Auto Loan

[Craigy]

Donnie wrote:

Jfleenm16 wrote:

After thinking about. I want to do one of two things: 1)keep the truck, live with the purchase, enjoy the truck and try not to look back. 2) Sell the truck and buy a (reliable as I can get) 10-15K vehicle, which would wipe away the truck debt, but also leave me knowing that I completely flushed 20k to drive a clunker. 

Click to expand…

The problem is that you can’t afford to make the ~$11k per year truck payments.  The $20k is gone and shouldn’t factor into your analysis.  You are going to flush another $10k on depreciation and $5k in interest on this truck over the next 4 years.  I would get a way cheaper car than $10k if I were you, like ~$3k.  I didn’t drive a car that was newer than 10 years old until I was making mid-6 figures and had three kids.

Click to expand...

He absolutely can afford it, he just probably shouldn't be choosing to.

[Zaphod]

Craigy wrote:

Donnie wrote:

Jfleenm16 wrote:

After thinking about. I want to do one of two things: 1)keep the truck, live with the purchase, enjoy the truck and try not to look back. 2) Sell the truck and buy a (reliable as I can get) 10-15K vehicle, which would wipe away the truck debt, but also leave me knowing that I completely flushed 20k to drive a clunker.

Click to expand…

The problem is that you can’t afford to make the ~$11k per year truck payments.  The $20k is gone and shouldn’t factor into your analysis.  You are going to flush another $10k on depreciation and $5k in interest on this truck over the next 4 years.  I would get a way cheaper car than $10k if I were you, like ~$3k.  I didn’t drive a car that was newer than 10 years old until I was making mid-6 figures and had three kids.

Click to expand…

He absolutely can afford it, he just probably shouldn’t be choosing to.

Click to expand...

As someone trying to buy a second car (admittedly an SUV which is a slight premium, but safety), it is not easy to find a (safe, reliable) car for much cheaper than 10k all expenses included that isnt well over 100k miles, and way more than 10 years old. I have all of the greater southern california area to choose from, and its still hard. Ive spent several weekends and a couple fruitless trips, and cannot seem to satisfy the boxes. We're still not in a rush, but its annoying.

Its just totally unreasonable to get an absolute beater or a car you're more likely to get stranded with for the sake of (I know op is a resident) what is basically a discretionary amount of money per month. A car that is over 10 years old is vastly less safe and far more likely to have mechanical issues. I would say thats even more important as a resident as your time isnt your own.

[Nysoz]

Jfleenm16 wrote:

Thanks for that perspective Craigy. You’re right in assuming I’m not a savvy negotiator nor experienced in making large purchases (what gave it away? Me buying the extended warranty?). Going to the dealer and recouping this money ASAP and start looking at refinancing soon

The truck is a 2017 F-250 diesel. Has a lot of bells and whistles and is overly luxurious. Love the truck. I do a lot of boating on my free time and keep a 6000lb boat on a trailer (boat was a gift). The truck makes pulling the boat a dream. I bought the truck with full intentions to keep the thing until the wheels fall off, and hopefully will if I end up keeping it.

Right now I’m a military doc with 12 yrs service (have prior service and did HSCP) doing a general medical officer tour and going into emergency medicine after the tour ends in June 2019. My income will go up by about 15K annually after taxes in the next month or so until June 2019.

Future plans are to retire through the military, have my student loans paid off by PSLF and go to work in the civilian sector in 9 years. Currently contributing to the TSP at 25% of my base pay which is about $1600/mo and have about 40k saved in TSP/IRA/Index funds. I’m 33

I’ve had the Truck now for 3 mo and the lost opportunity cost and thought of not having the money to do other things, i.e. travel have just been eating at me. Hence my initial post.

 

After thinking about. I want to do one of two things: 1)keep the truck, live with the purchase, enjoy the truck and try not to look back. 2) Sell the truck and buy a (reliable as I can get) 10-15K vehicle, which would wipe away the truck debt, but also leave me knowing that I completely flushed 20k to drive a clunker.

Just wondering which decision I will be kicking myself for more for 10 yrs from now.

Click to expand...

I'm confused about you having student loans and current military. I thought with the HSCP it pays for your medical school in exchange for your service?

Also, I wouldn't count on PSLF until people actually get their loans forgiven and see what happens as a result of it. I've been a naysayer and have had doubts about the program for a while, but would be really happy to be proved wrong.

[Craigy]

Jfleenm16 wrote:

Thanks for that perspective Craigy. You’re right in assuming I’m not a savvy negotiator nor experienced in making large purchases (what gave it away? Me buying the extended warranty?). Going to the dealer and recouping this money ASAP and start looking at refinancing soon

The truck is a 2017 F-250 diesel. Has a lot of bells and whistles and is overly luxurious. Love the truck. I do a lot of boating on my free time and keep a 6000lb boat on a trailer (boat was a gift). The truck makes pulling the boat a dream. I bought the truck with full intentions to keep the thing until the wheels fall off, and hopefully will if I end up keeping it.

Right now I’m a military doc with 12 yrs service (have prior service and did HSCP) doing a general medical officer tour and going into emergency medicine after the tour ends in June 2019. My income will go up by about 15K annually after taxes in the next month or so until June 2019.

Future plans are to retire through the military, have my student loans paid off by PSLF and go to work in the civilian sector in 9 years. Currently contributing to the TSP at 25% of my base pay which is about $1600/mo and have about 40k saved in TSP/IRA/Index funds. I’m 33

I’ve had the Truck now for 3 mo and the lost opportunity cost and thought of not having the money to do other things, i.e. travel have just been eating at me. Hence my initial post.

 

After thinking about. I want to do one of two things: 1)keep the truck, live with the purchase, enjoy the truck and try not to look back. 2) Sell the truck and buy a (reliable as I can get) 10-15K vehicle, which would wipe away the truck debt, but also leave me knowing that I completely flushed 20k to drive a clunker.

