Author Topic: Should I sell my 2010 Camry LE that I just finished paying off?  (Read 5120 times)

xlucassferreira

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Should I sell my 2010 Camry LE that I just finished paying off?
« on: September 09, 2014, 04:32:45 AM »
I know that I don't need a car this nice or new, and that for living in LA, a smaller car would probably be better, but now that I already finished paying it off is it worth it to sell? This is a great car that will last me into my 30s (currently 20 years old) and I'm not sure if it would be worth it. However I could sell it for around $11,000 and take the difference of $7,000 or so from buying a $4,000 car to put towards investments. Not sure what to do. HELPPPPPP???!!!! IM YOUNG AND STUPID! Okay not really just young and inexperienced. I go to UCLA, and only drive every two weeks or so to see my parents 65 miles away for the weekend. Other than that I ride my bike to get to class and get groceries etc. I average about 300 miles per month at roughly a 30mpg fuel economy.

lizzzi

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #1 on: September 09, 2014, 05:05:02 AM »
How soon do you graduate? You could well need it for work. My gut feeling (as someone who owned three Camrys in a row over the years…yes, a great car), is that as long as it's paid for now, why not keep it? You may get married and/or have children, and it is a great family car. You may want to drive your parents places when you visit them. Is your hair on fire? Or will your hair be on fire later on with student loans? Just some thoughts.

Retired To Win

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #2 on: September 09, 2014, 05:52:24 AM »
You do need a car, just not necessarily THAT car.  Sell it before that $7000 evaporates through depreciation.

Trust me, older cars are just fine no matter what the argument.  I drive a 1996 Dodge Dakota (an 18-year-old vehicle) and it is superbly reliable.  My wife drives a 1998 Subaru Forester and it is not only reliable but also perfectly presentable to drive other people around.  And, back when I had to impress either girls or clients, I drove a 12-year-old Thunderbird that left everyone literally salivating.

The trick is to maintain the vehicle.  Period.

Alex321

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #3 on: September 09, 2014, 05:56:38 AM »
If you had said BMW or Range Rover, then my answer would be yes. But you have one of the best, most reliable, very economical (overall cost of ownership) models of personal transport that the world has ever seen. And the no-frills base model at that.

Yes, you *may* come out slightly ahead trading down to a $4,000 used car and essentially arbitraging the difference. In other words, you may have 200,000 miles of remaining useful life on the Camry, or 50,000 miles left on the hypothetical $4k car you would buy to replace it. You're wondering if you should make a bet that in the next few years, your invested ROI on the $7k difference is better than keeping all that capital stored in future useful service life on the Camry. Maybe.

My issue right now with used cars is that I think they're grossly overpriced, and by that I mean their depreciation is nearly linear, which I find absurd. In other words, if a hypothetical car has a useful service life of 200,000 miles and costs $20k new, then the used market is pricing the same car (if it's a Toyota/Honda) used with 100,000 miles on the odometer for $10,0000 (approximately).  The old "it loses half its value the second you drive it off the lot is simply not true." So my strategy is to buy new and drive into the ground.

And that brings me to another point--information asymmetry. Since you've owned your Camry since its "birth," you know exactly how well it's been treated and maintained. Any potential buyer of your car has no gurantee of this information, so the market generally demands that he be compensated for this lack of information by a slightly lower price (I know this is in contrast to my previous point, but I think it's still valid). Furthermore, when you buy your $4k used car, you have no guarantee about how well that car has been maintained. The problem here is that if you're a gentle driver and responsible about routine maintenance, on average you're going to cede some ground here in used car transactions.

My vote is to keep what you've got. It's got a long life ahead of it, and you don't have the concern that the transmission is about to fail like you would with any $4k car.

Realistically, your best, most likely, most practical, most definitive option is to RIGHT NOW, TODAY (if you haven't done so already), set up an automatic monthly transfer of whatever money you were paying toward the loan into some sort of investment account. In a way, that's the same thing as dollar-cost-averaging into the market the very same capital you're wondering about now.

workathomedad

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #4 on: September 09, 2014, 06:30:45 AM »
You've already taken the biggest part of the depreciation hit the first 3 years. Now it will lose value more slowly.

Woodshark

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #5 on: September 09, 2014, 06:33:45 AM »
Alex321 has the best point...
Since you've owned your Camry since its "birth," you know exactly how well it's been treated and maintained.

If you like the car and know the car has been maintained well then keep it. Otherwise you might end up buying someone else's problem.

