the SO started a new job as a manager in the construction supplies industry a few weeks ago. not long after, he decided that he would like to look into buying a truck, as his company would not be providing him with a company vehicle to haul stuff around as needed.

currently, his commute is about one hour+, or 60-70 miles. between the two of us at the moment, we only own two motorcycles for transportation: a his and hers. he found his commute somewhat brutal and dull after a few days, and i worried that either: a) he would get a ticket speeding out of immense boredom for hundreds of dollars, or that b) he would get too exhausted (biker ‘rider fatigue’ from the elements, body positioning, etc.) and something bad might happen. additionally, we occasionally take our bikes to the race tracks that might be far away, such that hauling a bike on the truck (or on trailers) would be advantageous. so i heartily agreed that a truck was in order for him.

the question next was: a new or used truck ?

due to the rising costs of gas the past several months, owners of larger cars with (relatively) poorer gas mileage (such as trucks and SUVs) have been attempting to sell their vehicles to acquire a more efficient car instead. sites such as craigslist have become super saturated with these cars ‘for sale’ — the supply has been far exceeding any demand. wherever i go, i can expect to spot trucks, SUVs, and vans on the road with ‘for sale’ signs. car dealers also have not been doing so well in trying to sell their new or used larger vehicles.

due to these conditions, dealers have been offering trucks at once-in-a-lifetime deals. the SO and i went over to the nearby chevrolet dealership to see what we could see.

they were selling new 2008 silverados for thousands of dollars less than usual! the normal price would have been about $34,000 if i recall correctly. then they were offering the trucks with the ‘employees discounts’ — meaning that regular consumers would get to pay what the dealerships’ employees got to pay — about $4000 less! that leads us to a $30,000 truck. and then on top of that, there was a special deal for another $2000-$4000 off — leaving us with a brand new chevrolet truck for about $26,000 ! according to the SO, this was an awesome deal that may never come again.

i can see the SO keeping the truck for many years to come. i could also see him using it regularly to haul stuff around not only for work but also for house projects — carrying wood back for our fences and soon-to-be clothesline posts, stones for renovations around the house, etc. he used to have a company truck at his previous job that he used regularly.

however, did he really need a NEW truck? how about an older used one? we discussed the pros and cons.

advantages of new truck:

• wouldn’t have to worry about car falling apart for a long while (unless it was a lemon)
• possibly better gas mileage than older trucks
• take advantage of cheap deals

disadvantages of new truck:

• in debt for many years (5-10?) to pay off new loan for new truck
• must consider additional monthly payments of $300-500
• another source of loan on top of the mortgage and credit card debt to add to list
• value of car will go down tremendously after first year or so of use (depreciation)
• insurance possibly considerably higher — hence, more money to spend, additional monthly payments

i personally advocate making use of used things when possible. a truck of all things should be considered used first in my own book (unless the new version is free or dirt cheap!).

in his online article, why buy a used car?, dave ramsey writes:

“Buying a new car is not something 98% of the people out there need to be doing. It is a luxury item.”

i heartily agree. in don’t let your car own you, ramsey also wrote:

“According to the U.S. Bureau of Labor Statistics, more than 80% of car loans are for longer than 4 years. If you buy the car new, then by the time the loan runs out, the car will have lost between 60% and 70% of its value. That’s beyond ridiculous … it’s stupid! Why would you get a $25,000 loan at 8% over 4 years, pay $598 a month, be stuck with a car worth $8,750 when the loan is done … and think it’s a smart idea?”

yes indeed — why?? he makes a good point.

advantages of used truck:

• one time payment from existing savings, won’t worry about monthly payments!
• cheaper insurance payment!
• mileage only slightly ‘worse’ (1 or 2 mpg)
• won’t have to worry about dents and dings as much with the wood and stuff that would get hauled around on it!
• it could be like a cool, retro thing!

the SO found a used white chevy truck that was an awesome deal, in great condition, and from a fellow member of our motorcycling communities. about a dozen years old, it was for sale for $4000 originally, if i recall correctly. he bought it for $3700! what a deal.

$3700, plus future costs for tune-ups, registrations, insurance, and a bit of paint. in the end, i suspect about $5000-5500 ? and we both like the truck — the way it sounds and looks and its usefulness.

..not having to pay off about $20,000 plus interest if a brand new truck was bought. $20,000 that could be used towards mortgage payments, other existing debts, or savings. not bad at all.

how can you too find a used car? dave ramsey lists a few additional resources in his article noted above. a quick google search for ‘used car sites’ should give you many more leads.

money lesson of the day: don’t play an unnecessary debt game! good luck!

what about you? have you had to make a similar decision lately (if not with cars, with some other large purchase)? what did you decide, and how? are you content with your decision today?