Just wondering which decision I will be kicking myself for more for 10 yrs from now.

Click to expand...

Since I'm the only one possibly defending the decision to keep it, I don't feel too guilty playing devil's advocate here.   

One more consideration is that the clunker will probably need to be replaced much, much sooner than the 3 month old truck.  The $15,000-$18,000 truck still depreciates, and will quickly become a $5,000 truck and will have various problems along the way.  If you get something that's truly fully or nearly fully depreciated (i.e., well under $10,000), then the depreciation factor goes away, but you're still going to be left with a vehicle that's costly to keep running.  I'm not an expert, but from my limited understanding, a lot of those 3/4 ton trucks are expensive to keep running once they have a lot of miles, particularly the diesels.  You could easily be looking at spending a couple grand a year on parts and labor.  Plus this expense is to drive an old vehicle which you won't enjoy, and may even cause you stress and trouble when various things go out.

On the flipside, your $54,000 F250 should run relatively trouble free for the foreseeable future.  Unless you just beat the ************************ out of it, pile on the miles, etc (you'll be doing the opposite since this is a personal vehicle), you should have at least a decade, maybe more, before this $54,000 truck turns itself into a $25,000 vehicle.  With some quick math, that's under $2,900 a year on future depreciation, which really is a pretty responsible choice, with the *big* assumption that you keep this truck as long as you can and don't decide to trade it in on a new one in a few more years.

33 and 8 years away from a generous military pension, plus loan forgiveness, plus saving 25% of base to your thrift savings plan is pretty strong, all things considered.  Many docs at 33 still haven't even finished their residencies at this point.  Also, presumably you're living on that $90k per year, including contributing toward retirement, which is more than most attending physicians can say.  All in all, you're living a fairly frugal, responsible lifestyle, and this truck is your one big splurge.

IMO most docs and similar professionals can justifiably have one big dumb spend.  One expensive hobby, one thing that they spend way too much money on but it's ok because that's the only thing.  IMO if you're just 33 years old, making $90,000, earning a military pension and loan forgiveness in just 8 years, contributing extra toward retirement as-is, then driving a really nice truck is pretty small potatoes in the big scheme of things.

I'm not saying you should definitely keep the truck, but I would definitely encourage giving yourself some more time before you make a big decision like that.  Best not to make big financial decisions while you're in the midst of pangs of regret.

[MPMD]

Craigy wrote:

Jfleenm16 wrote:

Thanks for that perspective Craigy. You’re right in assuming I’m not a savvy negotiator nor experienced in making large purchases (what gave it away? Me buying the extended warranty?). Going to the dealer and recouping this money ASAP and start looking at refinancing soon

The truck is a 2017 F-250 diesel. Has a lot of bells and whistles and is overly luxurious. Love the truck. I do a lot of boating on my free time and keep a 6000lb boat on a trailer (boat was a gift). The truck makes pulling the boat a dream. I bought the truck with full intentions to keep the thing until the wheels fall off, and hopefully will if I end up keeping it.

Right now I’m a military doc with 12 yrs service (have prior service and did HSCP) doing a general medical officer tour and going into emergency medicine after the tour ends in June 2019. My income will go up by about 15K annually after taxes in the next month or so until June 2019.

Future plans are to retire through the military, have my student loans paid off by PSLF and go to work in the civilian sector in 9 years. Currently contributing to the TSP at 25% of my base pay which is about $1600/mo and have about 40k saved in TSP/IRA/Index funds. I’m 33

I’ve had the Truck now for 3 mo and the lost opportunity cost and thought of not having the money to do other things, i.e. travel have just been eating at me. Hence my initial post.

 

After thinking about. I want to do one of two things: 1)keep the truck, live with the purchase, enjoy the truck and try not to look back. 2) Sell the truck and buy a (reliable as I can get) 10-15K vehicle, which would wipe away the truck debt, but also leave me knowing that I completely flushed 20k to drive a clunker.

Just wondering which decision I will be kicking myself for more for 10 yrs from now.

Click to expand…

Since I’m the only one possibly defending the decision to keep it, I don’t feel too guilty playing devil’s advocate here.   

One more consideration is that the clunker will probably need to be replaced much, much sooner than the 3 month old truck.  The $15,000-$18,000 truck still depreciates, and will quickly become a $5,000 truck and will have various problems along the way.  If you get something that’s truly fully or nearly fully depreciated (i.e., well under $10,000), then the depreciation factor goes away, but you’re still going to be left with a vehicle that’s costly to keep running.  I’m not an expert, but from my limited understanding, a lot of those 3/4 ton trucks are expensive to keep running once they have a lot of miles, particularly the diesels.  You could easily be looking at spending a couple grand a year on parts and labor.  Plus this expense is to drive an old vehicle which you won’t enjoy, and may even cause you stress and trouble when various things go out.

On the flipside, your $54,000 F250 should run relatively trouble free for the foreseeable future.  Unless you just beat the ************************ out of it, pile on the miles, etc (you’ll be doing the opposite since this is a personal vehicle), you should have at least a decade, maybe more, before this $54,000 truck turns itself into a $25,000 vehicle.  With some quick math, that’s under $2,900 a year on future depreciation, which really is a pretty responsible choice, with the *big* assumption that you keep this truck as long as you can and don’t decide to trade it in on a new one in a few more years.

33 and 8 years away from a generous military pension, plus loan forgiveness, plus saving 25% of base to your thrift savings plan is pretty strong, all things considered.  Many docs at 33 still haven’t even finished their residencies at this point.  Also, presumably you’re living on that $90k per year, including contributing toward retirement, which is more than most attending physicians can say.  All in all, you’re living a fairly frugal, responsible lifestyle, and this truck is your one big splurge.

IMO most docs and similar professionals can justifiably have one big dumb spend.  One expensive hobby, one thing that they spend way too much money on but it’s ok because that’s the only thing.  IMO if you’re just 33 years old, making $90,000, earning a military pension and loan forgiveness in just 8 years, contributing extra toward retirement as-is, then driving a really nice truck is pretty small potatoes in the big scheme of things.

