2019 Jeep Wrangler Purchase: Am I being stupid?

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Llama

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So I have been pretty Dave Ramsey-ish for quite a long time when it comes to vehicles. All my cars are now used. But I would like to replace my two door 2008 Wrangler with a four door. As some of you know resale value for these things is quite high. It is just the way it is. So when I look say 2016 and up, the prices are almost always via a dealership (clearly trade-ins). Few people pay cash for these things. And for the first time since 1997, I am planning on purchasing a new 2018 or more likely 2019 4 door Wrangler.

Background:
1. I already have a number of deals working. All are about 6% under invoice. Around $42k out the door
2. No debt. House paid off
3. Income ranges around $250k++ per year, but variable depending on RSU, options and profit sharing.
4. Net worth about $2.4 milliion, of which $2 million in liquid assets
5. About $1.2 million of that in taxable, rest in 401k


I do not keep that much cash in the bank, usually no more than $10k. My plan would be to simply finance the car, and pay it off once I sold some securities, which I would imagine would take about four or five days? I would also sell my 2008 and replace back into Vanguard. So true cost is closer to $30k

Questions:
1. Am I being a moron by purchasing a new car in the first place?
2. Any pitfalls to using a bank / car loan for 5 days?
3. Any other pitfalls to doing this beside the usual stealership shenanigans?

Thanks for the advice!





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Young04

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So I have been pretty Dave Ramsey-ish for quite a long time when it comes to vehicles. All my cars are now used. But I would like to replace my two door 2008 Wrangler with a four door. As some of you know resale value for these things is quite high. It is just the way it is. So when I look say 2016 and up, the prices are almost always via a dealership (clearly trade-ins). Few people pay cash for these things. And for the first time since 1997, I am planning on purchasing a new 2018 or more likely 2019 4 door Wrangler.

Background:
1. I already have a number of deals working. All are about 6% under invoice. Around $42k out the door
2. No debt. House paid off
3. Income ranges around $250k++ per year, but variable depending on RSU, options and profit sharing.
4. Net worth about $2.4 milliion, of which $2 million in liquid assets
5. About $1.2 million of that in taxable, rest in 401k


I do not keep that much cash in the bank, usually no more than $10k. My plan would be to simply finance the car, and pay it off once I sold some securities, which I would imagine would take about four or five days? I would also sell my 2008 and replace back into Vanguard. So true cost is closer to $30k

Questions:
1. Am I being a moron by purchasing a new car in the first place?
2. Any pitfalls to using a bank / car loan for 5 days?
3. Any other pitfalls to doing this beside the usual stealership shenanigans?

Thanks for the advice!
Just do it!!

No offense, but what are you trying to accomplish by putting your financial stats on here? But since you did, I will too: My income almost qualifies me for welfare, am up to my eyeballs in debt but I'm so irresponsible that I own 4 cars, including a $90K+ BMW.

Ok, in seriousness, just check the loan agreement to make sure that there is no prepayment penalty. But I'm sure you knew that.
 

BVGeezer

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So I have been pretty Dave Ramsey-ish for quite a long time when it comes to vehicles. All my cars are now used. But I would like to replace my two door 2008 Wrangler with a four door. As some of you know resale value for these things is quite high. It is just the way it is. So when I look say 2016 and up, the prices are almost always via a dealership (clearly trade-ins). Few people pay cash for these things. And for the first time since 1997, I am planning on purchasing a new 2018 or more likely 2019 4 door Wrangler.

Background:
1. I already have a number of deals working. All are about 6% under invoice. Around $42k out the door
2. No debt. House paid off
3. Income ranges around $250k++ per year, but variable depending on RSU, options and profit sharing.
4. Net worth about $2.4 milliion, of which $2 million in liquid assets
5. About $1.2 million of that in taxable, rest in 401k


I do not keep that much cash in the bank, usually no more than $10k. My plan would be to simply finance the car, and pay it off once I sold some securities, which I would imagine would take about four or five days? I would also sell my 2008 and replace back into Vanguard. So true cost is closer to $30k

Questions:
1. Am I being a moron by purchasing a new car in the first place?
2. Any pitfalls to using a bank / car loan for 5 days?
3. Any other pitfalls to doing this beside the usual stealership shenanigans?

