Author Topic: Sell My New-ish Car - Lock In Depreciation?  (Read 1803 times)

umscheidt

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Sell My New-ish Car - Lock In Depreciation?
« on: May 30, 2014, 04:25:42 AM »
Recently found this site, wish i found it a few years earlier.

I'm trying to figure out if selling my 2012 VW GLI with 29k miles on it makes financial sense.  I bought in Dec of 2011, financed 20,500 at .9% (I was so excited at the time!) It's ok on gas, about 24 mpg. Insurance runs about 70 a month, i don't foresee much savings there with a different car.

I still owe a little over 11k on, with payments of 350 a month.  How can I tell if its best to sell it, and buy a used civic/sentra/corolla type for a 3-5k cash?

The car is worth 17,500 as per KBB, I expect to realistically get 15-16k if i sold. If I sold, I could pay off my car loan and buy one of the cars listed above for cash; not having a car payment would be great!

But am I just locking in the depreciation of my current car? I don't want to downgrade into a car with 100k on it that needs brakes, tires etc. I'm single now, but if I got married and had kids in the next few years, I'd certainly want them to be in a safe reliable car.

I recently moved (to stamford, everything is so expensive in CT!), but now drive ~5000 miles a year.

Is there a calculator you recommend using to do the math? What would mr money mustache do?
« Last Edit: May 30, 2014, 04:30:07 AM by umscheidt »

CarDude

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Re: Sell My New-ish Car - Lock In Depreciation?
« Reply #1 on: May 30, 2014, 05:03:55 AM »
Personally, i'd sell it and buy something like a 2008 Accord (in my opinion, the safest reliable car you can get for under 12k). Your Jetta is a safe car, but no safer than the Accord, and Jettas are not known for their reliability or ease of repair. In fact, like most VWs, they're quite the opposite. I'd expect a 7-year-old Accord to need fewer repairs per year than a 3-year-old Jetta, to be completely honest.

randymarsh

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Re: Sell My New-ish Car - Lock In Depreciation?
« Reply #2 on: May 30, 2014, 05:27:58 AM »
I'm pretty sure no matter what you've locked in the depreciation. It's a sunk cost.

You have to compare what effect keeping the car vs. selling it will have on your finances. It sounds like selling would have a positive effect. Worst case is that the new car you buy needs 11K worth of maintenance. Very unlikely.

You can't really count brake pads and tires. Your VW will need those items too. The 100K car you find my have just had those replaced whereas your VW will likely need them in the next 30K(?) miles.

TomTX

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Re: Sell My New-ish Car - Lock In Depreciation?
« Reply #3 on: May 30, 2014, 05:36:28 AM »
I'm pretty sure no matter what you've locked in the depreciation. It's a sunk cost.

You have to compare what effect keeping the car vs. selling it will have on your finances. It sounds like selling would have a positive effect. Worst case is that the new car you buy needs 11K worth of maintenance. Very unlikely.

You can't really count brake pads and tires. Your VW will need those items too. The 100K car you find my have just had those replaced whereas your VW will likely need them in the next 30K(?) miles.

++

I came to write something similar, but you have already covered my points well!