I’m not saying you should definitely keep the truck, but I would definitely encourage giving yourself some more time before you make a big decision like that.  Best not to make big financial decisions while you’re in the midst of pangs of regret.

Click to expand...

I don't think that OP qualifies as what we on this forum generally mean when we say "a doc or other similar professional." I am strictly speaking of his finances not his skill, value, service etc.

He makes $90k, which is like being a resident with a spouse who is a grade school teacher.

He has student debt which doesn't have an aggressive payoff plan but he hopes is going to get forgiven.

His net worth is negative.

He has a vehicle that is worth 2/3 of his annual income. That's like a typical ER doc driving a low end Ferrari.

He isn't anywhere close to living like a resident with this purchase.

A $30k truck (which is a 2015 F150 instead of a brand new one) is still a stretch for him.

To the OP: not trying to hate dude. I love trucks like that and hope to have one myself soon. I just want it to be a rounding error on my NW and not a rotting albatross around my neck. We all screw stuff up on here just always trying to improve.

 

[Craigy]

Zaphod wrote:

Craigy wrote:

Donnie wrote:

Jfleenm16 wrote:

After thinking about. I want to do one of two things: 1)keep the truck, live with the purchase, enjoy the truck and try not to look back. 2) Sell the truck and buy a (reliable as I can get) 10-15K vehicle, which would wipe away the truck debt, but also leave me knowing that I completely flushed 20k to drive a clunker.

Click to expand…

The problem is that you can’t afford to make the ~$11k per year truck payments.  The $20k is gone and shouldn’t factor into your analysis.  You are going to flush another $10k on depreciation and $5k in interest on this truck over the next 4 years.  I would get a way cheaper car than $10k if I were you, like ~$3k.  I didn’t drive a car that was newer than 10 years old until I was making mid-6 figures and had three kids.

Click to expand…

He absolutely can afford it, he just probably shouldn’t be choosing to.

Click to expand…

As someone trying to buy a second car (admittedly an SUV which is a slight premium, but safety), it is not easy to find a (safe, reliable) car for much cheaper than 10k all expenses included that isnt well over 100k miles, and way more than 10 years old. I have all of the greater southern california area to choose from, and its still hard. Ive spent several weekends and a couple fruitless trips, and cannot seem to satisfy the boxes. We’re still not in a rush, but its annoying.

Its just totally unreasonable to get an absolute beater or a car you’re more likely to get stranded with for the sake of (I know op is a resident) what is basically a discretionary amount of money per month. A car that is over 10 years old is vastly less safe and far more likely to have mechanical issues. I would say thats even more important as a resident as your time isnt your own.

Click to expand...

Words of wisdom from Zaphod.  For those of you who don't know, southern California is one of the largest used car markets on planet earth.

You know how hard it is to find a nice used truck for $10,000?  Near impossible.  It shouldn't be, but it is.  Everyone else wants one of those, too.  Plus, our poster wants something that will tow his 6,000lb boat.  So in reality you've got to at least double your budget.  And then you're still buying an older, worn out vehicle that probably already needs work or soon will.

On top of the general inconvenience for a young doctor's career, what happens when military doc gets some time off and wants to put his boat in the water, and the clunker truck he bought doesn't run?  Now his free time is spent trying to replace a transmission, or rebuild a diesel block, or replace a turbo or whatever.  That's time lost and money spent for a headache.

This is discretionary money, there are worse things you could do with it.  As long as you don't make several other big discretionary spends on top of it, you'll be just fine.

[Zaphod]

Craigy wrote:

Zaphod wrote:

Craigy wrote:

Donnie wrote:

Jfleenm16 wrote:

After thinking about. I want to do one of two things: 1)keep the truck, live with the purchase, enjoy the truck and try not to look back. 2) Sell the truck and buy a (reliable as I can get) 10-15K vehicle, which would wipe away the truck debt, but also leave me knowing that I completely flushed 20k to drive a clunker.

Click to expand…

The problem is that you can’t afford to make the ~$11k per year truck payments.  The $20k is gone and shouldn’t factor into your analysis.  You are going to flush another $10k on depreciation and $5k in interest on this truck over the next 4 years.  I would get a way cheaper car than $10k if I were you, like ~$3k.  I didn’t drive a car that was newer than 10 years old until I was making mid-6 figures and had three kids.

Click to expand…

He absolutely can afford it, he just probably shouldn’t be choosing to.

Click to expand…

As someone trying to buy a second car (admittedly an SUV which is a slight premium, but safety), it is not easy to find a (safe, reliable) car for much cheaper than 10k all expenses included that isnt well over 100k miles, and way more than 10 years old. I have all of the greater southern california area to choose from, and its still hard. Ive spent several weekends and a couple fruitless trips, and cannot seem to satisfy the boxes. We’re still not in a rush, but its annoying.

Its just totally unreasonable to get an absolute beater or a car you’re more likely to get stranded with for the sake of (I know op is a resident) what is basically a discretionary amount of money per month. A car that is over 10 years old is vastly less safe and far more likely to have mechanical issues. I would say thats even more important as a resident as your time isnt your own.

Click to expand…

Words of wisdom from Zaphod.  For those of you who don’t know, southern California is one of the largest used car markets on planet earth.

You know how hard it is to find a nice used truck for $10,000?  Near impossible.  It shouldn’t be, but it is.  Everyone else wants one of those, too.  Plus, our poster wants something that will tow his 6,000lb boat.  So in reality you’ve got to at least double your budget.  And then you’re still buying an older, worn out vehicle that probably already needs work or soon will.

On top of the general inconvenience for a young doctor’s career, what happens when military doc gets some time off and wants to put his boat in the water, and the clunker truck he bought doesn’t run?  Now his free time is spent trying to replace a transmission, or rebuild a diesel block, or replace a turbo or whatever.  That’s time lost and money spent for a headache.

