Buying a 2019 RAV4 hybrid - how to pay for it?

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letsgobobby
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by letsgobobby »

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Slacker
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by Slacker »

Take the Kia and Hyundai twins (Niro / Kona) out for a test drive. The fit/finish/comfort may be better than you expected, especially if comparing to the RAV4 (clearly it won't be as good as the Lexus).

I'm not an SUV fan and when we were shopping for my wife's replacement car, she wanted to try the RAV4 hybrid (2018). We found the Prius to be much more comfortable and have a much nicer appearance inside and went with that one. Sure the RAV4 had a little more space, but that is all it had. I know that you aren't cross shopping the Prius, just wanted to drop an anecdote that I don't think the RAV4 is that great as far as comfort and inside appearance goes...so it should be easy to cross shop with the Niro/Kona PHEV.
rooms222
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by rooms222 »

I would say that the main risk on a first year redesign from Toyota is trim and such. The drivetrain is proven, but my first year Toyota had at least three of four latches, buttons, and covers that broke easily or had to be replaced for safety reason. Most Toyota paid for, but some they did not.

You would pay a car loan off with after-tax dollars.
manuvns
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by manuvns »

i followed the boglehead way , i got a used prius and listed my RX on turo. now RX pays for prius .
emoore
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by emoore »

onourway wrote: Thu Feb 14, 2019 1:38 pm Miles per gallon is a non-linear metric, so the difference between 39 and 50 MPG is actually quite small - about 112 gallons for 20,000 miles of driving, or about $400/year in fuel cost at $3.50/gallon. Not a big enough savings to worry about if you'd rather drive the Rav4.
It's also about 2200 lbs of CO2 per year if that comes into any of the car considerations.
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Sandi_k
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by Sandi_k »

ZinCO wrote: Thu Feb 14, 2019 10:35 am Check the numbers on a single-pay lease as well... Basically pre-pay the lease term with near-0% rates, take any lease incentives from Toyota Financial, and plan to buy out the car at lease end. Or, like I did, view it as a 3-year test drive, giving you the option to return it at lease end should you want to move on to something else.
I can't and won't take on a lease when I drive 25k miles per year.
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Sandi_k
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by Sandi_k »

finite_difference wrote: Thu Feb 14, 2019 1:59 pm I think a 2018/2019 RAV4 will feel like a downgrade vs a 2008/2009 RX 350.

Also, you don’t need to use premium fuel w/ the RX 350, at least newer versions. You can buy a 2015 RX 350 w/ 30k miles for $30k OTD. It gets 25 mpg highway. So, that’s 15 mpg highway difference. If you drive 25k miles per year, that’s an additional 375 gallons or $1300/year. It will take almost 8 years to make up the $10k difference in initial price (if a new RAV4 costs $40k OTD). Then your Lexus would have 230k miles on it vs 200k for your RAV4.

But if you are happy with the RAV4, and will keep it beyond 200k miles, then I think it will be cheaper to buy that new than a used RX 350. Also if gas goes up you’ll save more. The RAV4 should cost less to repair/maintain as well.

The greenest solution would be to get a Prius, EV, or move closer to work so you can commute 5 miles instead of 200 ;)
Thanks - we moved out of urban h*ll to a place on the water - thus the commute. Not moving back into that urban envelope ever again. ;)

Hate the Prius - ugly,ugly, ugly.

I looked at re-buying my current car, just a more recent vintage than the 2010. After 2015, the grill becomes annoying. ;) So it would be a 2015 or prior MY. I also looked at the 450h version, ostensibly rated at much higher mileage (29 vs 21 mpg). Used, that might make sense.

I haven't test-driven the new RAV yet, but I appreciate the thoughts outside the envelope.
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Sandi_k
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by Sandi_k »

manuvns wrote: Thu Feb 14, 2019 2:37 pm i followed the boglehead way , i got a used prius and listed my RX on turo. now RX pays for prius .
My DH would lose his mind over the potential risk and liability. No thanks.
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by aristotelian »

If all goes well, I am hoping to by a Nissan Leaf this weekend.

They are offering 0% 5 year financing. I will walk in to the dealer and walk out with a car, again, if all goes well.

I will then leverage the loan to increase by bond allocation by the same amount. I hate debt, but I love a great deal. I figure the arbitrage will net about $2k in bond dividends over the life of the loan.
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Sandi_k
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by Sandi_k »

OK, so I dug around in the 403(b) program docs, and y'all are correct. It is repaid with after-tax dollars.

See?! I knew that posting my scheme (and taking some heat) would help me assess my options. Thank you!