Drive it for another decade or until the wheels fall off.

frugaliknowit

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #6 on: September 09, 2014, 06:44:33 AM »
"I go to UCLA, and only drive every two weeks or so to see my parents 65 miles away for the weekend. Other than that I ride my bike to get to class and get groceries etc. "

Sell it and invest or save the money for when you need a car.  You do not NEED a car to see your parents every two weeks.
There's car rentals, Mega Bus, Greyhound, sharing with other students.  Sure, others will think you're weird without a car, but who cares, be smart!!

Pigeon

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #7 on: September 09, 2014, 06:51:40 AM »
I'd keep it at this point.  These are great cars that last a long time and the major depreciation has already happened.  Keep it for a long time.

shotgunwilly

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #8 on: September 09, 2014, 07:38:33 AM »
I'd keep it. There is going to be somewhat of a hassle to find a really good, reliable, cheap vehicle, and like the others said, you have no idea how it's been treated.  You can make this one last longer than one you will be buying.

sandandsun

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #9 on: September 09, 2014, 08:04:01 AM »
another vote for keep the paid off camry...

Jellyfish

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #10 on: September 09, 2014, 08:14:00 AM »
Alex321 has the best point...
Since you've owned your Camry since its "birth," you know exactly how well it's been treated and maintained.

If you like the car and know the car has been maintained well then keep it. Otherwise you might end up buying someone else's problem.

Drive it for another decade or until the wheels fall off.

I agree with the above.  I am a single woman who doesn't know much about car maintenance and repair, so I have always paid a bit more for a newer no-frills and very reliable car, knowing I will own it for well over 10 years with minimal repair costs.

thedayisbrave

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #11 on: September 09, 2014, 09:21:40 AM »
I would keep it as well.  I faced this dilemma myself, as in my pre-MMM days I bought a brand new 2010 Nissan Sentra.  We financed it, as it was my first big purchase and my mom wanted me to know what it was like to have to make payments on something (first step at teaching me how to budget).  I caught on rather quickly, started making spreadsheets and asking to manage her money as well, so then she gifted me the balance to pay off the car :)

It's paid for and will last a long time - same for yours.  Keep it until it's no longer feasible.  You could have done a lot worse!

DangleStash

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #12 on: September 09, 2014, 09:50:32 AM »
Adding +1 to the "Keep it" crowd.

Used cars can be a gamble, you may get a great one, may not.  Make sure you keep up with all of the service (oil changes, etc), and just enjoy it.  If you do need a vehicle to commute to work, you want to make sure it's a dependable one.  It's not ideal to have a situation where you miss something important at work due to car trouble.

Neustache

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #13 on: September 09, 2014, 11:19:40 AM »
I'm of two minds:

Sell it and don't buy another one - increase the length between trips home and maybe rent a car.


OR

Keep it and find a way to make some money off of it.  Can you legally rent it out to other students?  Don't know what the liability is for something like that, you'd have to check that out first.


I'm just guessing this car is costing you at least $70 a month in taxes and insurance, and I'm not certain you really need it.   But, as other posters pointed out, if you get a job, how dedicated are you to moving to a place where you can walk/bike/use public transport?

forummm

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #14 on: September 09, 2014, 12:39:21 PM »
I go to UCLA, and only drive every two weeks or so to see my parents 65 miles away for the weekend. Other than that I ride my bike to get to class and get groceries etc. I average about 300 miles per month at roughly a 30mpg fuel economy.

If you live near campus it probably costs you quite a bit to have a place to park. Factor that into your calculations. If you sold the car and went without one, you could save the parking costs too. Could you find someone else who "goes home" for some weekends too and split gas money with them? There should be a ride share board. Even if they can only get you, say, 15 miles from your parents, maybe your parents or other family could pick you up there.

Your depreciation, insurance costs, and opportunity cost of the money are pretty high to only drive 2 weekends per month. My guess is you're losing about $3k per year just owning the car (spending plus depreciation). But you should run your own numbers. If you don't have comp/collision coverage, include that in your costs anyway since that's risk you are bearing by self-insuring.

forummm

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #15 on: September 09, 2014, 12:41:53 PM »
My guess is you're losing about $3k per year just owning the car (spending plus depreciation).

If my estimates are approximately right, and you visit your parents 15 times per year, that's $200 per visit. There's got to be a cheaper way to get there.

lizzzi

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Re: Should I sell my 2010 Camry LE that I just finished paying off?
« Reply #16 on: September 09, 2014, 05:55:31 PM »
We have still not heard from OP about when is graduation, where work locations may be, and if any student debt exists. I also agree with those who have said they buy a sensible new car and drive it forever. Then you know the maintenance history. I know it is heresy on MMM to question the wisdom of buying a used car, but I would still worry about the unknown history of the pre-owned vehicle. I'm glad some folks find used cars totally dependable. I must be from a different planet (or my used cars have been) because frankly, you can just inherit a bunch of problems with a used car. It has happened to me and to people I know.