Selling our 2022 Kia Niro EV; open to input

[EchoStache]

We currently, temporarily,  don't need a 2nd car, so this car is not being driven.

Hindsight is 20/20 and I can't change the past, so I want to focus on the optimal solution today.

We owe $27k and pay $850/month for the car including insurance, so it will cost us ~$7k to keep it for the year, and we will owe ~$20k by the end of the year with $850 monthly cost continuing.

It will cost us $7k to sell the car. 

So financially, it is a wash this year on out of pocket cost to keep or sell.

Main reason for selling:  the car does not serve our needs well for probable periodic long trips of 1-4 days of driving, until we retire in 8+ years.  We will replace with a PHEV for a total cost of not more than $13k when the need arises for a 2nd car which won't be until next year.

So I am down to two choices:
January 2025
1) Owe $20k on an EV that doesn't suit us well, $850 monthly cost continues until paid off, may not need 2nd car yet
2) Buy a $13k PHEV that meets our needs much better(if we need it by then).

Carvana is offering us just under $20k.  Bringing the car in to CarMax Monday for in person appraisal where they gave us a range of $18-$24k.  The car is in flawless, like new condition, so the $7k cost to get rid of the car is worst case scenario so far.

Just thinking out loud to the forums to see if there is a more optimal solution or option. 

[Fru-Gal]

Remember that only since the pandemic has it been the case that people made money selling their used cars. A car is a depreciating asset, never an investment. You were going to lose money on a new car anyway.

[EchoStache]

Remember that only since the pandemic has it been the case that people made money selling their used cars. A car is a depreciating asset, never an investment. You were going to lose money on a new car anyway.

I'm not the slightest bit surprised that we can't sell it for what we owe:  we put 0 down and have made the minimum payments since 0.9% financing.  If this car had longer range, charged faster, and had a super reliable charging network(such as Tesla), we would probably keep it.

[JAYSLOL]

You’ll get a lot more for it selling privately if you can cover the difference out of pocket.  Personally I wouldn’t keep a car that expensive if it wasn’t a need providing value as the perfect daily driver, so since it sounds like it isn’t, I’d sell it off

[bacchi]

Agreed that a private party sale is better for all. Offer to sell it via Key Savvy so that someone can take advantage of the tax credit.

[RWD]

I don't really understand how you're doing your math. The cost of owning a car has [almost] nothing to do with what the payment is. Your fixed costs are registration/taxes (depending on timing you might not save anything here by selling), insurance, depreciation, loan interest, and time-based maintenance. Anything you put towards the principal of your loan you'll get back when you sell it so that part doesn't matter for sale timing other than some amount of opportunity cost. Since you are upside down on the loan right now the opportunity cost is actually in your favor to keep the car.

My rough estimate of the cost to keep your Niro EV for a year is $2.8k + insurance. $2200 depreciation, $200 loan interest, $300 registration, $400 maintenance. Subtract $300 for opportunity cost (because selling would decrease your available capital). You didn't give a breakdown of how much your insurance was, but I'm guessing the total still comes out to about half of the $7k number you came up with. Also note that if you remove a car from your policy the insurance cost for your remaining vehicle will likely go up slightly (you can usually figure out by how much ahead of time by playing with the online system).

Another factor to consider is if your state charges sales tax on used vehicle purchases. This could easily be $1k +/- penalty for switching vehicles. Isn't your other vehicle already capable of road tripping? Do you really need two road-trip capable vehicles?

It may still make sense to sell, but don't think you're saving yourself $7k by doing so.

[AccidentialMustache]

If this car had longer range, charged faster, and had a super reliable charging network(such as Tesla), we would probably keep it.

Has Hyundai announced when you'll be able to use Tesla's network? It should be coming sometime.

I already have my official adapter reserved, but I'm not scheduled for shipping until June. I already have the software update to let me use superchargers -- just need the physical plug converter.

Solving one of the three may not be enough, but... to be honest it is the biggest problem of the three, at least for me in the midwest.

If you want to do a full numbers analysis, don't forget to offset gas savings of using the EV instead of the ICE for daily driving, presuming you can charge at home.

[EchoStache]

Agreed that a private party sale is better for all. Offer to sell it via Key Savvy so that someone can take advantage of the tax credit.

I thought private party wouldn't work since it can be bought for $4k less from a dealer, but I'll take a look at Key Savvy depending on what CarMax offers.  Thanks for the suggestion.  These seem to be selling for $22-$24k from dealers.  If CarMax gets us above $20k it may be worth it.  At best, it looks like I might be able to list it for $22k for private sale.