This is discretionary money, there are worse things you could do with it.  As long as you don’t make several other big discretionary spends on top of it, you’ll be just fine.

Click to expand...

Whats crazy is how the value of trucks hold up. I'd love to have a truck for the random home depot event. But Im not paying 50k (or even 20), and Im not buying one that I could have purchased in high school that now has 280k miles. Its nuts.

[MPMD]

Craigy wrote:

Zaphod wrote:

Craigy wrote:

Donnie wrote:

Jfleenm16 wrote:

After thinking about. I want to do one of two things: 1)keep the truck, live with the purchase, enjoy the truck and try not to look back. 2) Sell the truck and buy a (reliable as I can get) 10-15K vehicle, which would wipe away the truck debt, but also leave me knowing that I completely flushed 20k to drive a clunker.

Click to expand…

The problem is that you can’t afford to make the ~$11k per year truck payments.  The $20k is gone and shouldn’t factor into your analysis.  You are going to flush another $10k on depreciation and $5k in interest on this truck over the next 4 years.  I would get a way cheaper car than $10k if I were you, like ~$3k.  I didn’t drive a car that was newer than 10 years old until I was making mid-6 figures and had three kids.

Click to expand…

He absolutely can afford it, he just probably shouldn’t be choosing to.

Click to expand…

As someone trying to buy a second car (admittedly an SUV which is a slight premium, but safety), it is not easy to find a (safe, reliable) car for much cheaper than 10k all expenses included that isnt well over 100k miles, and way more than 10 years old. I have all of the greater southern california area to choose from, and its still hard. Ive spent several weekends and a couple fruitless trips, and cannot seem to satisfy the boxes. We’re still not in a rush, but its annoying.

Its just totally unreasonable to get an absolute beater or a car you’re more likely to get stranded with for the sake of (I know op is a resident) what is basically a discretionary amount of money per month. A car that is over 10 years old is vastly less safe and far more likely to have mechanical issues. I would say thats even more important as a resident as your time isnt your own.

Click to expand…

Words of wisdom from Zaphod.  For those of you who don’t know, southern California is one of the largest used car markets on planet earth.

You know how hard it is to find a nice used truck for $10,000?  Near impossible.  It shouldn’t be, but it is.  Everyone else wants one of those, too.  Plus, our poster wants something that will tow his 6,000lb boat.  So in reality you’ve got to at least double your budget.  And then you’re still buying an older, worn out vehicle that probably already needs work or soon will.

On top of the general inconvenience for a young doctor’s career, what happens when military doc gets some time off and wants to put his boat in the water, and the clunker truck he bought doesn’t run?  Now his free time is spent trying to replace a transmission, or rebuild a diesel block, or replace a turbo or whatever.  That’s time lost and money spent for a headache.

This is discretionary money, there are worse things you could do with it.  As long as you don’t make several other big discretionary spends on top of it, you’ll be just fine.

Click to expand...

One of the main themes of the whole WCI world is that a 33 year old doc with six figure student debt shouldn't be making financial decisions based on a boat.

 

[Craigy]

MPMD wrote:

Craigy wrote:

Jfleenm16 wrote:

Thanks for that perspective Craigy. You’re right in assuming I’m not a savvy negotiator nor experienced in making large purchases (what gave it away? Me buying the extended warranty?). Going to the dealer and recouping this money ASAP and start looking at refinancing soon

The truck is a 2017 F-250 diesel. Has a lot of bells and whistles and is overly luxurious. Love the truck. I do a lot of boating on my free time and keep a 6000lb boat on a trailer (boat was a gift). The truck makes pulling the boat a dream. I bought the truck with full intentions to keep the thing until the wheels fall off, and hopefully will if I end up keeping it.

Right now I’m a military doc with 12 yrs service (have prior service and did HSCP) doing a general medical officer tour and going into emergency medicine after the tour ends in June 2019. My income will go up by about 15K annually after taxes in the next month or so until June 2019.

Future plans are to retire through the military, have my student loans paid off by PSLF and go to work in the civilian sector in 9 years. Currently contributing to the TSP at 25% of my base pay which is about $1600/mo and have about 40k saved in TSP/IRA/Index funds. I’m 33

I’ve had the Truck now for 3 mo and the lost opportunity cost and thought of not having the money to do other things, i.e. travel have just been eating at me. Hence my initial post.

 

After thinking about. I want to do one of two things: 1)keep the truck, live with the purchase, enjoy the truck and try not to look back. 2) Sell the truck and buy a (reliable as I can get) 10-15K vehicle, which would wipe away the truck debt, but also leave me knowing that I completely flushed 20k to drive a clunker.

Just wondering which decision I will be kicking myself for more for 10 yrs from now.

Click to expand…

Since I’m the only one possibly defending the decision to keep it, I don’t feel too guilty playing devil’s advocate here.   

One more consideration is that the clunker will probably need to be replaced much, much sooner than the 3 month old truck.  The $15,000-$18,000 truck still depreciates, and will quickly become a $5,000 truck and will have various problems along the way.  If you get something that’s truly fully or nearly fully depreciated (i.e., well under $10,000), then the depreciation factor goes away, but you’re still going to be left with a vehicle that’s costly to keep running.  I’m not an expert, but from my limited understanding, a lot of those 3/4 ton trucks are expensive to keep running once they have a lot of miles, particularly the diesels.  You could easily be looking at spending a couple grand a year on parts and labor.  Plus this expense is to drive an old vehicle which you won’t enjoy, and may even cause you stress and trouble when various things go out.

On the flipside, your $54,000 F250 should run relatively trouble free for the foreseeable future.  Unless you just beat the ************************ out of it, pile on the miles, etc (you’ll be doing the opposite since this is a personal vehicle), you should have at least a decade, maybe more, before this $54,000 truck turns itself into a $25,000 vehicle.  With some quick math, that’s under $2,900 a year on future depreciation, which really is a pretty responsible choice, with the *big* assumption that you keep this truck as long as you can and don’t decide to trade it in on a new one in a few more years.

