand." -- Rodney Dangerfield

  2. #2
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    I think this is between her and her "financial advisor", which is probably the bank loan officer.
    Are you the financial advisor or what is your vested interest?

  3. #3
    Senior Member Rogar's Avatar
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    Toyotas have a reputation for reliability and good resale value. A five year loan is a long time to have to pay interest. Without more information, it doesnt sound like that bad of a decision.

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    Senior Member SteveinMN's Avatar
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    A little back-of-the-envelope math shows that financing $31,000 at typical car loan rates will cost about $550/month for five years. That's a chunk of change. Not un-doable but (depending on what she was driving before) not her only additional budget expense (her insurance likely went up and she may be paying more for fuel and maintenance on the newer vehicle). If she's living paycheck-to-paycheck now, at no more than $3,000/month take home, she'll likely have to watch her other expenses to find at least $150/week (for fuel, insurance, eventual service and maintenance, etc.) she needs for the 4Runner. Of course, we don't know her entire financial situation, but it looks like this purchase will encourage at least a little planning and prioritization on her part.
    Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome. - Booker T. Washington

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    Senior Member Ultralight's Avatar
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    Quote Originally Posted by ToomuchStuff View Post
    I think this is between her and her "financial advisor", which is probably the bank loan officer.
    Are you the financial advisor or what is your vested interest?
    It was not the bank loan officer. Her financial adviser is a family friend who I think works in finance, maybe he is an accountant. Something like that.

    My interest is primarily in examining this rationale:

    Her financial adviser said: "Buying this vehicle will be a good way to teach you to budget."

    To me, that is like saying:

    "Fight for peace" or "having sex is the best way to remain chaste" or "eating cookies is the best way to lose weight."
    I came from a real tough neighborhood. I put my hand in some cement and felt another hand." -- Rodney Dangerfield

  6. #6
    Senior Member Ultralight's Avatar
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    Quote Originally Posted by Rogar View Post
    Toyotas have a reputation for reliability and good resale value. A five year loan is a long time to have to pay interest. Without more information, it doesn’t sound like that bad of a decision.
    It is a gas guzzler.
    I came from a real tough neighborhood. I put my hand in some cement and felt another hand." -- Rodney Dangerfield

  7. #7
    Senior Member Ultralight's Avatar
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    Quote Originally Posted by SteveinMN View Post
    A little back-of-the-envelope math shows that financing $31,000 at typical car loan rates will cost about $550/month for five years. That's a chunk of change. Not un-doable but (depending on what she was driving before) not her only additional budget expense (her insurance likely went up and she may be paying more for fuel and maintenance on the newer vehicle). If she's living paycheck-to-paycheck now, at no more than $3,000/month take home, she'll likely have to watch her other expenses to find at least $150/week (for fuel, insurance, eventual service and maintenance, etc.) she needs for the 4Runner. Of course, we don't know her entire financial situation, but it looks like this purchase will encourage at least a little planning and prioritization on her part.

    She is a rock climber so her thought was she could take in all over for trips to climb. She can camp out in the back.

    When she was still in the research stage, trying to find a car to buy, she told me she wanted the 4runner for her adventuring. I suggested she buy a used Prius, a mountain bike, and tent. Then drive the Prius to the closest spot with good roads. Park it. Hop on the bike and ride to the rock.

    She did not like this idea! LOL
    I came from a real tough neighborhood. I put my hand in some cement and felt another hand." -- Rodney Dangerfield

  8. #8
    Senior Member Rogar's Avatar
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    Quote Originally Posted by Ultralight View Post
    It is a gas guzzler.
    Yup. There are not a lot of choices for any sort of decent off-roading that are not. Some of the Subaru models get better mileage and have decent clearance and lower gears, but not as much undercarriage protection or really crawling granny gears. They get better mileage. The around town SUVs like the RAV don't qualify in my book. My suggestion would be to use bike or public transportation for around town. I drive a Tacoma which gets about the same mileage. I own it for similar adventure reasons, plus I use the bed routinely, and your Prius idea would not fly with me either. But I don't put a lot of miles on because of alternate transportation around town. My pick would be a Subaru over a 4-runner for my next vehicle.

    Four-runners have such good resale value around here that if it's not working out she could probably sell it without a great loss. When I got my Tacoma I could get a brand new very basic model for less that the tricked out used ones I could find, even ones with high mileage.

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    Quote Originally Posted by Ultralight View Post
    She is a rock climber so her thought was she could take in all over for trips to climb. She can camp out in the back.

    When she was still in the research stage, trying to find a car to buy, she told me she wanted the 4runner for her adventuring. I suggested she buy a used Prius, a mountain bike, and tent. Then drive the Prius to the closest spot with good roads. Park it. Hop on the bike and ride to the rock.

    She did not like this idea! LOL
    Well, spending time on the bike getting to where she can climb takes time away from rock climbing, and the rock climbing is her goal, not bike riding. And it might be difficult (although not impossible) to camp out in a Prius. As a woman camping alone, she might not feel safe in a tent, but need the security of doors that can lock at night when she is sleeping. If her goal is to maximize her time spent rock climbing and to stay safe while camping, your suggestions do not work.

  10. #10
    Moderator Float On's Avatar
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    People may or may not learn from mistakes.
    People make different choices depending on what's important to them.
    You can give advice and it may or may not (most likely not) be taken.
    It's not your business.
    You can observe other's decisions and apply it to your own life...but don't need to tell them you did so.
    Float On: My "Happy Place" is on my little kayak in the coves of Table Rock Lake.

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