35 VS. 37 = SUPPLY AND DEMAND.

[rp606]

Thank you. I wear a mask whenever I'm indoors at public places and I have had all three vaccine shots. I have also done extremely well in the market the last 2 years with moderna, Pfizer, novavax, and APPLE. I'm glad I listened to Dr. Anthony Fauci for a number of intelligent choices.

Ok karen

 

[Metronome]

My dealership just got in a 2021 Raptor in code orange with the 37 Performance Package. It's a BEAST but honestly the sticker kit has #37 on both rear fenders, looks lame. Why Ford WHY????? It will sell over MSRP. I still get calls for non 37 packages.

agreed! the 37 graphics are cool...until they put a '37' on the side. so cheesy!! Just in case anyone forgets the size of tire on their truck, it's printed on the side. No thanks

 

[melvimbe]

Sorry I forgot, you are paying interest on your kids cars so you don’t have to shuttle them around, that is a convenience cost, however, if you could, I assume you would have paid cash for their cars? Otherwise, please tell me where you can earn 5% on an investment without risk? 5% of 1000 is 50. If you’re in the 28% tax bracket you may realize $36……without paying on a loan. If you bought your kids a $10000 car at an interest rate of 2%, you would be plus 3%…….before taxes….however that 3% is taxed at you income bracket. You would be a few cents positive, but with inflation, you will probably be negative. The dollar is worth less everyday Biden is in office, I think it best to spend it now rather than later.

A point about risk...while I am definitely on the risk averse side and am surely poorer for it, I am aware that risk isn't completely unavoidable. You can't fully avoid risk by paying cash for everything and never investing. You will lose due to inflation and depreciation. and all that lost opportunity.

Regarding the point of whether I would have paid cash if I could....no. First off, I technically could have. I would have been less liquid than I want to be, or would have had to sell some investments and take a tax hit. It would not have been smart to do that, but I could have. But lets say I had 50-60k laying around. I would not have, particularly during this period of high inflation.

The way I see it, when you know inflation is going to be around for awhile, you want to buy with todays dollars instead of tomorrows. Everything will cost more, but the assets stay the same value to me. And if there are assets you want now or in the near future, buy now. And the whole reason credit exists is to extend your ability to buy now, so why not use it? Don't over extend yourself, sure, but why limit to only what you have in cash.

I actually bought my daughter's car when she was still 14, because I knew I could get a good deal now before prices rise, knew it would be a good commuter car for me in the mean time, and save some wear on the vehicle. A probably didn't save much given insurance costs, but I am glad I'm not out looking for deals right now.

I do wish that I had looked at getting other assets before on this hit. I have been thinking about land to retire on, but never pulled the trigger. That's going to cost me. If had had the extra $50-$60k a year ago, I probably would bought land, maybe some toys to play with, and use that cash to slowly pay off the loans. Even if I didn't bother to invest the cash, dead money reserve to play off loans beats today's inflation.

 

[cadurham88]

A point about risk...while I am definitely on the risk averse side and am surely poorer for it, I am aware that risk isn't completely unavoidable. You can't fully avoid risk by paying cash for everything and never investing. You will lose due to inflation and depreciation. and all that lost opportunity.

Regarding the point of whether I would have paid cash if I could....no. First off, I technically could have. I would have been less liquid than I want to be, or would have had to sell some investments and take a tax hit. It would not have been smart to do that, but I could have. But lets say I had 50-60k laying around. I would not have, particularly during this period of high inflation.

The way I see it, when you know inflation is going to be around for awhile, you want to buy with todays dollars instead of tomorrows. Everything will cost more, but the assets stay the same value to me. And if there are assets you want now or in the near future, buy now. And the whole reason credit exists is to extend your ability to buy now, so why not use it? Don't over extend yourself, sure, but why limit to only what you have in cash.

I actually bought my daughter's car when she was still 14, because I knew I could get a good deal now before prices rise, knew it would be a good commuter car for me in the mean time, and save some wear on the vehicle. A probably didn't save much given insurance costs, but I am glad I'm not out looking for deals right now.

I do wish that I had looked at getting other assets before on this hit. I have been thinking about land to retire on, but never pulled the trigger. That's going to cost me. If had had the extra $50-$60k a year ago, I probably would bought land, maybe some toys to play with, and use that cash to slowly pay off the loans. Even if I didn't bother to invest the cash, dead money reserve to play off loans beats today's inflation.

Interest rate arbitrage…if the loan percentage is lower then the expected future interest rate, then there is a strong case to say the loan is the better investment decision vs paying cash. But, how about everyone stay out of everyone elses finances.

 

[K9 EXPERT]

A point about risk...while I am definitely on the risk averse side and am surely poorer for it, I am aware that risk isn't completely unavoidable. You can't fully avoid risk by paying cash for everything and never investing. You will lose due to inflation and depreciation. and all that lost opportunity.