Thanks for the advice!
Only thought is that many bank loans on vehicles have a minimum amount of time that you must keep it before paying off. 6 months comes to mind. Might be 30 days. Check before signing.

I also keep a $50K home equity line of credit just for such cases.

With those kind of assets, why not use a margin against your securities?

I've also had a dealer hold my check for a week while my funds cleared. Told them up front the check was "hot" until funds were available. No problem. I drove the car off the lot. Credit score north of 800 will work wonders.
 

KnG818

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So I have been pretty Dave Ramsey-ish for quite a long time when it comes to vehicles. All my cars are now used. But I would like to replace my two door 2008 Wrangler with a four door. As some of you know resale value for these things is quite high. It is just the way it is. So when I look say 2016 and up, the prices are almost always via a dealership (clearly trade-ins). Few people pay cash for these things. And for the first time since 1997, I am planning on purchasing a new 2018 or more likely 2019 4 door Wrangler.

Background:
1. I already have a number of deals working. All are about 6% under invoice. Around $42k out the door
2. No debt. House paid off
3. Income ranges around $250k++ per year, but variable depending on RSU, options and profit sharing.
4. Net worth about $2.4 milliion, of which $2 million in liquid assets
5. About $1.2 million of that in taxable, rest in 401k


I do not keep that much cash in the bank, usually no more than $10k. My plan would be to simply finance the car, and pay it off once I sold some securities, which I would imagine would take about four or five days? I would also sell my 2008 and replace back into Vanguard. So true cost is closer to $30k

Questions:
1. Am I being a moron by purchasing a new car in the first place?
2. Any pitfalls to using a bank / car loan for 5 days?
3. Any other pitfalls to doing this beside the usual stealership shenanigans?

Thanks for the advice!
Who gives a flying donkey how much your worth?

If you make that much what's $40k?

Go shine your badge somewhere else, like a financial forum.
 

higbyz

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So I have been pretty Dave Ramsey-ish for quite a long time when it comes to vehicles. All my cars are now used. But I would like to replace my two door 2008 Wrangler with a four door. As some of you know resale value for these things is quite high. It is just the way it is. So when I look say 2016 and up, the prices are almost always via a dealership (clearly trade-ins). Few people pay cash for these things. And for the first time since 1997, I am planning on purchasing a new 2018 or more likely 2019 4 door Wrangler.

Background:
1. I already have a number of deals working. All are about 6% under invoice. Around $42k out the door
2. No debt. House paid off
3. Income ranges around $250k++ per year, but variable depending on RSU, options and profit sharing.
4. Net worth about $2.4 milliion, of which $2 million in liquid assets
5. About $1.2 million of that in taxable, rest in 401k


I do not keep that much cash in the bank, usually no more than $10k. My plan would be to simply finance the car, and pay it off once I sold some securities, which I would imagine would take about four or five days? I would also sell my 2008 and replace back into Vanguard. So true cost is closer to $30k

Questions:
1. Am I being a moron by purchasing a new car in the first place?
2. Any pitfalls to using a bank / car loan for 5 days?
3. Any other pitfalls to doing this beside the usual stealership shenanigans?

Thanks for the advice!
The Jeep is a depreciating asset , why finance it when you can pay cash ? You make $250 k per year ?! Why does it take days to sell securities ? I just press a button. Buy the Jeep outright , dont finance it.
 

basinite

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LOL. I like your post, but probably a little more financial info than needed.

I am also a big fan of Dave Ramsey and love listening to his radio program and all the individuals he helps "liberate" from debt. You need to keep in mind, his advice is geared towards people who have serious problems managing money (this is probably not your case). Buy the Jeep and have fun, you only live once.

***Regarding financing: Use it as an incentive to get a better deal. The dealers get a kickback when they finance a vehicle, so you can use this to your advantage. Sometimes you might have to carry the loan for 4 payments or so, but it is worth it. Say your loan is $30,000, you just put down $28,000 on day one (don't wait for the first payment to be due or interest will accrue), then spread the remaining $2000 over the next 4 months. You will pay almost zero interest. The dealer will usually shed a few hundred bucks if you agree to use them when financing. I've did this on the last 2 vehicles I've purchased and came out ahead. Even if you end up paying a "finance fee" or a few bucks in interest, you will still save money depending on how well you negotiate with the dealer regarding working in financing. Hope this made sense.
 

agarber5687

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Questions:
1. Am I being a moron by purchasing a new car in the first place?
No. Financial arguments can be made for both due to the warranty and low depreciation of Jeep's specifically
2. Any pitfalls to using a bank / car loan for 5 days?
Yes, you could have loan origination fees and as another user said, watch out of early payoff fees.
3. Any other pitfalls to doing this beside the usual stealership shenanigans?
Assuming you do not have large capital gains on the securities you are selling (especially short-term cap gains taxed as ordinary income = 35% for you), being patient and just using cash is much easier and more straightforward.