So that makes a dealership bridge loan a better option, should I want one. I agree that continuing to sock away cash is the best plan, but I think that I need to be prepared for a mechanical failure that could force a faster choice.

Much appreciated!
feh
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by feh »

letsgobobby wrote: Wed Feb 13, 2019 5:48 pm You can get a gas vehicle that gets 40 mpg plus for about half of $40,000. Think used Camry hybrid. Quiet, reliable, firesale prices right now.
+1
Invictus002
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by Invictus002 »

Go for it.
Rudedog
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by Rudedog »

Forget the 401K loan. Loans against retirement accounts are not good, most plans don't allow it.
mortfree
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by mortfree »

Sandi_k wrote: Fri Feb 15, 2019 12:50 pm ... but I think that I need to be prepared for a mechanical failure that could force a faster choice.

Much appreciated!
Friendly reminder if you do fear a mechanical breakdown that you should have a plan for what you will do if it happens closer to work than home or somewhere in between.

Could be as simple as having AAA or having family come rescue you. But always good to know in advance.

I have been commuting 45 miles one way for almost 20 years now.
dknightd
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by dknightd »

Sandi_k wrote: Wed Feb 13, 2019 5:52 pm

My commute is 100 miles a day. 20 working days = 2000 miles per month. Plus two long weekend trips per year = 25,000 miles.

Current car gets 21 mpg. 25,000/21 = 1190 gallons of gas. Premium for the Lexus, at $4 per gallon. $4 x 1190 = $4,762 annually.

New RAV4 gets 39 in mixed driving. 25,000/39 = 641 gallons of gas, x $3.50 (regular) = $2244 per year.

$4,762 - $2,244 = $2518 per year differential.
Honestly I'd look at moving closer to work.

It does not really matter how you pay for your new car.

I'm guessing you are giving up at least 2 hours/day driving! How much do you get paid for those 2 hours?

Only you can balance the cost of driving vs the comfort of driving. Compare it to your annual salary.
If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds.
dknightd
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by dknightd »

Thanks - we moved out of urban h*ll to a place on the water - thus the commute. Not moving back into that urban envelope ever again. ;)

Hate the Prius - ugly,ugly, ugly.

I looked at re-buying my current car, just a more recent vintage than the 2010. After 2015, the grill becomes annoying. ;) So it would be a 2015 or prior MY. I also looked at the 450h version, ostensibly rated at much higher mileage (29 vs 21 mpg). Used, that might make sense.

I haven't test-driven the new RAV yet, but I appreciate the thoughts outside the envelope.
[/quote]

Who cares what it looks like. You will be inside it much more than you will spend looking at it from the outside.

Test drive anything you might consider. Make sure you will be comfortable inside it.
If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds.
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Sandi_k
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by Sandi_k »

mortfree wrote: Fri Feb 15, 2019 6:52 pm
Friendly reminder if you do fear a mechanical breakdown that you should have a plan for what you will do if it happens closer to work than home or somewhere in between.

Could be as simple as having AAA or having family come rescue you. But always good to know in advance.

I have been commuting 45 miles one way for almost 20 years now.
Thanks for your concern - but I have AAA, and plenty of friends/family that would head out to my rescue. Just an inconvenience...
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Sandi_k
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by Sandi_k »

feh wrote: Fri Feb 15, 2019 1:12 pm
letsgobobby wrote: Wed Feb 13, 2019 5:48 pm You can get a gas vehicle that gets 40 mpg plus for about half of $40,000. Think used Camry hybrid. Quiet, reliable, firesale prices right now.
+1
Please read the thread before commenting. No sedan. Aging mom (and me!) with bad knees. CUV preferred.
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Sandi_k
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by Sandi_k »

dknightd wrote: Fri Feb 15, 2019 7:02 pm
Honestly I'd look at moving closer to work.

It does not really matter how you pay for your new car.

I'm guessing you are giving up at least 2 hours/day driving! How much do you get paid for those 2 hours?

Only you can balance the cost of driving vs the comfort of driving. Compare it to your annual salary.
Dude, read the prior comments. Not moving closer to work. I moved *further out* 8 years ago to get away from the urban BS, and to buy a house on the water. I only make the drive 4 days per week.

And no, not 2 hours per day - more like 3. :D
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Sandi_k
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by Sandi_k »

Rudedog wrote: Fri Feb 15, 2019 3:07 pm Forget the 401K loan. Loans against retirement accounts are not good, most plans don't allow it.
Read the comments. My plan does allow it. But it is post-tax repayment, I erroneously thought it was pre-tax repayment.