33 and 8 years away from a generous military pension, plus loan forgiveness, plus saving 25% of base to your thrift savings plan is pretty strong, all things considered.  Many docs at 33 still haven’t even finished their residencies at this point.  Also, presumably you’re living on that $90k per year, including contributing toward retirement, which is more than most attending physicians can say.  All in all, you’re living a fairly frugal, responsible lifestyle, and this truck is your one big splurge.

IMO most docs and similar professionals can justifiably have one big dumb spend.  One expensive hobby, one thing that they spend way too much money on but it’s ok because that’s the only thing.  IMO if you’re just 33 years old, making $90,000, earning a military pension and loan forgiveness in just 8 years, contributing extra toward retirement as-is, then driving a really nice truck is pretty small potatoes in the big scheme of things.

I’m not saying you should definitely keep the truck, but I would definitely encourage giving yourself some more time before you make a big decision like that.  Best not to make big financial decisions while you’re in the midst of pangs of regret.

Click to expand…

I don’t think that OP qualifies as what we on this forum generally mean when we say “a doc or other similar professional.” I am strictly speaking of his finances not his skill, value, service etc.

He makes $90k, which is like being a resident with a spouse who is a grade school teacher.

He has student debt which doesn’t have an aggressive payoff plan but he hopes is going to get forgiven.

His net worth is negative.

He has a vehicle that is worth 2/3 of his annual income. That’s like a typical ER doc driving a low end Ferrari.

He isn’t anywhere close to living like a resident with this purchase.

A $30k truck (which is a 2015 F150 instead of a brand new one) is still a stretch for him.

To the OP: not trying to hate dude. I love trucks like that and hope to have one myself soon. I just want it to be a rounding error on my NW and not a rotting albatross around my neck. We all screw stuff up on here just always trying to improve.

Click to expand...

Good points, but I will continue to play devil's advocate here:

For what it's worth, I have a feeling his net worth figure doesn't put a value on that military pension that he is 12 years into earning out of 20.

I would argue being a few years away from loan forgiveness and staying the course is a pretty aggressive payoff plan.

The resident married to a grade school teacher making $90k combined is much worse off than a single guy making $90k.  OP, are you single??  :lol:

And a lot of ER docs buy Ferraris.    This truck is his Ferrari.  It's irresponsible, but he can afford it, and he's otherwise doing well for himself and making good financial choices.

[MPMD]

Craigy wrote:

MPMD wrote:

Craigy wrote:

Jfleenm16 wrote:

Thanks for that perspective Craigy. You’re right in assuming I’m not a savvy negotiator nor experienced in making large purchases (what gave it away? Me buying the extended warranty?). Going to the dealer and recouping this money ASAP and start looking at refinancing soon

The truck is a 2017 F-250 diesel. Has a lot of bells and whistles and is overly luxurious. Love the truck. I do a lot of boating on my free time and keep a 6000lb boat on a trailer (boat was a gift). The truck makes pulling the boat a dream. I bought the truck with full intentions to keep the thing until the wheels fall off, and hopefully will if I end up keeping it.

Right now I’m a military doc with 12 yrs service (have prior service and did HSCP) doing a general medical officer tour and going into emergency medicine after the tour ends in June 2019. My income will go up by about 15K annually after taxes in the next month or so until June 2019.

Future plans are to retire through the military, have my student loans paid off by PSLF and go to work in the civilian sector in 9 years. Currently contributing to the TSP at 25% of my base pay which is about $1600/mo and have about 40k saved in TSP/IRA/Index funds. I’m 33

I’ve had the Truck now for 3 mo and the lost opportunity cost and thought of not having the money to do other things, i.e. travel have just been eating at me. Hence my initial post.

 

After thinking about. I want to do one of two things: 1)keep the truck, live with the purchase, enjoy the truck and try not to look back. 2) Sell the truck and buy a (reliable as I can get) 10-15K vehicle, which would wipe away the truck debt, but also leave me knowing that I completely flushed 20k to drive a clunker.

Just wondering which decision I will be kicking myself for more for 10 yrs from now.

Click to expand…

Since I’m the only one possibly defending the decision to keep it, I don’t feel too guilty playing devil’s advocate here.   

One more consideration is that the clunker will probably need to be replaced much, much sooner than the 3 month old truck.  The $15,000-$18,000 truck still depreciates, and will quickly become a $5,000 truck and will have various problems along the way.  If you get something that’s truly fully or nearly fully depreciated (i.e., well under $10,000), then the depreciation factor goes away, but you’re still going to be left with a vehicle that’s costly to keep running.  I’m not an expert, but from my limited understanding, a lot of those 3/4 ton trucks are expensive to keep running once they have a lot of miles, particularly the diesels.  You could easily be looking at spending a couple grand a year on parts and labor.  Plus this expense is to drive an old vehicle which you won’t enjoy, and may even cause you stress and trouble when various things go out.

On the flipside, your $54,000 F250 should run relatively trouble free for the foreseeable future.  Unless you just beat the ************************ out of it, pile on the miles, etc (you’ll be doing the opposite since this is a personal vehicle), you should have at least a decade, maybe more, before this $54,000 truck turns itself into a $25,000 vehicle.  With some quick math, that’s under $2,900 a year on future depreciation, which really is a pretty responsible choice, with the *big* assumption that you keep this truck as long as you can and don’t decide to trade it in on a new one in a few more years.

33 and 8 years away from a generous military pension, plus loan forgiveness, plus saving 25% of base to your thrift savings plan is pretty strong, all things considered.  Many docs at 33 still haven’t even finished their residencies at this point.  Also, presumably you’re living on that $90k per year, including contributing toward retirement, which is more than most attending physicians can say.  All in all, you’re living a fairly frugal, responsible lifestyle, and this truck is your one big splurge.

