It's super hard to judge how things will be in a few years. The market is being weird.Any guesstimates for how much the Maverick will depreciate / resale value in 2-3 years time?
What is happening in the car market is a black swan event right now due to a once in a lifetime issue. The above is pretty good estimate. Since the Maverick isn't a Jeep Wrangler series, Toyota or Honda I would think 5% per year depreciation is conservative. Maybe 10%. You can always buy gap insurance to cover yourself for being underwater on your loan on day one. I hear that is all the rage now with cars.30% +- 5%. If you're going that way, lease.
I either lease and return or buy new and drive to the ground.
Any guesstimates for how much the Maverick will depreciate / resale value in 2-3 years time?
I would generally agree, but it all depends on the numbers. If you have a 5.9% interest rate on an 84 month loan, you pay it down quickly. If you have a 0.9% interest rate on a 48 month loan, use the money on something more profitable.As a side note, unless you have 0 other debt, i think putting extra principal payments on an auto loan is rather silly.
No doubt. Luxury car depreciation is real. Easy to get upside down real quick.If we were taking about a $60,000 used Maserati, any loan is too much and needs to be paid down immediately.
It is generally tough to predict. Trucks (like any vehicle) can do better or worse in certain markets. They are popular in Minnesota and retain value - the same might not go for California or Florida.What is happening in the car market is a black swan event right now due to a once in a lifetime issue. The above is pretty good estimate. Since the Maverick isn't a Jeep Wrangler series, Toyota or Honda I would think 5% per year depreciation is conservative. Maybe 10%. You can always buy gap insurance to cover yourself for being underwater on your loan on day one. I hear that is all the rage now with cars.
Buy under what you can afford now without being underwater with no more than a 4 year loan and send a little extra principal payment each month. Drive it for 10 years or until it dies and repeat.
I agree - I'd say anything above the going credit union rates should really be avoided - right now in MN 60/72 are 2.74 or 2.99, 84 is at 3.99 - corresponding interest costs on a $25k loan would be about $1,700, $2,300 or $3,700!!! As can be seen, extending the loan beyond the 6 year mark has a substantial impact, even with a reasonably low rate.I dont think what your financing has any bearing on whether or not you should pay extra towards. The 1 and only factor that matters is interest rate. Even at 5.9% i think its financially a dumb idea to pay extra when you have credit card debt getting dinged 20% or whatever on.
To take it a step further, although 5.9% is pushing it, it is often times better to actually invest excess $, rather than spend it on low interest debt.
Glad you will not be picking up Gap insurance now or everIt is generally tough to predict. Trucks (like any vehicle) can do better or worse in certain markets. They are popular in Minnesota and retain value - the same might not go for California or Florida.
While I won't be picking up gap insurance as we recently refi'd our home and paid our vehicles off, I've found that your auto insurance often has well priced gap insurance - generally under $10 (maybe a little more?)/month. Given you only really need gap insurance towards the start of a vehicle's life/loan, this is a better option than rolling it into financing for 48-60-72 months. Also this provides the benefit of being able to cancel at any time without the hassle of having to jump through hoops to get the balance of the value back if you end the gap contract purchased with the vehicle.