Continuing to stash cash. May go for dealer low interest rate of 0.9%.
MathIsMyWayr
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by MathIsMyWayr »

Katietsu wrote: Thu Feb 14, 2019 11:29 am
Sandi_k wrote: Wed Feb 13, 2019 10:53 pm
megabad wrote: Wed Feb 13, 2019 7:37 pmIf you pull from 403b you just paying more taxes to put the money back in which seems silly. If you were going to do this, just pay cash....

To clarify, when you repay the 403b loan, you will repay with taxable funds (your taxable income). Unfortunately, there are indeed taxes.
Nope, my organization uses pretax dollars for any loan repayment.
I do not see how this is possible. Think of it this way, if you could both max your pre tax contribution and pay back a loan with pre tax dollars, all high income high savers could use this ploy to increase their tax deferred space every year.
This is a fine example of a proof by contradiction. You contribute with pre-tax money, borrow and spend, pay back with new pre-tax money, borrow and spend, pay back with new pre-tax money,,,,. No tax at all.
Goal33
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by Goal33 »

If you go for the Rav4 try to get it less than 40k, I know things have changed since my July 2017 purchase but it seems to me you’re still talking 20%ish too much.

Personally I wouldn’t bother with the 401k loan since you’ll probably do better or just as well with a loan from Toyota. I recommend keeping it simple with just the auto loan.

Would recommend that after negotiating, try putting the down payment (or a portion of it) with a credit card for the extra points. You don’t need to mention it until you’re ready to make the payment in the finance office.

Let us know what you end up deciding.
CrazyCatLady
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by CrazyCatLady »

Don't have any advice (other than to avoid the 401(k)/403(b) loan at all costs), but this thread made me laugh. We somehow went from your question about the best way to finance your car, to people telling you not to buy a car, buy a different car or move closer to work. I kept waiting for the suggestion that you should walk or hitchhike to work! :D

Enjoy your new car! :sharebeer
steadyhand
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by steadyhand »

+1 for the RAV4 hybrid. I came to the same conclusion a few months back. Hard to beat its specs. Lexus like reliability, Prius like fuel economy, ample space, high seating position only a CUV can offer and promises 600 miles a tank of gas. Has all the latest safety and driving assist tech to boot. I did test drive the non-hybrid 2019 RAV4 and found no issues that bothered me. For long commutes I can see why it would tick a lot of the boxes and my wife has a similarly long commute we need the car for.

To me only your financing aspect is a concern. Perhaps you can opt for the XSE Hybrid or the XLE with some options and get to a price around ~33-34k. Will fell a lot less Lexusy but I think that was not the priority.

Hybrids should come to lots by next month.
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by Kenkat »

You’ve said yourself that you are financially secure, have a 10 year old car with 240k, and want a new vehicle. I think you can buy a new vehicle. It’s not like you are trading in a brand new car. We are all faced with consumption choices every day - you are making a choice, not a reckless one by any means.

When it comes to financing, I am in the minority here in that I think it’s ok to finance a vehicle if you can get a reasonable rate. The downside to saving up cash to buy a vehicle is that you are tying up money in a low returning asset class to avoid future financing. Is it cheaper overall to pay cash for your cars? Probably, but also probably not a significant difference in terms of your overall wealth either.

I would not borrow against your retirement account as you are pulling money out of assets with a higher expected return to pay for the vehicle. So I would look at Toyota financing or local banks / credit unions to determine what type a rate you can get and then decide how much you want to put down and how much to finance.

Debt is just a tool in the toolbox. Used judiciously, it can make sense sometimes.
Old Guy
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by Old Guy »

We just paid $24,000 plus for a regular gas 2018 Rav 4 with 6,000 miles on it. It was used as a pick up car at the dealer. Paid cash. Live in far SE SC.

By the time we learn all the electronics on this XLE it will be time to sell it.
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Sandi_k
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Re: Buying a 2019 RAV4 hybrid - how to pay for it?

Post by Sandi_k »

CrazyCatLady wrote: Sat Feb 16, 2019 8:25 am Don't have any advice (other than to avoid the 401(k)/403(b) loan at all costs), but this thread made me laugh. We somehow went from your question about the best way to finance your car, to people telling you not to buy a car, buy a different car or move closer to work. I kept waiting for the suggestion that you should walk or hitchhike to work! :D

Enjoy your new car! :sharebeer
Hahaha! I'm used to it. At one point I thought of noting that I wasn't about to live in a van down by the river, and bike everywhere. But that seemed snarky. :D
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