Author Topic: Another car question  (Read 3674 times)

bobcobb7

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Another car question
« on: November 09, 2015, 09:06:48 PM »
Hello mustachians,

So we are getting a later start on saving, but better late than never I guess. I bought a used (thought that was good back then because I was saving by not buying new..ha) 2008 Infiniti sedan with AWD back in 2011. I have about 4k left on the loan and the car is valued around 11k based on KBB. The car has a bit more than 70k miles on it. I need a car for the 2 days per week I go into the office (40 miles roundtrip) and I would say I drive it about 100 miles a week.

Does it make sense to keep this car, pay off the 4k that is left, and drive it as long as I can since it will be paid off? Repairs will likely be more expensive in the future and the car takes a higher octane gas.

If I sell this car and net about 7k, I'll still need to get another car and pay TTL.

Appreciate any input.

RWD

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Re: Another car question
« Reply #1 on: November 10, 2015, 08:49:18 AM »
I assume your Infiniti is the G35x and not the M35x or M45x? What's your loan's interest rate? How much are you paying for insurance (and how might this compare to an economy car)? Do you need AWD?

I estimate you're spending $730/year on fuel. A similar year Honda Fit would be around $400/year. A Toyota Prius could be about $260/year. So you could save $330-470 per year on fuel by switching to an economy car. It shouldn't be impossible to find these or similar cars for $7k or so.

Assuming about 12% depreciation per year, your $11k Infiniti will lose $1,320 in value over the next year while a $7k vehicle would lose around $840. Over five years the Infiniti would lose about $1,890 more in value (or ~$380/year).

Assuming your loan has a year remaining and is at 3% interest, you'll pay about $50 in interest over the next year.

The Infiniti G series cars are extremely reliable, so I wouldn't be too worried about maintenance.

Another thing to consider is your personal negotiating skills. How confident are you at selling your car for what it's worth and not overpaying for its replacement? You could lose some money upfront by making a switch, especially if you buy/sell at a dealer instead of privately.

In total, you're looking at being able to save $760+ per year. Depending on your finances and goals this could be significant or it might not matter to you at all. I personally don't think keeping the Infiniti would be a wrong choice (depending on your finances), but there is money to be saved if you want to go that route.

bobcobb7

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Re: Another car question
« Reply #2 on: November 10, 2015, 12:01:12 PM »
Thanks for the very informative post RWD. Your assumptions are correct. It is a G35x and the interest rate is 2.9%. I'm paying $580 in insurance per year on the car. I'm in the DC Metro area so I prefer to have AWD, although I'm not driving to the office too often and in bad weather I have the option to work from home.

It's safe to say my negotiating skills are lacking and I wouldn't feel too confident in getting the best deals possible if I chose to sell the Infiniti and buy another car. On the other hand, saving $700 plus per year would be a nice savings.

Definitely something to think about.

JLee

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Re: Another car question
« Reply #3 on: November 10, 2015, 12:52:20 PM »
If you're not planning on paying the loan off very quickly, it may be worth refinancing through penfed. You should be able to get 36mo @ 1.99% without any other fees.

sisto

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Re: Another car question
« Reply #4 on: November 10, 2015, 02:11:43 PM »
The AWD is going to cost you extra in the mileage department too. They don't get as good mileage. IMHO, I think you should sell the Nissan and use the profit to buy a Toyota Corolla. It's a great little FWD car that handles well and will get 38MPG on Regular Unleaded fuel. Your insurance will go down on that too.

RWD

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Re: Another car question
« Reply #5 on: November 10, 2015, 02:26:09 PM »
The AWD is going to cost you extra in the mileage department too. They don't get as good mileage. IMHO, I think you should sell the Nissan and use the profit to buy a Toyota Corolla. It's a great little FWD car that handles well and will get 38MPG on Regular Unleaded fuel. Your insurance will go down on that too.

While true, with this specific car (2008 Infiniti G35) there is almost no difference between the AWD and normal version. The AWD G35 is rated for 17/23 mpg and the 2WD one is 17/24 mpg. At only 5,200 miles of driving per year the difference is around $35.

The Corolla is a good car and comparable to the Honda Fit in terms of fuel economy (and hence similar cost savings to my previous post's calculations). The 2008 Corolla is rated for 28/37 mpg for the manual transmission (26/35 for automatic). The 2008 Honda Fit is 28/34 mpg for the manual (27/34 for automatic).

At only $48/month I doubt the insurance could go down significantly, but I suppose it is possible.

JLee

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Re: Another car question
« Reply #6 on: November 10, 2015, 02:30:59 PM »
The AWD is going to cost you extra in the mileage department too. They don't get as good mileage. IMHO, I think you should sell the Nissan and use the profit to buy a Toyota Corolla. It's a great little FWD car that handles well and will get 38MPG on Regular Unleaded fuel. Your insurance will go down on that too.

While true, with this specific car (2008 Infiniti G35) there is almost no difference between the AWD and normal version. The AWD G35 is rated for 17/23 mpg and the 2WD one is 17/24 mpg. At only 5,200 miles of driving per year the difference is around $35.

The Corolla is a good car and comparable to the Honda Fit in terms of fuel economy (and hence similar cost savings to my previous post's calculations). The 2008 Corolla is rated for 28/37 mpg for the manual transmission (26/35 for automatic). The 2008 Honda Fit is 28/34 mpg for the manual (27/34 for automatic).

At only $48/month I doubt the insurance could go down significantly, but I suppose it is possible.

After factoring in the additional cost of registering another vehicle (a $6000 used car in NJ cost me $576.50 for the first year - not sure what it would be in the OP's area), I would lean towards keeping the current vehicle.

bobcobb7

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Re: Another car question
« Reply #7 on: November 10, 2015, 02:50:19 PM »
Thanks all. Appreciate the input.  I'm in MD and it looks like the title fee and tax is $100 plus 6% of the fair market value if I am reading correctly so I should factor that in to the decision as well.

I'm not much of a salesman so I'd probably first take the car to Carmax just to get an initial price and see where that comes in.

JLee

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Re: Another car question
« Reply #8 on: November 10, 2015, 03:02:12 PM »
Thanks all. Appreciate the input.  I'm in MD and it looks like the title fee and tax is $100 plus 6% of the fair market value if I am reading correctly so I should factor that in to the decision as well.

I'm not much of a salesman so I'd probably first take the car to Carmax just to get an initial price and see where that comes in.

~$520 savings up front for not registering a different car:
Invested: $737.17 after 5 years @ 7%

Estimated $33/mo in savings after registering a different car:
Invested: $2,363.98 after 5 years @ 7%

Delta of $1626.85 over five years, or an effective difference of $27.11mo.

It'd be worth $27/mo to me to drive an Infiniti instead of a Corolla, but I'm also corrupted by too much luxuriousness. :)