Used SUV: Help me turn around this anti-mustachian purchase

[DroppedInOn]

In November 2015 I bought a used 2011 certified Honda Pilot EX-L. It had about 76,500 miles on it. I paid $20,700 for it from a dealership, so after tax and dealer fees it was about $23,000 financed.

I financed the Pilot at 2.9% but make payments a month early (simple interest loan), and my payments right now are $400 with a balance of $19,500. I could easily go to $450 and my payments will still be less than 10% of my net monthly income.
Unfortunately I didn't really factor in gas, which is about $150/month. In LA it gets about 13-14 mpg city, not the 17 they advertise. I'm seriously considering trading it in or selling it (blue book is about $18,500) and leasing a Chevy Volt or similar plug-in hybrid with the $7500 federal tax incentive.

My question is: would it make sense to ditch the gas guzzler for a plug-in hybrid lease with the government incentives, or hold onto the Pilot till the wheels fall off? I'm single, btw, and the Pilot leaves a great first impression. Leather trim, heated seats, the works.

I'm also trying to save for a condo, so, that kinda leaves out investing in an index fund (outside of my maxed-out Roth IRA and company-match Roth 401k). The reason is that after several attempts at short-term investments, I've almost always lost money. Therefore the stash of cash is in a .95% online savings account, and right now that's where my emergency fund is.

TL;DR: sell the Honda Pilot ASAP and get into a cheap used fuel efficient car, lease a plug-in hybrid with tax incentives or hang onto the Pilot till the wheels fall off? I save about $1100/month of excess cash and keep my expenses to a minimum.

Thanks.

[SwordGuy]

I suppose it depends upon what your goals are:

Option 1) Pick up dates that are more impressed with your ride than they are with you.

Keep the vehicle.

Option 2) Become FI really quickly.

Ditch the vehicle and replace it with an inexpensive beater.   Try selling the vehicle to another driver to minimize your immediate cash loss.  Watch your savings pile up when your car payment is a fraction of what it currently is, and even more when you pay it off years earlier.

Pick up dates with your charm, not your vehicle.   You'll get a better quality person that's more likely to stay with you. :)

[brotatochip]

It depends on your mustache power level.   MMM would probably sell the guzzler and take the bus.  If I were you I would defiantly sell the SUV and get something more affordable with better MPG.  You can find a nice used Lexus hybrid for 8-10k.  Not exactly your used Camry with 110,000 for $6000, but it's more reasonable and your have dates to be picking up 👊

[tobitonic]

Since you're open to small cars and seem sensitive to mpg, per your Volt suggestion, I'd go with a 2010 Toyota Prius and drive it to 300k miles.

You'll get the critical safety features in the Pilot (ESC and side airbags), as well as the reliability, while saving considerably in fuel and purchase costs.

[Reynolds531]

I say let excel decide. Plug in a sale purchase and half the gas for five years. Don't forget the difference in insurance.

I would do three scenarios. Pilot vs plugin vs four cylinder accord gas model.

[DroppedInOn]

All great suggestions so far. Thank you.

[couponvan]

LA has some extra incentives in certain areas for EVs. But, I would probably go used Volt if I were you since you wouldn't have access to a gasoline car and might need the range. Personally, I have a 2012 (3?) Pilot, but I also have 3 kids and a dog and carpools almost daily. No loan either....I am getting either a Volt or a Leaf (likely used) this year. Dump the Pilot and the LA status concerns....or lie and tell all friends you are now worried about the environment thus you need an EV - and you are trying current EVs to see if you really want that Tesla 3 EV. That should buy you 3 years of time before anyone calls your bluff.

Also, you do not want the LA girl who is impressed by your Pilot. Weed out the fake spendy girls and only date quality. (A break from the dating scene also could significantly improve your overall net worth. Dating can be expensive.)

Look up buying a Nissan lead thread and the Nissan Leaf almost paying me to drive it threads. They are eye opening.

[DroppedInOn]

Well, for a 2013 Volt at $13,500 ($12k base + taxes and fees from dealership), I'd net a savings of about $7,000 over 5 years. That includes what I put down for the Pilot + payments made on the loan already. I know private party would be ideal but couldn't find any used Volts on Craigslist for that price.

My monthly savings alone would be about $200, and I'd be paying off the loan at least a year early if I chose to finance. Finance rate would be about 2.24%.

So, this is looking like a much better scenario than the Pilot. I should add that the Volt has almost 81,000 miles. Is that too high?

[Uturn]

The chick that is impressed by the make/model and fancy gadgets of your car is long term going to cost you far more than a Honda Pilot.  If you really want to save some money, find a girl who appreciates being picked up in a clean and well maintained car. 

[DroppedInOn]

The chick that is impressed by the make/model and fancy gadgets of your car is long term going to cost you far more than a Honda Pilot.  If you really want to save some money, find a girl who appreciates being picked up in a clean and well maintained car.

Very true.