IMO most docs and similar professionals can justifiably have one big dumb spend.  One expensive hobby, one thing that they spend way too much money on but it’s ok because that’s the only thing.  IMO if you’re just 33 years old, making $90,000, earning a military pension and loan forgiveness in just 8 years, contributing extra toward retirement as-is, then driving a really nice truck is pretty small potatoes in the big scheme of things.

I’m not saying you should definitely keep the truck, but I would definitely encourage giving yourself some more time before you make a big decision like that.  Best not to make big financial decisions while you’re in the midst of pangs of regret.

Click to expand…

I don’t think that OP qualifies as what we on this forum generally mean when we say “a doc or other similar professional.” I am strictly speaking of his finances not his skill, value, service etc.

He makes $90k, which is like being a resident with a spouse who is a grade school teacher.

He has student debt which doesn’t have an aggressive payoff plan but he hopes is going to get forgiven.

His net worth is negative.

He has a vehicle that is worth 2/3 of his annual income. That’s like a typical ER doc driving a low end Ferrari.

He isn’t anywhere close to living like a resident with this purchase.

A $30k truck (which is a 2015 F150 instead of a brand new one) is still a stretch for him.

To the OP: not trying to hate dude. I love trucks like that and hope to have one myself soon. I just want it to be a rounding error on my NW and not a rotting albatross around my neck. We all screw stuff up on here just always trying to improve.

Click to expand…

Good points, but I will continue to play devil’s advocate here:

For what it’s worth, I have a feeling his net worth figure doesn’t put a value on that military pension that he is 12 years into earning out of 20.

I would argue being a few years away from loan forgiveness and staying the course is a pretty aggressive payoff plan.

The resident married to a grade school teacher making $90k combined is much worse off than a single guy making $90k.  OP, are you single??  

And a lot of ER docs buy Ferraris.    This truck is his Ferrari.  It’s irresponsible, but he can afford it, and he’s otherwise doing well for himself and making good financial choices.

Click to expand...

Craigy I think you might have a real estate agent's definite of "afford."  

[Donnie]

Please do the math guys. Depreciation and repair costs are well known. Edmunds has a true cost to own schedule that lays out annual costs for 5 years for cars based on make and year.

Yes, depreciation and repairs may be similar or even more for a used car compared to a truck. However the $11k per year payment is a serious hit to cash flow, and I imagine is just the tip of the iceberg of bad financial decisions.

[Craigy]

Donnie wrote:

Please do the math guys. Depreciation and repair costs are well known. Edmunds has a true cost to own schedule that lays out annual costs for 5 years for cars based on make and year.

Yes, depreciation and repairs may be similar or even more for a used car compared to a truck. However the $11k per year payment is a serious hit to cash flow, and I imagine is just the tip of the iceberg of bad financial decisions.

Click to expand...

One thing to point out with the edmunds calculator:  it assumes you haven't yet bought the car, in our case, he's already taken most of the depreciation hit.  He's already sunk that cost, that ship has sailed.  So what he needs to worry about is future depreciation, not total depreciation.  If he swapped into another car, he's going to start that depreciation clock all over again.

The last bit is easily the most salient.  IMO keeping this truck might not be horrible, in and of and by itself.  That car payment is pretty steep, but it won't kill him.  But if it's the first of many poor decisions (another new truck, a second boat, giving up on loan forgiveness, buying too expensive a house, etc), it will absolutely sink him, or at least be the start of a series of lifestyle choices that turn into a doc in his 70s working extra shifts just to keep his head above water.

[DMFA]

Craigy wrote:

MPMD wrote:

Craigy wrote:

Jfleenm16 wrote:

Thanks for that perspective Craigy. You’re right in assuming I’m not a savvy negotiator nor experienced in making large purchases (what gave it away? Me buying the extended warranty?). Going to the dealer and recouping this money ASAP and start looking at refinancing soon

The truck is a 2017 F-250 diesel. Has a lot of bells and whistles and is overly luxurious. Love the truck. I do a lot of boating on my free time and keep a 6000lb boat on a trailer (boat was a gift). The truck makes pulling the boat a dream. I bought the truck with full intentions to keep the thing until the wheels fall off, and hopefully will if I end up keeping it.

Right now I’m a military doc with 12 yrs service (have prior service and did HSCP) doing a general medical officer tour and going into emergency medicine after the tour ends in June 2019. My income will go up by about 15K annually after taxes in the next month or so until June 2019.

Future plans are to retire through the military, have my student loans paid off by PSLF and go to work in the civilian sector in 9 years. Currently contributing to the TSP at 25% of my base pay which is about $1600/mo and have about 40k saved in TSP/IRA/Index funds. I’m 33

I’ve had the Truck now for 3 mo and the lost opportunity cost and thought of not having the money to do other things, i.e. travel have just been eating at me. Hence my initial post.

 

After thinking about. I want to do one of two things: 1)keep the truck, live with the purchase, enjoy the truck and try not to look back. 2) Sell the truck and buy a (reliable as I can get) 10-15K vehicle, which would wipe away the truck debt, but also leave me knowing that I completely flushed 20k to drive a clunker.

Just wondering which decision I will be kicking myself for more for 10 yrs from now.

Click to expand…

Since I’m the only one possibly defending the decision to keep it, I don’t feel too guilty playing devil’s advocate here.   

One more consideration is that the clunker will probably need to be replaced much, much sooner than the 3 month old truck.  The $15,000-$18,000 truck still depreciates, and will quickly become a $5,000 truck and will have various problems along the way.  If you get something that’s truly fully or nearly fully depreciated (i.e., well under $10,000), then the depreciation factor goes away, but you’re still going to be left with a vehicle that’s costly to keep running.  I’m not an expert, but from my limited understanding, a lot of those 3/4 ton trucks are expensive to keep running once they have a lot of miles, particularly the diesels.  You could easily be looking at spending a couple grand a year on parts and labor.  Plus this expense is to drive an old vehicle which you won’t enjoy, and may even cause you stress and trouble when various things go out.

