To sell or not to sell my Lexus SC Convertible - a $66,000 folly

[BaldingStoic]

Hello fellow Mustachians.  I'm in need of little advice and emotional support.  I've been blessed with a great career and relatively frugal spending habits so I had accumulated a respectable stash of money by age 35.  Not quite sure what to do with the excess accumulated earnings I foolishly decided to purchase a Lexus SC Convertible for almost $70K - paid in cash. (Please spare me the punches-to-the-face, my remorse runs deep). This car became my occasionally used pleasure vehicle since I kept my super reliable '97 Honda Civic.  Fast forward 7 years ahead to the present...I now have 3 kids (too many to squeeze into the vehicle), the Honda Civic still runs great, and the Lexus has under 18,000 miles on it - I’m averaging <2,500 miles per year.

Thus my cost per mile to date is >$3.65 before even factoring in insurance, gas, and maintenance.  The dealership has offered to purchase the car for $29,500, slightly above the KBB dealer value for a vehicle in excellent condition.

Here’s my dilemma:  If I sell it, my cost per mile will exceed $2 (($66K - $29K)/18000miles) - a depressingly high number.  Alternatively, given the fact that my vehicle as depreciated by ~60%, with so few miles, I could plan on keeping it for another 15 years.  Overtime, the total cost of ownership would go down when divided by mile driven and its wouldn't feel like such a loss.

Based purely on the math, I know it's probably better to sell.  I can invest the 29K and purchased a used Toyota Matrix or Honda Fit for about 10K.  But emotionally it's very hard to take a 60% loss on vehicle that is practically in mint condition.  In addition, it's a beautiful car and I live in San Diego - perfect convertible climate.  With this background I welcome feedback from my thoughtful fellow Mustachians.

Advice, support and taunts, at my ignorant fancy-pants purchase, are all welcome.

****UPDATE*****

The deed is done!  Thanks for all the great feedback.  This morning I lowered the roof, loaded my mountain bike into the back seat, and took my final drive straight to the dealer.   My bicycle will now become the ultimate convertible.  The level of anxiety and indecision I felt in regards to selling the car was very interesting - it demonstrates how much power material goods can have over us, which in turn become part of my reason to sell the car.  With garage space now freed up, I envision both surf boards and paddles boards in my future, and I'm a step closer to living-simply-in-San-Diego. 

[Angie55]

Been there done that. Although not on that large of a scale. I was fresh out of college making 90k/year. Bought a 40k convertible all on credit at 7% interest. Had payments of 670 a month. I thought that was reasonable?! I mean everyone else had 2-3 cars Infinitis, BMW's, etc.

Anyway, I sold the car 7 years later with less than 50k miles. Sold for 14k. All the money I wasted on that car hurts. Especially the interest and outrageous car tax holy crap! But I actually feel better now not having to look at it. Wish I sold it way earlier because I spent about 4 years of continuous guilt where I "should" sell it but couldn't pull the trigger.

[FrugalSpendthrift]

Forget the sunk cost, it will only distort your emotions.  Look at how much it will cost you going forward (depreciation, insurance, maintenance, fuel) and decide if paying that money to enjoy the vehicle is in line with your current values.

[dandarc]

If you really can afford it and this is one of your priorities, keep it - you obviously already know this is a financially indefensible move, compared to the alternatives presented, but everyone makes some of these and has different priorities.

[FrugalSpendthrift]

Or look at it from another point of view...  If you had $29,500 in cash, would you go out and buy that car today, or would you rather do something else with that money.  Figure out where your priorities are.

[gimp]

Sunk cost fallacy. Is it worth $30k to you right now?

[coope01s]

This a pretty definite case of loss aversion (understandably so, since we are all human and have all put too much money into bad deals). But you have realize it's already a sunk cost, and only take into account the avoidable future costs associated with the car (ie insurance, maintenance, and fuel like FrugalSpendthrift mentioned) - plus that opportunity to free up an extra 29k for investment.

[neo von retorch]

I think it's a good idea to spread a wide net on cars.com, autotrader.com, etc. and see what other people are asking for a similar example of that car. Yes, it's relatively rare, but I see examples mostly priced into the mid $30k range with lower mileage. Why not list it for a predetermined amount of time (1-3 months) and see if you can sell it privately? You might get quite a few thousand more than you're going to get from the dealer.

I lost $8k in one year driving an Acura TL-S, and about $5k over two years driving a brand new Mazda. I thought it would hurt, but each time I sold those cars, I just felt relief, knowing that my future maintenance, depreciation and gas costs would all be significantly lower. Most recently I went from a 2013 to a 2008 with only a few more miles and pocketed the $6k difference. It felt pretty damn awesome!

[BaldingStoic]

It's funny... I'm a big fan of Dan Ariely, who writes a lot about loss aversion.  So in theory I felt like I grokked this concept.  But the emotions really do come into play.  If I didn't already own this car and saw it being advertised at $29,000, I wouldn't be remotely interested despite recognizing that the price is a good deal for someone in the market for a fancy-pants car.  Thanks for the perspective Coope.   

[RapmasterD]

a) Don't feel guilty for having purchased the car.

b) Sell Mortimer, sell!

[Catbert]

Tobytko - As a fellow San Diego resident with an SC (mine is 12 yo w/ 90,000 miles) keep it if you really enjoy it and can afford it.  But don't let the sunk cost keep you from selling it.  Take the 29K and consider it found money.

[frugaliknowit]

https://www.youtube.com/watch?v=3VPLOVJ0u94

[sobezen]

Please sell the clowncar and purchase a used Honda Fit or other used vehicle that can fit your entire family.  If you can, try to map out as much as possible your errands in advance so your do not need to make additional trips.  These small trips increase your gas consumption and gets maddening when you see how much it adds up.  Also, can you telecommute or work remotely?  Try to get that benefit too, it will save on your driving even if you can reduce it by one day a week.  Good luck.

[thurston howell iv]

tobytko: Don't feel bad. I have a similar situation. Cars that need to go but I can't bear the thought of taking such a huge loss. Only redeeming factor is that the cars bring me great pleasure when I drive them!  If yours doesn't give you the same thrill it used to, it's probably time to let it go... Once it's gone, it'll be one less thing that nags at you.   Besides, maybe there's a new "toy" you can find cheaper?

[ZMonet]

My wife has a 2002 SC430.  We bought it in 2008 with less than 30k miles for $20k.  Not very mustachian, but not totally ridiculous...What is even less mustachian is my wife drives the car a ton and the thing gets horrible gas mileage.  I will say though, the car absolutely makes her happy.  She is in pure joy putting the top down on it and going places on a nice warm day.  She is so absolutely crazy about it she found the one car seat that would fit in the back of the thing (after many attempts) so that she could continue to use the car after my daughter was born.

In short, as others have posted, decide how happy the vehicle makes you now.  If you actually use it and enjoy it, then it may be worth it.  If nothing else, as you point out, your cost per mile will likely be MUCH less based on a cost basis of $30k.

[sedura]

I'm fighting a very strong urge to offer you 30k and fly across the country to pick up your car. That is what I've been lusting after for years now. I'm trying to be a good little Mustachian, but deep down inside, I'm a fancy pants consumer.  Must. Fight....

[rmendpara]

What is your financial situation?

If you can afford it, and get some enjoyment out of it, and most importantly if you would really keep it for another 10 years, then it's probably not going to hurt much more to hang on. You've already taken the biggest hit (buying new) 7 years ago.