Well, I’m back out on the ledge again. I’m just agonizing on whether to buy a new truck or not. Yeah, I know, I’ve talked myself out of it twice before. But the urge just keeps on coming back. Here’s the situation:
I have a 1997 Toyota Tacoma that has 95,000 miles on it (or so). I’ve owned it for 7 years. (which is much longer than I’ve ever owned another car)
Here are the pluses:
-It’s paid for
-It’s not depreciating a lot each year now
-It’s paid for
-It’s in good shape
Here are the negatives:
-My wife and daughter don’t fit very well (in fact my wife doesn’t want to ride in it anymore because she has no room if our daughter is in there too) That leaves us with one car to ALWAYS drive, and it’s a 1996.
-It’s got a chronic clutch problem that has always annoyed me. (but it hasn’t let me down)
The new truck is going to cost around $26K (plus tax and license).
Here’s why I’m still considering it. We are putting away over $1000 per month in our 401K, $200 in our Roth, and paying the equivalent of 1 extra payment on our house (broken up in to 12). That’s well over $1200 per month in investments alone. When you also consider that we are paying our house off about 7 years early, I believe we are saving enough each month.
Our cash flow is good. We have over 20% of our income left each month, even after paying all of our bills, and including the above investments. I’d probably put down about half of the value and carry a small loan so that I can keep my emergency fund in good shape. That would put me at somewhere around a $200 payment each month. No sweat. What is killing me to think about is all the depreciation I’m going to face. I’m thinking that will be offset by the estimated number of years I plan to keep it. If I can keep it 7-8 years, like I have this one, I think the depreciation would be reasonable.
So, I’m looking for some feedback here. Am I crazy to even be considering it? I’m trying to balance between saving everything for a day that might never come, and living a little now. What would you do in my situation?