On the flipside, your $54,000 F250 should run relatively trouble free for the foreseeable future.  Unless you just beat the ************************ out of it, pile on the miles, etc (you’ll be doing the opposite since this is a personal vehicle), you should have at least a decade, maybe more, before this $54,000 truck turns itself into a $25,000 vehicle.  With some quick math, that’s under $2,900 a year on future depreciation, which really is a pretty responsible choice, with the *big* assumption that you keep this truck as long as you can and don’t decide to trade it in on a new one in a few more years.

33 and 8 years away from a generous military pension, plus loan forgiveness, plus saving 25% of base to your thrift savings plan is pretty strong, all things considered.  Many docs at 33 still haven’t even finished their residencies at this point.  Also, presumably you’re living on that $90k per year, including contributing toward retirement, which is more than most attending physicians can say.  All in all, you’re living a fairly frugal, responsible lifestyle, and this truck is your one big splurge.

IMO most docs and similar professionals can justifiably have one big dumb spend.  One expensive hobby, one thing that they spend way too much money on but it’s ok because that’s the only thing.  IMO if you’re just 33 years old, making $90,000, earning a military pension and loan forgiveness in just 8 years, contributing extra toward retirement as-is, then driving a really nice truck is pretty small potatoes in the big scheme of things.

I’m not saying you should definitely keep the truck, but I would definitely encourage giving yourself some more time before you make a big decision like that.  Best not to make big financial decisions while you’re in the midst of pangs of regret.

Click to expand…

I don’t think that OP qualifies as what we on this forum generally mean when we say “a doc or other similar professional.” I am strictly speaking of his finances not his skill, value, service etc.

He makes $90k, which is like being a resident with a spouse who is a grade school teacher.

He has student debt which doesn’t have an aggressive payoff plan but he hopes is going to get forgiven.

His net worth is negative.

He has a vehicle that is worth 2/3 of his annual income. That’s like a typical ER doc driving a low end Ferrari.

He isn’t anywhere close to living like a resident with this purchase.

A $30k truck (which is a 2015 F150 instead of a brand new one) is still a stretch for him.

To the OP: not trying to hate dude. I love trucks like that and hope to have one myself soon. I just want it to be a rounding error on my NW and not a rotting albatross around my neck. We all screw stuff up on here just always trying to improve.

Click to expand…

Good points, but I will continue to play devil’s advocate here:

For what it’s worth, I have a feeling his net worth figure doesn’t put a value on that military pension that he is 12 years into earning out of 20.

I would argue being a few years away from loan forgiveness and staying the course is a pretty aggressive payoff plan.

The resident married to a grade school teacher making $90k combined is much worse off than a single guy making $90k.  OP, are you single??  

And a lot of ER docs buy Ferraris.    This truck is his Ferrari.  It’s irresponsible, but he can afford it, and he’s otherwise doing well for himself and making good financial choices.

Click to expand...

Define "can afford."  If you're worsening your debt and having to scrape by in other means in order to enable having it, and you think that's "affording" something, then I don't agree.

Look, much love/respect to you as a person, but this is a very bad financial decision.  Financing p much any car is a bad financial decision.  You don't *need* it anyway, so why would you not only go into debt to get it, while its value declines, and you inhibit your cash flow and prevent you from getting out of your other debts and building future retirement investments?  That's 5 pretty significant negatives for the one positive of having the truck. It's not like you can use the "leverage" argument that many of us use to justify our low-interest debt; this isn't even low-interest debt, and it's not like you're investing the remaining funds to out-earn it in the market.

I know we can be perceived as a bit extreme in this forum.  You might think we're ridiculous super-savers, don't ever spend a dime on anything beyond subsistence and toward retirement investing and so forth, but we're not.  We're actually fairly reasonable people (well, at least I am, I think...), and I think you knew this was a bad call before you even made the post.

However, it all comes down to how much you really, really want this truck.  This is probably, in the end, going to be a hole out of which you can dig yourself.  Your net worth and lifestyle will take a big hit - more from the debt you're not paying and investments you're not making than from paying the car note itself - which will, in the end, likely make up $200,000 (from the top of my head) or more from finance charges on the unpaid debt and unearned compound gains on tax-advantaged retirement accounts.  I can show you this math if you like.

So is it worth setting yourself back in both lifestyle and net worth for the truck?  Only you can make that call.  If it is, cool...but you're going to need to know how to assess these decisions for building your future so that you can foresee and adjust for any not-so-great financial choices you need to make in the future.  It's okay not to make the *perfect* call every single time as long as you can understand and manage the consequences...but, I beg your pardon, this is a pretty far-from-perfect call.

[Craigy]

DMFA wrote:

Craigy wrote:

MPMD wrote:

Craigy wrote:

Jfleenm16 wrote:

Thanks for that perspective Craigy. You’re right in assuming I’m not a savvy negotiator nor experienced in making large purchases (what gave it away? Me buying the extended warranty?). Going to the dealer and recouping this money ASAP and start looking at refinancing soon

The truck is a 2017 F-250 diesel. Has a lot of bells and whistles and is overly luxurious. Love the truck. I do a lot of boating on my free time and keep a 6000lb boat on a trailer (boat was a gift). The truck makes pulling the boat a dream. I bought the truck with full intentions to keep the thing until the wheels fall off, and hopefully will if I end up keeping it.

Right now I’m a military doc with 12 yrs service (have prior service and did HSCP) doing a general medical officer tour and going into emergency medicine after the tour ends in June 2019. My income will go up by about 15K annually after taxes in the next month or so until June 2019.

Future plans are to retire through the military, have my student loans paid off by PSLF and go to work in the civilian sector in 9 years. Currently contributing to the TSP at 25% of my base pay which is about $1600/mo and have about 40k saved in TSP/IRA/Index funds. I’m 33

I’ve had the Truck now for 3 mo and the lost opportunity cost and thought of not having the money to do other things, i.e. travel have just been eating at me. Hence my initial post.

