Author Topic: To keep or sell my car.  (Read 6056 times)

JD2001svt

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To keep or sell my car.
« on: December 18, 2013, 02:18:16 PM »
I've been reading the blogs and lurking the forums for awhile, and thought I'd go ahead and post my situation.  I'm a 33 year old single male with no kids.  I live VERY modestly and contribute religiously to my company 401k, personal Roth IRA and vanguard index fund.  Work is 10 miles away, and is unfortunately not a bike friendly route at all....  No debt at all except for......... my auto loan.  I have had a weakness for sports cars as far back as I can remember, and I am now ready to completely shed myself of this affliction!   14 months ago, I purchased a 4 year old Nissan 370z.  I got a 3.99 rate on it from local bank and put 10,000 down on it.  I owe about 11,000 now.  It has 35,000 miles on it and is worth between 21-25 private party.  I get about 30 mpg on highway and 21-22 in town.  I realize it was not the smartest choice to buy, but I loved it and it has brought me joy.  My idea is to sell it and pocket about 9000 to 10,000 dollars.  I have been searching for used mid 90's to early 2000's compact gas sippers and can pick up a nice one with around 90-100,000 miles for about 5 grand. 

Here is my dilema.  The z has already depreciated this past  year... that is a sunk cost.  Do i sell it and buy a high mileage questionable economy car, or keep driving it for as long as I can?  These cars are known to be very reliable and can go upwards of 200,000 miles if cared for. 

Cliffs
2009 370z 35,000 miles.  21 city, 27-30 hwy mpg
Owe 11,300 @ 3.99  payments are 303.00 per month
Car is worth 20-25 private party sale
Take equity after sale and buy 5000 high mileage economy car.
Take rest of sale money and invest in index/roth, etc.

I love this community and have learned a great deal!  Looking forward to getting some feedback on my situation.


Frankies Girl

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Re: To keep or sell my car.
« Reply #1 on: December 18, 2013, 02:46:03 PM »
Just breaking out the facts sometimes helps me....

5-ish year old car, total cost (not counting the interest) of roughly 21K.

You enjoy driving it, and it's not the worst in terms of fuel efficiency (not the best, but not horrible for a sports car)

The interest rate is high.

I think for me, the sticking point is that it is a sports car (limited usefulness over the long haul) and the high interest rate/amount owed. It would make the most sense to locate a reliable older model car for 5-6K and sell off the Nissan. You could consider the sunk cost the price you paid for having a "fun" car for a while.

But then again, I think the thing to really tip the scales is how much you already have saved (savings rate and % you currently live on, your timeline to reach FI, etc...) and whether the owning of a fun car is one of your priorities. If you have a decent nest egg, are saving well and staying out of debt, you could consider this one of your splurges (we all have them). If you're in great shape savings/living expenses-wise, then I would actually pay that sucker off ASAP and drive the car into the ground.

JD2001svt

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Re: To keep or sell my car.
« Reply #2 on: December 18, 2013, 02:57:08 PM »
That's pretty much where my mind is at.  I got decent use out of it for the past year, and have babied it and still do to keep the value as high as I can.  I actually drove a beater $1700.00 1990 Toyota Celica for 5 years before this car and it was the best financial decision I ever made.  It finally kicked the bucket 2 weeks ago, and I have been driving the Z daily which has made me reconsider using a sports car as my daily driver.  The thing is, I'm planning a move to a new city in the near future that is actually walkable and bikeable.  I live in Tulsa, Ok...... we recently had a news story run here about drivers being LIVID over cyclists on the streets.  This is a TERRIBLE town for anything but a car. I'm looking into relocating to the pacific northwest:  Higher cost of living, but would likely be offset by not having to own a car, or driving VERY little even.   
Either way, It is good that I am not upside down, and the interest rate isn't the best, but not outrageous either.  Having said that, I am highly considering selling it and buying a very limited use cheap economy car like my old celica.  As a car guy, I can say that 90's model Hondas are great commuter cars not only because of their reliability, but they are also VERY easy to work on and parts are very plentiful and cheap.  You really can't say the same for newer model Hondas.
Thank you for the helpful feedback. 

FIreDrill

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Re: To keep or sell my car.
« Reply #3 on: December 18, 2013, 03:14:05 PM »
One thing I didn't see mentioned was the difference in Insurance costs.  If you did sell and buy a decent car for a couple grand you could prob just get liability on it and save a decent amount on your monthly expenses.  I would definitely do some research and see what the cost difference would be on insurance and take that into consideration.  I personally would lean towards selling the car and free up that money.  I will be selling my 2004 Mustang Mach 1 this summer to do just that.

SS

JD2001svt

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Re: To keep or sell my car.
« Reply #4 on: December 18, 2013, 03:23:07 PM »
One thing I didn't see mentioned was the difference in Insurance costs.  If you did sell and buy a decent car for a couple grand you could prob just get liability on it and save a decent amount on your monthly expenses.  I would definitely do some research and see what the cost difference would be on insurance and take that into consideration.  I personally would lean towards selling the car and free up that money.  I will be selling my 2004 Mustang Mach 1 this summer to do just that.

SS

Love the Machs.  I've owned a 2001 Cobra and a 2003 Cobra in the past.  As I said, cars have always been a weakness.  It was funny..... when I sold my old broken down celica 2 weeks ago for 500.00, my insurance  insurance bill was supposed to be roughly the same since I no longer got a multi car discount.  I was surprised to see 67.00 monthly on the Z insurance instead of the anticipated 100 some odd dollars.  I paid around 42.00 for liability on the Celica.  I have a clean driving record, so that helps. 

thurston howell iv

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Re: To keep or sell my car.
« Reply #5 on: December 19, 2013, 11:43:24 AM »
Personally, I'd sell the Z if possible. Buy a beater and pocket some cash.

