topic Re: Thoughts on TFS IncomeDriver Notes in Personal Finance

Thoughts on TFS IncomeDriver Notes

Horseshoez — Sun, 16 Apr 2023 14:11:07 GMT

Hello to the collective here.

Last fall I financed a new Toyota Tacoma through Toyota Financial Services (TFS) with an interest rate of 2.49% for 48 months; my reasoning for financing instead of just paying cash for the Tacoma was pretty simple, I figure I'd be losing money by not taking advantage of such a low interest rate. Today I was doing a deeper dive into the TFS web site and saw a link titled "IncomeDriver Notes"; said link brought me to a TFS investment vehicle which, at the moment at least is paying 4.5% interest.

While I'm betting the market at large will perform better than that rate of return, it seems like kind of a no-brainer to put at least some money, say the outstanding value of my Tacoma, into those Notes, kinda-sorta as a hedge. Thoughts?

Re: Thoughts on TFS IncomeDriver Notes

Anonymous — Sun, 16 Apr 2023 15:51:44 GMT

It's probably OK but not sure why that would be a great choice. There are money market/HYSA paying more, and certainly plenty of 1 year CDs paying above 5% (and there the rate is guaranteed) Is there some advantage of the IncomeDriver notes?

Re: Thoughts on TFS IncomeDriver Notes

Horseshoez — Sun, 16 Apr 2023 16:32:07 GMT

@Anonymous wrote:
It's probably OK but not sure why that would be a great choice. There are money market/HYSA paying more, and certainly plenty of 1 year CDs paying above 5% (and there the rate is guaranteed) Is there some advantage of the IncomeDriver notes?

Not sure about money markets, but relative to CDs, the "Notes" offer virtually instant access to your money.

Re: Thoughts on TFS IncomeDriver Notes

Anonymous — Mon, 17 Apr 2023 00:24:26 GMT

@Horseshoez wrote:
@Anonymous wrote:
It's probably OK but not sure why that would be a great choice. There are money market/HYSA paying more, and certainly plenty of 1 year CDs paying above 5% (and there the rate is guaranteed) Is there some advantage of the IncomeDriver notes?
Not sure about money markets, but relative to CDs, the "Notes" offer virtually instant access to your money.

OK, so that's like HYS and Money Market. If you look at Money Market Account Rates in April 2023 | DepositAccounts it goes above 5%, but given your minimalist credit card approach, and depending on the sum, you may find keeping with one lender worth the lower rate vs opening a new savings account.

Re: Thoughts on TFS IncomeDriver Notes

sccredit — Mon, 17 Apr 2023 17:16:08 GMT

For 4.5% I would take an FDIC insured HYSA vs investing in Toyota auto loans that carry no insurance. While the chances TFS would go belly up are very slim it is not a high enough interest rate to justify any risk IMO.