Truck Decision

So I need to make a decision regarding my truck and possibly getting a new one. I need some wake world opinions please.

I currently have a 2005 Avalanche with 82,xxx miles on it. I have an aftermarket "warranty" on it that is good to 100k miles. I put warranty in "" because it sure doesn't seem to cover much. This past weekend I was in Steamboat Springs Co. My truck broke down. Basically the throttle body and some wiring harnesses related to it went bad. The truck went into limp mode and was pretty much undrivable. I had to get the truck towed back to Denver which was a 3 hour tow truck ride. LUCKILY I have roadside assistance and the tow was free. I get it to the dealership today and to not only is the throttle body bad my front axle differential is leaking. My "warranty" covers some of this cost but I am still out $511. Also my power steering pressure hose is leaking and one shock is leaking. If I get everything fixed it is going to cost me $896.

So here is my dilemma. My buddy is the sales manager at this dealership. I can trade my 05 Avalance in and get a 2011 GMC Sierra for $60 more a month if I put $700 down. Full warranty etc.... It isn't quite as loaded as my Avalanche but it is 6 years newer, has the 6 speed transmission (will be MUCH better for towing the boat). It has the new 5.3L engine in it opposed to the old 5.3 my Avy has. It has bluetooth, rear view camera, trailer brake controller, TPMS sensors, and a transmission temp gauge. These are all things my Avy does not have.

My Avy has leather, bed cover, side storage compartments, and a flat bed (no humps for the wheel wells) I am kind of torn on what to do. The full warranty is VERY appealing. Also once my truck hits 100k the value is going to plummet. Right now he is giving me 1k over what I owe on the Avy and that is with 2 sizable dents in the rear quarter panel from backing it into a post.

Oh yeah this is kind of a big thing the GMC would be a lease. If i decide to buy the GMC when the 39 month lease is up it would cost me 21k. Sticker on the GMC is 39.7k.

My buddy is bending over backwards to make this deal as favorable to me as possible so I am either keeping my truck or getting this GMC so I am not going to be looking at any other brands.

Thoughts? and Thank you!

No brained... do the deal.

Wait, so your selling your truck, getting out of the payment, and (essentially) getting 1k ... then going to lease a GMC for 60$ more than your previous payment? Then your going to make 39 payments and still owe 21k dollars?

What was your original payment?

I guess I'm confused.

It's all about wants.Not needs.When someone wants something,they want to hear why they should buy it.If you look at this from the outside,all you see is delaying the same stiuation with a higher payment.Do what you think is best.That way YOU can learn from your decision.

based on your current truck mileage/year...you may run into some mileage constraints on the lease??? how many miles r they giving you? most of the time buying at the end of a lease isnt' the best "move" fyi. The way I look at leases ,is it's great for low mileage drivers who want something a little more expensive than they can afford, and wants a new car every 2-4 years. IF it was me, I'd look at buying a low mile 2010/2009 and finance for 4-5 years. ...u can prolly find a better deal.

That's a tough decision. Once you have an Avalanche, it's really hard to go to a pickup. I traded my '03 Av in on my 07.5 duramax 3 1/2 years ago and I still miss it. They ride nice, they have the bed cover, the toolboxes, etc, they really are great "trucks". Why not look at a new Av? How much longer to pay off your current one? I had to put a transmission in my Av @ 70k miles so you are doing better than I did.

Also, are you brand loyal? That new F150 Eco Boost is really perfect for our altitude. That Eco Boost will blow the doors off of the GM 5.3 up here (and at sea level) and Ford has some pretty good incentives going right now. Might take a look at those.

I'm sure my thoughts on the matter will be unpopular, but you have a almost brand new truck that needs a few minor things. Shocks are like $50 each if you get good ones (probably $20 or less for cheapies) and should take an hour or two to install all 4. Power steering pressure hose shouldn't be more than $20-$30 and should take all of 10-15 minutes to replace. Differential leak is $10-$20 seal. If it's an axle seal it could be an all day job but if it's a pinion seal that's a quickie 30-60 minute job depending on the axle and shim vs crush sleeve, etc.

Personally if you want a new truck I would say pay cash. it makes no sense to me to pay interest on a car/truck. Big waste of money, especially since you already have a new truck that I would hope is paid for after 7 years or if you bought it used it should be paid for or darn close to it. You're talking less than one new truck payment in repairs. Seems like a no brainer to me to keep what you have now unless it just plain won't do what you need from it as far as towing or seating capacity, cargo space, etc.

I won't comment on other aspects but your two of your points about the financials are being thought about in the wrong way. If it costs your $60 more a month in payment, but you have to pay for more years AND with a lease and you aren't paying down on the principle of the loan any, you are going to have a lot more cash outlay. Also the value of the truck will not plummet once you hit 100K, because likely it has already plummeted and magically when you strike 100K isn't going to make a difference. Depreciation slows down as the vehicle ages so as you approach 100K and pass it, the value will fall at a slower and slower pace. Play around with one of the price guides and you can see that.