I am surprised it will take you 4-5 days to liquidate assets. Even if you asked to sell before market close today, you should have your money by Monday via a wire or Tuesday via an ACH. Talk to your advisor before taking out a loan for a problem you might not have.
 

rickyrobert

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The Jeep is a depreciating asset , why finance it when you can pay cash ? You make $250 k per year ?! Why does it take days to sell securities ? I just press a button. Buy the Jeep outright , dont finance it.
He may want to write it off as a buisness expense for tax purposes. That is why I lease. If I didn't have a buisness, or he doesn't, I 100% agree. With that income, and no business, buy outright,
 

Buckster

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If your posted balance sheet is accurate, then one would assume that you also have at least one financial advisor.....yet you are on a Jeep form asking for financial advice from a bunch of admitted neanderthals (myself included)??
 

Columbus104

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Ok, as someone who works in management and gets all giddy about numbers, I'll bite. First of all, kudos for having very responsible personal finances. More people should be like you. Clearly you're making an informed and not impulsive purchase decision. While purchasing a new car does have depreciation downsides, it also has the upside of a warranty. And of course Wranglers are amongst (if not the) slowest depriciating vehicles on the road, so that decreases that downside.

One question about your purchase. Since you are obviously looking for a very short-term loan, why not pay for the vehicle on a credit card that gives you some sweet benefits (points, airline miles, etc). Purchasing a car on a credit card that you plan to pay off over time would be a HORRIBLE decision (18-30% interest). But since you clearly plan to pay it off before the next statement, I would advise taking advantage of it and getting the benefits.
 

Young04

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Ok, as someone who works in management and gets all giddy about numbers, I'll bite. First of all, kudos for having very responsible personal finances. More people should be like you. Clearly you're making an informed and not impulsive purchase decision. While purchasing a new car does have depreciation downsides, it also has the upside of a warranty. And of course Wranglers are amongst (if not the) slowest depriciating vehicles on the road, so that decreases that downside.

One question about your purchase. Since you are obviously looking for a very short-term loan, why not pay for the vehicle on a credit card that gives you some sweet benefits (points, airline miles, etc). Purchasing a car on a credit card that you plan to pay off over time would be a HORRIBLE decision (18-30% interest). But since you clearly plan to pay it off before the next statement, I would advise taking advantage of it and getting the benefits.
Unlikely someone will allow a credit card purchase of the vehicle. The seller pays fees on that.
 

multicam

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LOL. I like your post, but probably a little more financial info than needed.

I am also a big fan of Dave Ramsey and love listening to his radio program and all the individuals he helps "liberate" from debt. You need to keep in mind, his advice is geared towards people who have serious problems managing money (this is probably not your case). Buy the Jeep and have fun, you only live once.

***Regarding financing: Use it as an incentive to get a better deal. The dealers get a kickback when they finance a vehicle, so you can use this to your advantage. Sometimes you might have to carry the loan for 4 payments or so, but it is worth it. Say your loan is $30,000, you just put down $28,000 on day one (don't wait for the first payment to be due or interest will accrue), then spread the remaining $2000 over the next 4 months. You will pay almost zero interest. The dealer will usually shed a few hundred bucks if you agree to use them when financing. I've did this on the last 2 vehicles I've purchased and came out ahead. Even if you end up paying a "finance fee" or a few bucks in interest, you will still save money depending on how well you negotiate with the dealer regarding working in financing. Hope this made sense.
I was going to say something along the lines of what you said after the ***. Try to use financing to your advantage.

Also, as others have pointed out, Wranglers are one of those vehicles that it often makes sense to just buy new, especially if you’re trying to decide between a 2016, 2017 or a new 2019. It has been like this for years.
 

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