[EchoStache]

I don't really understand how you're doing your math. The cost of owning a car has [almost] nothing to do with what the payment is. Your fixed costs are registration/taxes (depending on timing you might not save anything here by selling), insurance, depreciation, loan interest, and time-based maintenance. Anything you put towards the principal of your loan you'll get back when you sell it so that part doesn't matter for sale timing other than some amount of opportunity cost. Since you are upside down on the loan right now the opportunity cost is actually in your favor to keep the car.

My rough estimate of the cost to keep your Niro EV for a year is $2.8k + insurance. $2200 depreciation, $200 loan interest, $300 registration, $400 maintenance. Subtract $300 for opportunity cost (because selling would decrease your available capital). You didn't give a breakdown of how much your insurance was, but I'm guessing the total still comes out to about half of the $7k number you came up with. Also note that if you remove a car from your policy the insurance cost for your remaining vehicle will likely go up slightly (you can usually figure out by how much ahead of time by playing with the online system).

Another factor to consider is if your state charges sales tax on used vehicle purchases. This could easily be $1k +/- penalty for switching vehicles. Isn't your other vehicle already capable of road tripping? Do you really need two road-trip capable vehicles?

It may still make sense to sell, but don't think you're saving yourself $7k by doing so.

We will need a 2nd car when wife resumes work full time.  It's *possible* this could be as early as September but more likely sometime next year.  We will both be traveling long distances a few times/year to our work locations over the next 8 years or so.

In a way I think risk reduction is a motivator for me. In other words, in the worst case scenario of my wife being out of work for 1.5-2 years, this reduces our monthly out of pocket cost by $840 the entire time.  That's a lot of money we can be contributing into an IRA that otherwise may not be able to due to our reduced income.  I'm confident I can max my 401k and IRA, but not sure if I can swing hers as well if she is out of work.

That big payment is a huge thorn in my side currently.   That's where I was going with the math.  I have to spend over $7k this year to keep the car.  This is money that I cannot save or invest.  If I sell the car, I also come out of pocket $7k this year to do so.

[EchoStache]

The least I could spend for a reasonably decent PHEV were I to need one today looks to be about $7k.  This would be for a 2013 Chevy Volt with 63k miles.  I also found one with 20k miles for ~$9,000.  These are total cost after taxes, title, registration. 

Assuming deals like this can be found in the future i.e. early next year or perhaps even sometime late 2025, should I keep the 2022 Kia Niro EV or unload it and just get the best deal possible when we need a 2nd car?

Con: I would have to write a check for $6300 today to sell the Kia.  This cash is recouped in less than 8 months with no car payment/insurance. 



Note: the main reason we owe more than the car is worth is that we put 0 down and did not apply the $7500 tax credit to the purchase.  We used the money for investing/saving since we have 0.9% financing.  Mathematically, factually, the $7500 I did not put towards the car at the time of purchase is now worth much more than that in the market.  Paying this credit towards the car balance now gives us a cash payment of $1250 if we sell the car.  I just haven't been able to make sense of paying any more than the minimum with even cash paying more than 4% above the loan interest rate.  This muddies the water even more in that I'm not really upside down on the car at all when you consider the tax credit funds that got invested.

I wish I could add a poll to the thread lol!

Current offer for the car from Carvana has been bumped slightly to $20,200.  Will it go up or down from here in the next 6-8 months as I pay the loan balance down.  ???

[bacchi]

Sell it.

You don't need it, it's depreciating, and you can afford to buy a replacement anytime, even if you have to shell out a bit more. If you have the need for another car in September, you can always rent one if it's a one time deal. Delay buying a 2nd car for as long as possible.

[iluvzbeach]

Absolutely sell it. Barring some wild, unforeseen circumstance (i.e. pandemic), the car will be worth less next year. Cut your loss and sell it now.

Then, when it’s time to consider a replacement vehicle, go with a less expensive, low mileage used car.

[EchoStache]

The initial offer with Carvanna expired.  I updated and its back to $19,800.  Uploading documents for sale.....

[EchoStache]

Sale pending; pickup date 5/21.

[Fru-Gal]

Nice!

[EchoStache]

Whoops, forgot to report that Carvana came and got the car on 5/21 as planned.  Was fast and easy.  Once the Carvana rep came, she had the car loaded up and gone and the paperwork in our hands in less than 5 minutes. The car was still financed and the payoff has already gone through and a small overage was direct deposited into our bank account.

Insurance went down $90/month.