If you want a new truck and can afford it, go for it. But financially it's going to cost you a boat load more. Good luck.

Originally Posted by acurtis_ttu

based on your current truck mileage/year...you may run into some mileage constraints on the lease??? how many miles r they giving you? most of the time buying at the end of a lease isnt' the best "move" fyi. The way I look at leases ,is it's great for low mileage drivers who want something a little more expensive than they can afford, and wants a new car every 2-4 years. IF it was me, I'd look at buying a low mile 2010/2009 and finance for 4-5 years. ...u can prolly find a better deal.

I agree with this. Leasing isn't a great option for most drivers. It's kind of like renting a house, yeah it's cheaper at first, but you really have nothing to show for it and if you buy in the end you then probably pay more than the blue book on the car anyways. THe depreciation on brand new vehicles is huge. You could probably pick up a 08-10 for less with more options than you would pay in a lease.

How much do you owe on the Avy?

There aren't enough details here to definitively say whether this is a smart move or not. How much longer until the Avalanche is paid off? Even without that information it doesn't sound like a good move from a purely financial perspective. You will be paying rental fees on the new truck for 3+ years to turn around and likely have to take out a loan if you want to buy it at the end of the lease for another 3-5 years.

Most of the "new" vehicles I buy for myself are comparable to the Avalanche that you're writing off as worn out and fully depreciated. That's the best point to buy a vehicle IMHO and you already "own" it (At least part of it). Learn how to wrench on it a bit as Cory D suggested and you can save yourself a pile of cash. Find a friend who is mechanically inclined with some tools and do the shocks and power steering hose yourself.

BTW "leaks" aren't necessarily a big deal unless it's hemorrhagic all over the place. Me and friends have driven 10s of thousands of miles with transmission, engine and differential "leaks" without issue. Check the fluid levels regularly and top off as necessary and don't worry about it until it's accumulating in measurable quantities on the driveway or all over the undercarriage of the vehicle on the highway. If it's something easy then go ahead and fix it. If major teardown is required to address it then just let it ride and keep an eye on it.

I am a loan officer at a bank and this does not sound like a good deal... you are paying MORE per month to "rent" a vehicle for 39 months.... then you are going to have to finance the 21k before you even own the vehicle...

not a good deal in my eyes...

If it were me I would find a new truck with 0% financing or find a used truck that is cheaper and meets your needs.... those are the two best ways to vehicle ownership... look around for financing but usually the dealership will offer some good options

Originally Posted by Jeff

BTW "leaks" aren't necessarily a big deal unless it's hemorrhagic all over the place.

Sorry, I let spellcheck in Google Chrome fix that incorrectly. Should have been hemorrhaging.

Okay the Avy is paid off in June 30th 2014. I have had it less than 2 years. So there are roughly the same amount of months on my truck loan and the lease. My current payment is $406 a month. The lease is $471 a month so it is actually $65 more per month. The lease is at 0.65% interest so almost all the $ I pay is going towards the principle of the truck. $37,5xx is the sticker on the truck (I thought it was 39.7 but I just checked) $471 x months is $18369. 37,500 - 18369 is $19131. GMC tacks on a $2500 fee to buy the truck when the lease is up but I am told they lower this a lot of times. That is how it comes to 21k to buy the truck at the end of the lease. So really I am not paying all that much more for the truck than if I buy it right now at 0% interest. I can go the 0% interest route for 72 months but it bumps my payment up to $550 a month and that is A LOT harder for me to swallow.

Tim I currently owe $14,9xx on the Avy. I figure it like this. I paid 19k for the Avy in June of 2009. He is offering me 15,900 on trade in on the Avy PLUS he is fixing all the stuff that is currently wrong with it including the engine work and the 2 dents in the rear quarter panel. I was given a quote of $8xx to fix the dents so 15,900+896+800 is $17596. I will have just driven the Avy for almost 2 years and I lose $1404 roughly on it.

I am pretty torn as to what route to go. As for the mileage on the truck I am not worried about the 12k mile a year limit. Currently there are 4 vehicles at my house for 2 people. Also I used to tow round trip 130 miles to the lake last year and this year I would say round trip is less than 1/2 mile.

Thanks for all the opinions it really does help with my decision!!!

Seems I'm the only person telling you to "just do it." Here's my thinking:

I don't care how a person paid for their car (finance, lease, or pay cash), if they are behind the wheel, they are losing money. I love how people who pay cash for cars always want to lecture those who don't. If you paid cash, you are still losing money. You just don't realize it because you're not making a payment. But that car is deprecitating every day. Congratulations, instead of making a payment, you put your money into a depreciating asset. Is that really that much better??