Regarding the point of whether I would have paid cash if I could....no. First off, I technically could have. I would have been less liquid than I want to be, or would have had to sell some investments and take a tax hit. It would not have been smart to do that, but I could have. But lets say I had 50-60k laying around. I would not have, particularly during this period of high inflation.

The way I see it, when you know inflation is going to be around for awhile, you want to buy with todays dollars instead of tomorrows. Everything will cost more, but the assets stay the same value to me. And if there are assets you want now or in the near future, buy now. And the whole reason credit exists is to extend your ability to buy now, so why not use it? Don't over extend yourself, sure, but why limit to only what you have in cash.

I actually bought my daughter's car when she was still 14, because I knew I could get a good deal now before prices rise, knew it would be a good commuter car for me in the mean time, and save some wear on the vehicle. A probably didn't save much given insurance costs, but I am glad I'm not out looking for deals right now.

I do wish that I had looked at getting other assets before on this hit. I have been thinking about land to retire on, but never pulled the trigger. That's going to cost me. If had had the extra $50-$60k a year ago, I probably would bought land, maybe some toys to play with, and use that cash to slowly pay off the loans. Even if I didn't bother to invest the cash, dead money reserve to play off loans beats today's inflation.

Everyones situation is unique. I have never paid interest on a credit card, ever. I havent had a car loan for at least 30 years and although I have purchased several houses, I haven’t had a mortgage in at least the last 15 years. Todays dollars are the dollars a person currently possesses. As you said, inflation is booming and I think it smart to use todays dollars to pay cash for everything. Investments and taxes are different. Paying taxes is a good thing because it means you are making money. Investments are not a sure thing, if you know any, please let me know. Thankfully I made more in the stock market than I lost and I am also thankful that Capital Gains tax is less than regular income tax. My current house cost just over seven figures. Had I taken a loan for 500k, at 3%, for the first 105 months I would have paid over 2000 per month in interest which would equal well over 210k. All numbers are rounded. That is in my pocket….net, no taxes owed. Conversely, in order to net 210k from investment income, my investments probably would be required to earn 275k in just over 8 years. That means a 500k investment would have returned over 50% in eight years. Even the current SP 500 is not doing that. Yes people can “write off mortgage interest“, but depending on income bracket a person may save 2-3 percent in taxes. Just prior to COVID I really got lucky and liquidated my entire investment account. The Dow was just over 31000. Today the DOW is higher so MAYBE if I did not liquidate, I could be worth more, but my stomach would still be hurting from the DOW’s fall after COVID. I will jump back in after the DOW drops 25% and it will. I have one more example for you. Unless an employer matches contributions and sometimes even if they do match, people that have a 401k pay more taxes when they start withdrawal than they would have if they simply paid taxes when they earned the money. Taxes always go up…..ALWAYS! Regardless, one size does not fit all. Unfortunately children today have cars purchased for them (my opinion), instead of working to earn the car themselves. Then they attend school and do not learn about money, or even how to balance a checkbook. They learn CTR and about the Aztecs, just like I did, except I paid for everything I had as a kid, which made me learn about money and checkbooks. Remember that is just my opinions. Lastly, I was at a park in Idaho this summer training dogs and saw young kids arrive to play a little league game. Every kid carried, or wheeled a bag full of bats, gloves and everything in between. My guess is every bag contained at least $1000 worth of gear……for eight year olds! I was blown away, but then again I don’t have kids!

 

[K9 EXPERT]

This is a review of the 37. However what is interesting is at minute 15:15, he talks about the ADM.

 

[smurfslayer]

A bit of hyperbole for sure. He’s surely seen them advertised for 20k over or more, but that’s in no way a sign of what they’re selling for.

Unless of course he has ... wait for it ...
purchase orders showing the ADM ;-)

 

[cadurham88]

Cars.com or Autotrader dealer listings (from a national search) are asking for $10-20k over MSRP (aka ADM) on 35s and $20-30k on 37s. Asking price vs purchase price obviously not the same, but dealers are asking for $20k and not getting nothing. I would guess that they are getting about half, so $5-10k ADM on 35s and $10-15k on 37s. I would further that guess by saying the higher end of that range is probably going to trucks that have the 801a package.

 

[K9 EXPERT]

The only way to get an educated assessment is for the people that indicated they paid MSRP to post the contract. I forgot where, but I read something earlier that an individual posted he knows three dealers that are selling RAPTORS at MSRP, but failed to name the dealers. Maybe he does and maybe he doesn‘t, but those type of blanket statements are just that, statements. I understand people have nothing to prove, but why not contribute to accurate data. If my 37 ever arrives, I will post the contract stipulating I paid a 5k ADM.

 

[smurfslayer]

I’m sure the statements were at one time true and they may even be from customers who scored MSRP, but, stealerships do work on relationships and smaller ones work on local customer bases primarily. And, there’s no guarantee they won’t get greedy later on.
I had the same issues just like many others here in ’16-’17. I called a place in NM who had literally just inked an MSRP deal but the sales lady wasn’t having it for me. Things happen.

This is just a bad consumer market place to be in right now.