This is good logic and for the most part I agree. However not everyone has $50k to liquidate from a savings account or asset and is forced to finance.
This is true, especially for younger shoppers. But what I’m saying is that, if that 30 year old driver just bought a $3k turd, and started putting the $1000/mo. into a savings account instead of sending it to Chrysler Capital (or GM’s equivalent), he’d have the money to buy a new $45k truck in less than 4 years. That beats spending 5+ years to pay for the same truck after-the-fact, and then repeating the cycle. Of course, no one wants to buy the turd when they’re 40, you need to set off on the right foot when you’re young.
So that logic says shop for a used truck that is more affordable. The problem is the used truck market is just as expensive. When I bought my new 2016 half ton I paid $36k after all rebates. Sticker was $43k.
I hear you. When the jobs market (at least locally) tanked in the early 2000’s, and I found myself looking for a new truck, the used trucks were going for almost as much as new trucks. It helped that GM and Dodge were both running “Employee Pricing” at the time, as they were in some real trouble. I ended up buying a new truck for within 20% of the price of a 4-year old version of the same truck.
But that seems to have changed, at least in our local pricing. My latest truck is a 2015 Ram, that I purchased in 2017. I paid a little over $30k for a truck with MSRP around $55k, or thereabouts as I remember it, I didn’t really commit the amounts to memroy. I have the money to easily buy new if I wanted, but why waste it? I got a truck with 9500 miles on it, and was able to order the exact configuration I wanted from Chrysler Capital’s enormous fleet of off-lease vehicles.
If you were able to buy a $43k truck new for $36k, you did very well, I don’t think I’d have gotten the same pricing from my local dealer. Things can vary quite a bit, across this great country.
That said I will play devils advocate. There is a risk in taking $50k out of your liquid accounts. And spending it on a depreciating asset. Things like job loss, unforeseen medical issues, market crash, house repairs, etc could land in your front door uninvited.
This is all true, but I’d be more comfortable having already laid out cash I had, than signing up for 60 months of $1000/mo car payments, in the months preceding such an event. What did those folks do when they lost their jobs, and had a long string of looming car payments in their future, other than forfeit the car and the equity in it? There is enormous comfort in owing nothing, when you find yourself in such situations.