So I look at this way, a car is a utility, juts like electricity or cable. How much I'm willing to pay for cable may be different that my neighbor. Cars are utilities too. How much I'm willing to pay for that utility may be different that another guy. The guy who paid cash for his truck is paying too... he just won't realize it until he sells the asset. But let's say his 5 year old truck is depreciating at $300/mo. You will be paying $470/mo. Sure it's more, but you have a newer truck and a warranty to boot. Just like my cable bill is more than my neighbors because I have HBO and the Sports Pkg.

So the key is... decide how much you are willing to pay to have the utility of a car. Then just accept the fact that you will be paying for that utility forever.

If this truck is within your budget for transportation, then go for it. If not, then fix your current truck. It's that simple.

I'm kind of like you DBC, why pay $406 a month for another 3 years on a truck with 82k miles when you can drive brand new for $60 more a month. At some point the transmission is going to go out on that Av from towing with it and that will be another $3k (which if that wasn't a big deal, this thread wouldn't exist).

The difference between paying cash and financing a car is interest. True, you are buying a depreciating asset, but at least you are not paying money on top of that. Also buying a new car is something that I think is ridiculous. The hit you take on a new car is almost never what a warranty will save you (e.g. The money you save by buying used, should be more than enough to fix any problems that may occur). That being said, I'm glad that there are people out there that think buying new cars, or leasing is good for them, because that means there are used cars for the rest of us.

Originally Posted by ixfe

I don't care how a person paid for their car (finance, lease, or pay cash), if they are behind the wheel, they are losing money. I love how people who pay cash for cars always want to lecture those who don't. If you paid cash, you are still losing money. You just don't realize it because you're not making a payment. But that car is deprecitating every day. Congratulations, instead of making a payment, you put your money into a depreciating asset. Is that really that much better??
...
The guy who paid cash for his truck is paying too... he just won't realize it until he sells the asset.

Every vehicle I've sold has brought me more than my purchase price + whatever I've put into it, excluding normal maintenance and wear items (oil changes, tune ups, tires, etc.). It's a choice to put your money into something that you'll never recover your costs (a 5 year old truck, or any newer rapidly depreciating vehicle). I drive old vehicles because they're simple, reliable, have much more attractive styling than new cookie cutter vehicles, and have already depreciated to about the lowest they will go. Some will appreciate in price as they are rare or desirable (most of my daily drivers over the years have been 60s cars).

I won't take a loss on a vehicle. I buy at bargain prices and only buy if I'm sure I'd be happy driving that vehicle until I die. Since I'm content with what I have, even if I may want to sell it and get something different, I never feel the need to sell at a loss and can wait for the right buyer at the right price if I must sell one to get another.

In the end its up to you... If it were me I would try to pay off the truck and drive it until things started going wrong... Is the transmission going to go out so just because you tow a boat? No not if you have taken care of it. But if you are the type of person who just wants to drive a new vehicle so you don't have as many worries about things breaking down and such then go for it....

I will still stand by my statement of you will NOT own this vehicle for the life of the lease....

Right now I am leaning towards doing the lease. You are probably right Pete I will get rid of it after the 39 months. I LOVE having warranties as I am pretty hard on stuff.

Can he not hook you up with a new Av?

Unfortunately he can't. He is at a GMC Buick dealership so he can't do the deal on a new Avy. He said he can get one of his buddies to hook up a new Avy but the deal isn't going to be nearly as good. This just happens to be GMC truck month and the terms on their leases are just better than the Chevy leases right now even though they are basically the same company.

Kind of funny but I was watching the news last night and I see a commercial that says that it's "Ford Truck Month" and then 2 commercials later there is one for Chevy that says it's "Chevy Truck Month" and then the final commercial before the news comes on says that this segment is "sponsored by Ram Truck Month". Apparently March is just plain old "Truck Month"! LOL!
http://www.chevrolet.com/offers/?offer=truck-month

Every month is truck month. They have similar incintives every month of the year, and tell you they are the only ones and that they end at the end of the month. They just don't tell you almost the same deal starts at the start of the month too. That's how they hook you, just like gyms that run monthly specials.

I am going to have him contact one of his buddies at the Chevy Dealership and see what they can do an a new Avalanche.

My buddy got my repair bill down to $300 including an oil change so I drove my Avalanche home! I still have to do the shock and pressure hose but like someone mentioned in this thread a shock is $50 and I found the hose on ebay for $20. As soon as I got back in my avalanche I realized I would never have been happy in the GMC Sierra. Thanks again to everyone for their opinions and advice!

Glad to hear he hooked you up man! I think you would be happy in the GMC, just not as happy as with an Avalanche but that is just my opinion. The ride/comfort of the Av is so much nicer than the 1/2 ton pickup, just hard to compare. It's the same cab, just better ride. Good luck with the other repairs!

I think you made the right decision... yeah things break but as long as they are this cheap it doesn't justify selling the vehicle...