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.