 

After thinking about. I want to do one of two things: 1)keep the truck, live with the purchase, enjoy the truck and try not to look back. 2) Sell the truck and buy a (reliable as I can get) 10-15K vehicle, which would wipe away the truck debt, but also leave me knowing that I completely flushed 20k to drive a clunker.

Just wondering which decision I will be kicking myself for more for 10 yrs from now.

Click to expand…

Since I’m the only one possibly defending the decision to keep it, I don’t feel too guilty playing devil’s advocate here.   

One more consideration is that the clunker will probably need to be replaced much, much sooner than the 3 month old truck.  The $15,000-$18,000 truck still depreciates, and will quickly become a $5,000 truck and will have various problems along the way.  If you get something that’s truly fully or nearly fully depreciated (i.e., well under $10,000), then the depreciation factor goes away, but you’re still going to be left with a vehicle that’s costly to keep running.  I’m not an expert, but from my limited understanding, a lot of those 3/4 ton trucks are expensive to keep running once they have a lot of miles, particularly the diesels.  You could easily be looking at spending a couple grand a year on parts and labor.  Plus this expense is to drive an old vehicle which you won’t enjoy, and may even cause you stress and trouble when various things go out.

On the flipside, your $54,000 F250 should run relatively trouble free for the foreseeable future.  Unless you just beat the ************************ out of it, pile on the miles, etc (you’ll be doing the opposite since this is a personal vehicle), you should have at least a decade, maybe more, before this $54,000 truck turns itself into a $25,000 vehicle.  With some quick math, that’s under $2,900 a year on future depreciation, which really is a pretty responsible choice, with the *big* assumption that you keep this truck as long as you can and don’t decide to trade it in on a new one in a few more years.

33 and 8 years away from a generous military pension, plus loan forgiveness, plus saving 25% of base to your thrift savings plan is pretty strong, all things considered.  Many docs at 33 still haven’t even finished their residencies at this point.  Also, presumably you’re living on that $90k per year, including contributing toward retirement, which is more than most attending physicians can say.  All in all, you’re living a fairly frugal, responsible lifestyle, and this truck is your one big splurge.

IMO most docs and similar professionals can justifiably have one big dumb spend.  One expensive hobby, one thing that they spend way too much money on but it’s ok because that’s the only thing.  IMO if you’re just 33 years old, making $90,000, earning a military pension and loan forgiveness in just 8 years, contributing extra toward retirement as-is, then driving a really nice truck is pretty small potatoes in the big scheme of things.

I’m not saying you should definitely keep the truck, but I would definitely encourage giving yourself some more time before you make a big decision like that.  Best not to make big financial decisions while you’re in the midst of pangs of regret.

Click to expand…

I don’t think that OP qualifies as what we on this forum generally mean when we say “a doc or other similar professional.” I am strictly speaking of his finances not his skill, value, service etc.

He makes $90k, which is like being a resident with a spouse who is a grade school teacher.

He has student debt which doesn’t have an aggressive payoff plan but he hopes is going to get forgiven.

His net worth is negative.

He has a vehicle that is worth 2/3 of his annual income. That’s like a typical ER doc driving a low end Ferrari.

He isn’t anywhere close to living like a resident with this purchase.

A $30k truck (which is a 2015 F150 instead of a brand new one) is still a stretch for him.

To the OP: not trying to hate dude. I love trucks like that and hope to have one myself soon. I just want it to be a rounding error on my NW and not a rotting albatross around my neck. We all screw stuff up on here just always trying to improve.

Click to expand…

Good points, but I will continue to play devil’s advocate here:

For what it’s worth, I have a feeling his net worth figure doesn’t put a value on that military pension that he is 12 years into earning out of 20.

I would argue being a few years away from loan forgiveness and staying the course is a pretty aggressive payoff plan.

The resident married to a grade school teacher making $90k combined is much worse off than a single guy making $90k.  OP, are you single??  

And a lot of ER docs buy Ferraris.    This truck is his Ferrari.  It’s irresponsible, but he can afford it, and he’s otherwise doing well for himself and making good financial choices.

Click to expand…

Define “can afford.”  If you’re worsening your debt and having to scrape by in other means in order to enable having it, and you think that’s “affording” something, then I don’t agree.

 

Click to expand...

http://lmgtfy.com/?q=afford

:lol:

If you go by the definition of the word (which is what most people go by as far as words are concerned), if you have the means to purchase or provide, you can afford.

We're all big boys here, we know what we can and can't afford.  What might be a bad move financially is another story.  Lying and saying "you can't afford that" when you really mean "spending that much money is a poor financial decision" cheapens your argument and is also a little condescending to boot.

You can justifiably also say "you shouldn't afford that" all day long, but to say that you "can't" is, again, clearly untrue.

Just my opinion of course, but I do have the definition on my side.   

[Donnie]

Craigy wrote:

Donnie wrote:

Please do the math guys. Depreciation and repair costs are well known. Edmunds has a true cost to own schedule that lays out annual costs for 5 years for cars based on make and year.

Yes, depreciation and repairs may be similar or even more for a used car compared to a truck. However the $11k per year payment is a serious hit to cash flow, and I imagine is just the tip of the iceberg of bad financial decisions.

Click to expand…

One thing to point out with the edmunds calculator:  it assumes you haven’t yet bought the car, in our case, he’s already taken most of the depreciation hit.  He’s already sunk that cost, that ship has sailed.  So what he needs to worry about is future depreciation, not total depreciation.  If he swapped into another car, he’s going to start that depreciation clock all over again.

Click to expand...

I agree, and that’s why I said depreciation plus maintenance may be similar for the truck compared to a used car.  The issue is the $11k per year car payment on a new car.  The issue is not that ongoing expenses for the new car will be substantially more. I’m almost positive OP’s saving rate is not in the double digits.  And no, paying down the car loan does not count as saving.