In 2025, I modeled purchasing a $45K new car, taking out a $31K loan. In the Personal Property Annual Expense Metric, it reports "Purchase Cash Required" as $11,472 for 2025
Assuming this is the cash needed for the car's down payment (it is not referenced in 2026), why is it not $14K? What am I missing?
Also, it is not entirely clear to me where to model the ongoing car expenses, such as insurance, repairs, etc. Do those expenses go in Personal Property Operating Costs, or in "Phased Expenses?"
TBS
ADDENDUM: I notice that even though I have the purchase price of the car as $45K on the "Property Info" tab, the purchase price is listed as $50K on the "Cash Flow Summary" tab. On the "Cash Flow by Property" Tab, the purchase price is correctly listed at $45K.
Quick answer (without much thought): it may be the difference between today's dollars & future dollars.
@tbsinma Hi, I took a quick look at this. Since you shared a few #'s, I will as well.
Your plan starts in 2025 and you indicate that you are purchasing 2 vehicles in 2025, one for 42K and one for 8k. For future purchases (occurring in the plan start year and beyond), Pralana uses the amount you enter in the Current Market Value field, inflated as applicable, as the purchase price. Since these are both purchased in 2025, the purchase prices are 42K and 8K, totaling 50K which is what shows on the Cash Flow Summary (all properties). For this vehicle, 42K minus (now) 32K loan proceeds = 10K purchase cash required.
The 45K you entered as "Cost Basis for Assets You Currently Own" is not applicable, and is ignored, since you did not already own this property as of plan start. The popup tooltips on the fields names should add some clarity.
This reminds me of an item that needs to be on the 'start a new plan year' checklist: Properties originally entered as purchased in the 'future' (e.g. 2025) will suddenly become purchased in the 'past' when the plan start year is changed to 2026.
As for operating expenses, the 3rd tab on the Personal Property page is "Operating Costs". On the amounts tab, there are 2 cost categories already defined: property taxes and insurance. On the Categories tab, you can define additional operating cost categories like 'Gas', 'Maintenance and Repairs', etc, then enter the annual amounts on the Amounts tab.
Hope this helps,
Charlie
@cstone Thanks so much, as always. I have updated the numbers following your explanation and I now "get it." Slow and steady.
My only other observation is that PRC assumes loan payment is for the entire 12 months of the acquisition year, when in fact the car was purchased in July. But I can fix this in the next year, I think. And, I appreciate that in a 25 year projection, it matters little. TBS
@cstone I cannot figure out this PRC for a property I bought last year. There were two listings - with and without 2 adjacent lots - and I bought the package which valued the home and land at $932k and each of the lots at $75k. Now this was a "deal" because the listing agent was a moron (advertised off-grid but has 200a service) and it was under several feet of snow - the two parcels are _assessed_ at $206k each and and worth closer to $300k in a "normal market". I can model the house as a rental property but I'm dying on how to model Parcel A and Parcel B. The "Purchase" (Price/Closing/PRC) seems to using the "Current Market Value" and not the "Cost Basis for Assets you Currently Own" field. Is that intentional? I don't know that it makes a difference in the future calculations but seeing this monster cash flow in 2025 for something that didn't happen is bugging me.
I was able to get that bolus of negative cash "purchase price" out of last year by moving the acquisition date a couple of years prior. Not sure what the impact will be, but when it was in 2025 is drained my 401K to cover it so wasn't good. 🙂
@refugio Purchase cash required only comes into play if the property is purchased in the plan start year or later. If it was purchased prior to the plan start year, purchase cash required is not relevant.
Important note: There are different required/applicable input fields for properties purchased in the past vs the future. If you change your plan start year from 2025 to 2026, properties that were 'future' purchases become 'past' purchases. When you change the plan start year, please review all property and rental property purchases.
See also this thread for tips on updating the plan start year: Best Practices for Updating your Plan Start Year
See also this thread for tips on updating the plan start year: Best Practices for Updating your Plan Start Year
Ah - adjusting the Plan Start Year was indeed helpful when dealing with that bolus in 2025, but it also killed the Loan that originated in that period. I recreated it, but it might be worth a note in the UM in the 2nd paragraph of the Loans section.
