Author Topic: Should I sell my RAV4?  (Read 4267 times)

intently

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Should I sell my RAV4?
« on: May 09, 2013, 10:40:08 AM »
Ok, so it seemed like a good idea at the time....

In 2011 I bought a new RAV4.  I've always been frugal, and I thought it was a good idea to borrow rather than sell investments to pay cash.  The interest rate is almost zero, and my investments have done great over the past two years, so I'm fine with that.  The car is worth more than I owe.

So, my question is, should I sell it and buy a used station wagon?  I have too many miles in my inventory that I won't be able to use for a decade, right?  But, on the other hand, I've already used the most expensive miles of the vehicle.  That's a sunk cost though, so maybe I should get sell before I get farther behind?

Paul der Krake

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Re: Should I sell my RAV4?
« Reply #1 on: May 09, 2013, 11:00:44 AM »
Well, the RAV4 is a ridiculous vehicle for 90% of the owners I see on the road, so my default choice would be to sell.

Now in order to decide whether to pull the trigger, you need to look at

1) how much you could sell it for, and
2) how much do you owe on it, and
3) how many miles you drive per year
4) the level of uncertainty you are comfortable with (to decide how old of a wagon you will be buying)

I don't know about your area, but around here I've been seing lots of demand for new or almost new vehicles and gently used vehicles sell pretty high. Your 2011 RAV4 may have depreciated less than you think.

intently

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Re: Should I sell my RAV4?
« Reply #2 on: May 09, 2013, 11:16:59 AM »
Yeah, I definitely don't need all the capability that I bought.  Before I even wrote my post I knew that I *should* sell... but I don't WANT TO.  Argh.

acanthurus

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Re: Should I sell my RAV4?
« Reply #3 on: May 09, 2013, 06:39:04 PM »
You don't have to sell it. This isn't a religion where you'll get excommunicated :) Well at least not yet.

It's got a market value of what, 19k? And gets 22/28 MPG? That's neither extravagant nor terribly inefficient. If you like it and you have everything else in your financial house in order I'd just keep it and drive it until the wheels fall off, but if you have massive CC and student loan debt that's a different matter. You'll probably net less than 10k after a sale and buying a replacement vehicle of good quality.

Boil it down to: Where are you now, financially? Where are you going? Is it worth selling this particular thing you like to get there faster?  For me the 10k would not make a difference, I save at least that much in 3 months, and I'd rather have a car that I liked and knew was reliable than deal with the hassle of buying a new one. But if I had 10k in CC debt, it would be gone in a heartbeat.

Just my .02 :)

intently

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Re: Should I sell my RAV4?
« Reply #4 on: May 09, 2013, 07:31:22 PM »
Haha, I just get excited about the idea that I could actually retire in 10-15 years!

I've got zero credit card debt, but I do have student loans (at absurdly low fixed rates) and mortgage loans that I want to pay off.

Still, I think I'll keep the car and learn from my mistake.  As my wife reminded me, the used car market was pretty hot when I decided to buy new two years ago anyway.

Bank

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Re: Should I sell my RAV4?
« Reply #5 on: May 09, 2013, 07:34:17 PM »
I did the exact same thing with a 2009 Rav4 which I bought with cash pre-MMM.  I got a great deal on it in the depths of the recession, but not nearly as good as the deal I would have gotten on a 2002 Scion.  Probably the least mustachian purchase I've ever made.

FWIW, I elected to keep the car even after I came to my senses in 2011.  My wife likes it, she's the one who drives it, and we drive so little that the gas differential is negligible.  So we sold her old car and kept the RAV despite the fact that we would probably have made some money by selling it and buying a used compact. 

With any luck it will last us well into FI -- I'm hoping it is not only the first but also the last car I ever own.


Tyler

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Re: Should I sell my RAV4?
« Reply #6 on: May 10, 2013, 11:02:29 AM »
We owned a 2000 Rav4 for many years, and upgraded to a 2009 Rav4 when the first one was totaled in an accident (luckily it was parked and we weren't in it).  It's not the most cost effective choice, but if you're looking at SUVs for non-monetary reasons I'd recommend it.  It's very dependable, can fit a full washer & dryer set in the back, and has a unique V6 that (at least in that year) gets identical gas mileage to the 4-cylinder version.

Could you get a more cost efficient car?  Sure. But mustachianism is a set of guidelines not a cult. Prioritize your own needs and spend your limited resources appropriately.

intently

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Re: Should I sell my RAV4?
« Reply #7 on: May 10, 2013, 11:38:18 AM »
I perform much better under pressure.  I want a cult!  Someone enforce some dogma on me asap.