I drive a rather unmustachian 2012 Infiniti EX35. The car will be 2 years old at the end of Nov and has about 18K miles on it. I generally drive about 10K per year. I bought it new (I know, I know) but didn't finance it, so I have no related loan payments. Current value according to KBB is about $33K. The car is a guzzler at 20 MPG overall and requires premium gas. So I spend about $150 per month for gas. Personal property tax on it is about $1K per year and insurance is about $800 per year. It has all the creature comforts you can imagine but I don't love it with a passion and would be just as happy driving something else. I was planning to keep it for another 5 years (summer of 2018 is when I am planning to retire and move out of the country) and sell it or trade it in as I am planning on getting a small hatchback for when I retire. The thing is, for various reasons, it will make the most sense to buy a newer hatchback at the commencement of my retirement, something that will last me at least 10-15 years in my retirement. So the question is, does it make sense to replace the Infiniti with something more economical now and still buy another car 5 years from now or keep the Infiniti until then? Just to put things into perspective, I have no debts other than my mortgage and save over 50% of my gross income as it is, so any savings realized from replacing the car will not make a big difference in my 'stache. I would incur transaction costs such as sales tax, new registration, etc. which would eat into any potential savings. I am also not sure if the Infiniti would hold its value better than a cheap replacement over the next 5 years.
Thoughts?
I like to break these decisions down to the numbers. Based on what you've mentioned, here's my analysis:
SAVINGS:
I'm not sure how much more premium gas is, but if you get a 40 MPG car, then you'll save $75/mo over 5 years, so about $4500.
Selling the car for $33k and buying a $12k car would net you $18k
If taxes on your $33k car are $1k/year, you would save about $600/year (?), so $3k
TOTAL AVAILABLE FOR INVESTMENT: $25,500
COSTS:
Sales tax on $12k car (IDK what your sales tax rate is)
New registration -- one-time expense, because you'd be renewing your registration on your other car anyway.
TOTAL COST: I'm not sure! Sorry, you have to plug your numbers in here.
I'm going to go out on a limb and guess that your net is going to be at least $23k, which does have a good deal of investment potential. If the car is not bringing you joy to drive it, I say go utilitarian and get something more fuel efficient. My Prius has maintained almost all of it's value over the past 5 years. But more importantly, I don't really need the book value as much as I need the value of having a reliable, fuel-efficient car. I'm not going to sell it any time soon.
I don't know why you feel like you need to change cars when you retire, but you could buy a different car now and sell it when you decide you need a new car; not necessarily tie it to your retirement date.