Author Topic: Should we sell our car?  (Read 3379 times)

toby2

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Should we sell our car?
« on: February 16, 2014, 05:28:53 PM »
In our quest to become more mustachian, my wife and I are considering selling one of our cars. But we're not sure if it's the right move.

We purchased a brand new Subaru Forester a year ago at $25k. We put down 10k, and our balance right now is 12k. We have 0% interest, so that's definitely a plus. We also have the peace of mind in knowing that we have a rock solid vehicle for the next 10 years and one that's safe for our 6 month old boy.

But we also have some student loan we'd like to knock out, not to mention the 12k we owe on the vehicle itself. Even though the interest rate is 0% we still have $240/month of cash flow we're losing.

Our idea is to sell the Forester (blue book has it at $22.5k in a private sale), recoup our 10k down payment, and use that to but a 10k used vehicle outright.

Is this a viable strategy? I'm going to guess that it's the mustachian thing to do, but are we taking on significant risk with a 10k station wagon, while we have a 6 month old kid? Just looking for some thoughts.

Milspecstache

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Re: Should we sell our car?
« Reply #1 on: February 16, 2014, 05:35:47 PM »
If you have multiple cars that plan probably makes sense.  If the Subaru is your most reliable car and you need it to go to work and can't ever be later it might be require more planning.

In my opinion, 22k is a lot to tie up in a car, however.

Grateful Stache

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Re: Should we sell our car?
« Reply #2 on: February 16, 2014, 07:24:32 PM »
If safety is an issue, there are plenty of safe cars available for 10k.

If reliability is an issue, then there are plenty of reliable cars available for 10k.

I drive a 2003 Honda CR-V. It's both safe and reliable, and it cost well under 10k. Having an extra $240/month to contribute to savings and retirement is priceless.

Cheers.

wordygirl

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Re: Should we sell our car?
« Reply #3 on: February 16, 2014, 08:55:36 PM »
I'm amazed you'll only lose a couple thousand on the sale. In that case it might be worth your while to sell. I admit I'd be tempted to keep it, however, as it will last longer than the used car you buy, so you'll have to replace that one before you have to replace this one.

When we bought a new car, and then realized what idiots we'd been (one year later), the amount we had lost through depreciation made it not worth our while to sell (we'd paid it off by then, too).

Thankfully it's been a good car and we still have it all these years later.

toby2

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Re: Should we sell our car?
« Reply #4 on: February 17, 2014, 04:45:17 AM »
I'm amazed you'll only lose a couple thousand on the sale. In that case it might be worth your while to sell. I admit I'd be tempted to keep it, however, as it will last longer than the used car you buy, so you'll have to replace that one before you have to replace this one.

We bought just under a year ago, and got a pretty great deal on it. Evidently there is a robust used market for Subarus as well.

toby2

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Re: Should we sell our car?
« Reply #5 on: February 17, 2014, 04:47:03 AM »
If you have multiple cars that plan probably makes sense.  If the Subaru is your most reliable car and you need it to go to work and can't ever be later it might be require more planning.

In my opinion, 22k is a lot to tie up in a car, however.

One of the reasons we're considering getting rid of it is because I take the train to work and my wife works just a few blocks from where we live. We basically got suckered into thinking we needed a big new car since we were expecting a child. Don't get me wrong, we love it, and feel secure with it. Just not sure we really need it since neither of us has a car commute. 

b4u2

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Re: Should we sell our car?
« Reply #6 on: February 17, 2014, 06:02:33 AM »
If you have multiple cars that plan probably makes sense.  If the Subaru is your most reliable car and you need it to go to work and can't ever be later it might be require more planning.

In my opinion, 22k is a lot to tie up in a car, however.

One of the reasons we're considering getting rid of it is because I take the train to work and my wife works just a few blocks from where we live. We basically got suckered into thinking we needed a big new car since we were expecting a child. Don't get me wrong, we love it, and feel secure with it. Just not sure we really need it since neither of us has a car commute.

In that case sell it and buy the cheaper car with cash. No/little commute save some more dough :)

MayDay

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Re: Should we sell our car?
« Reply #7 on: February 17, 2014, 06:12:40 AM »
In terms of safety with little kids, I have a 6 and 4 year old, and have driven the same honda civic since before they we're born.  We are on track to give it to DS when he turns 16 with about 200k miles at that point. 

Is it the absolute safest car?  No.  Does it meet our needs?  Yes.  I feel a little bad that it doesn't have all the latest safety stuff (side curtain airbags were brand new when we bought it, for example, and cost about 1000$ to upgrade to, so we skipped it).  But if I chase all the latest in safety stuff I would be getting a new car every few years forever.  I figure since we don't drive a ton, and apparently I am a fairly safe driver (no accidents in ten years of driving) then it's good enough.  And they are in car seats until age 8 or more anyway these days!