A you've realized, driving the beater saved you money over the long haul. I have a similar if not more exaggerated scenario... I purchased a new car back in 2003 that we're still currently driving. Just hit 170k!  I could have sold it several times when it was a lower mile car. Now that it has higher miles, it's less appealing to buyers even though there is nothing wrong with it... I also have other cars. A bunch of them (not practical for dd use)... Market seems to be tough to sell much of anything unless you're giving it away.

If you can sell it. You'll come out ahead. Credit will be safe. No more payment. You'll probably be able to find another cheap beater (I have a 97 civic hx- hx's get some of the better mpg - if I drive cautiously I can get 43mpg- hyper-milers can easily get 50mpg or better) Car has 225k and I purchased it with 150k for around $2500 or so.  If you can't find one of those, you should try a late 90's ford escort. Yes they're ugly, slow, and cheap feeling but, there's tons of them! Parts are super cheap and I can go to a salvage yard and find tons of them whenever I need parts.

I know it will be hard to do and sometimes I really hate driving an old gutless car. However, when I consistently drive by the gas station or hear stories about idiots who go buy new cars and have crazy car payments, then I feel a little better. :)

JD2001svt

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Re: To keep or sell my car.
« Reply #6 on: December 19, 2013, 01:56:19 PM »
Thanks Thurston.  Yes, I've considered that as well.  It's a 2009 with low miles, so people can still get a loan to buy it pretty easily.  In 5 years, that will not be the case.  These cars hold value relatively well, so i'll be stuck trying to sell it for 14-15 grand in 5 years...which may be difficult.  I would totally be all for keeping it, but MPG isn't great in it, tire replacement cost is ridiculous for 19" wheels, and it offers very little if any utility being a 2 seater with a very small hatch.  I'm leaning more toward putting it up for sale now and not buying another car until it's sold.  If I have to rent a car for a week before I find a replacement, that's fine.   I should be able to easily find a reliable sub 5000 dollar car within the tri state area within a week of looking.

rocksinmyhead

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Re: To keep or sell my car.
« Reply #7 on: December 19, 2013, 02:36:58 PM »
The thing is, I'm planning a move to a new city in the near future that is actually walkable and bikeable.  I live in Tulsa, Ok...... we recently had a news story run here about drivers being LIVID over cyclists on the streets.  This is a TERRIBLE town for anything but a car. I'm looking into relocating to the pacific northwest:  Higher cost of living, but would likely be offset by not having to own a car, or driving VERY little even.   

hey now! I moved to Tulsa two years ago and was SHOCKED at how much more bike-friendly it was than I expected. yes, there are some people here with shitty/aggressive attitudes towards bikers, but still... I thought it'd be a lot worse. I bought my car here a year and a half ago and only just hit 10k miles on it during a Thanksgiving road trip to the Twin Cities. that being said, I DO own a car :) and I think a lot has to do with what part of town you live/work in. if you don't have easy access to the trail system, it would be tough. I keep hearing about how Sand Springs in particular is weirdly hostile... just today at lunch, a coworker was telling me how during Tulsa Tough, someone threw tacks down on the road, and another time when he was biking in a group someone sprayed mace out their truck window at them!! WTF?!?!

anyway, tangent over, I like the idea of selling the Nissan if you are not in love with it as a daily driver :)

JD2001svt

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Re: To keep or sell my car.
« Reply #8 on: December 19, 2013, 03:10:21 PM »
Yeah, do you remember the big fiasco here over the summer?? The cyclists vs the motorists? haha.  I work at 145th and admiral.... it's in the industrial side of town and not the safest to live nearby.  I've tried to work out the logistics of riding to work, and I really think it would be a treacherous route to take on daily. If you live and work downtown or midtown, you've got it made!   Interesting you say that... we do have AMAZING nationally renowned bike trails here, but they really don't do much for commuting from what I can tell... they seem more designed for leisure since they only go up and down riverside and into sand springs.  The tack story is true by the way!

rocksinmyhead

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Re: To keep or sell my car.
« Reply #9 on: December 19, 2013, 03:38:34 PM »
Yeah, do you remember the big fiasco here over the summer?? The cyclists vs the motorists? haha.  I work at 145th and admiral.... it's in the industrial side of town and not the safest to live nearby.  I've tried to work out the logistics of riding to work, and I really think it would be a treacherous route to take on daily. If you live and work downtown or midtown, you've got it made!   Interesting you say that... we do have AMAZING nationally renowned bike trails here, but they really don't do much for commuting from what I can tell... they seem more designed for leisure since they only go up and down riverside and into sand springs.  The tack story is true by the way!

oh yeah, that would be terrible to ride to. my boyfriend works in Catoosa so he's in the same boat. but we live downtown and I work downtown so I lucked out :)

JD2001svt

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Re: To keep or sell my car.
« Reply #10 on: December 19, 2013, 03:49:17 PM »
Would LOVE to work and live downtown, or at least midtown.  My commute is 10 miles from 71st and  yale.... not terrible, but i'd like to do better.

fodder69

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Re: To keep or sell my car.
« Reply #11 on: December 19, 2013, 06:22:08 PM »
Yeah, I think you have the right idea selling the car. Sell it now and got some money out of it, and then in 3-4 years time you can but the same car for way less. The resale curve is in your favor to sell now. If it lasts until 200K but one with 150K miles in a few years time for dirt cheap.

Or buy a 240sx or 260sx! I love the style of those. Obviously nowhere close to the performance but I find those to be just classic, beautiful cars. One of my dream cars...