[cchrissyy]

I'm single lady with a nice car and I think it's wasteful and frankly, silly, for a single guy to drive such a big vehicle. Doesn't the Pilot seat 8?  Seriously, if I think of one man, driving such a big thing to work each day with 7 empty seats, at very low LA traffic speeds, guzzling gas... omg I'd run in the other direction.

If there are girls in LA who think of that as an attractive picture, well, good for them I guess, but if you want to FIRE I don't think you should be looking for that kind of a partner.

The Leaf idea is good. Or you could get a more reasonable gas-powered used car. You can dramatically help your situation without going all the way from SUV to EV if you don't want to. If you don't like the Prius, maybe check out a Civic hybrid.

[DroppedInOn]

I'm single lady with a nice car and I think it's wasteful and frankly, silly, for a single guy to drive such a big vehicle. Doesn't the Pilot seat 8?  Seriously, if I think of one man, driving such a big thing to work each day with 7 empty seats, at very low LA traffic speeds, guzzling gas... omg I'd run in the other direction.

If there are girls in LA who think of that as an attractive picture, well, good for them I guess, but if you want to FIRE I don't think you should be looking for that kind of a partner.

The Leaf idea is good. Or you could get a more reasonable gas-powered used car. You can dramatically help your situation without going all the way from SUV to EV if you don't want to. If you don't like the Prius, maybe check out a Civic hybrid.

I didn't buy the Pilot to impress girls, really. I bought it cause I liked how it looks, came fully loaded for what I could afford, and is a convenient vehicle for surfing. I had no idea it would get such horrendous mpg, but then again I didn't do a lot of research. I was coming from a beater 2001 Camry that had a shit-ton of visible and mechanical problems. To fix it was more than the car was worth, so I sold it.

Anyway, I found a $12,000 used Volt with under $81k miles. I'm reading that most people are concerned with battery replacement, and to lease an EV/Plug-in EV. So, I'm on the fence about what to do.

1. Buy a super-efficient all-gas sipper (Corolla, Yaris, Fit, etc)
2. Buy a used Volt/Prius/whatever
3. Lease a Volt/Prius/whatever

Seems like the ability to charge (I live in an apt, not a house with a garage) and battery life put the EV/Plug-in EV at a disadvantage in my situation. Correct me if I'm wrong.

[alsoknownasDean]

How much do you drive?

What about just a normal, non plug-in Prius? Surely a used one of those is cheap enough now (ie: competitive with a Corolla/Civic of similar age)? Maybe something around 2008-2010?

[couponvan]

Well, for a 2013 Volt at $13,500 ($12k base + taxes and fees from dealership). I should add that the Volt has almost 81,000 miles. Is that too high?

Yes - that mileage is WAY to high.  For a 2013, I'd limit myself to something with less than 36K miles.  Also, don't just limit yourself to the local area for the car.  Shipping the car could be much less expensive in the long run.  Look up in SF Bay area and PNW (Seattle) where they have lots of used "green" cars. It might even pay for you to fly up there and drive your new car home on a vacation drive.  Cars in SF and Seattle were pricing at $2K less than IL...even with $500 shipping I'd save $1.5K going that way.  Heck, it might actually pay to buy there, sell, buy there, sell and so on....

[DroppedInOn]

How much do you drive?

What about just a normal, non plug-in Prius? Surely a used one of those is cheap enough now (ie: competitive with a Corolla/Civic of similar age)? Maybe something around 2008-2010?

Nah, the Prius retains its value pretty well. I really like the Volt, and they seem to be a bit cheaper used.

[DroppedInOn]

I know the mustacian thing to do is drive a recent-model year used car, that gets 30+ mpg till the wheels fall off, but with tax incentives the picture gets blurrier with hybrids.

Anyone in favor of leasing a hybrid/plug-in/EV?

[tobitonic]

To be honest, it sounds like you just want to lease a Volt, as you keep bringing this up no matter what anyone else suggests.

[DroppedInOn]

To be honest, it sounds like you just want to lease a Volt, as you keep bringing this up no matter what anyone else suggests.

On the contrary, I've found a couple used Volts that I'm stoked about. I'm all in favor of buying used, but I know a few people that rationalized leasing based on the fact that hybrid tech - especially plug-in, changes rapidly.

Despite the salty tone, I appreciate the tough love. Made me re-read some previous posts promoting a used Volt. So, thanks.

[Miss Piggy]

Why lease? Why not get a used one and keep it for a long time? Yeah, you'll lose the government incentive, but really, if you look at KBB values for used plug-in hybrids, they're valued lower than they "should" be because of that incentive, so either way, you win.

[DroppedInOn]

Why lease? Why not get a used one and keep it for a long time? Yeah, you'll lose the government incentive, but really, if you look at KBB values for used plug-in hybrids, they're valued lower than they "should" be because of that incentive, so either way, you win.

Excellent. More validity in that direction then.

[warmastoast]

Since you're open to small cars and seem sensitive to mpg, per your Volt suggestion, I'd go with a 2010 Toyota Prius and drive it to 300k miles.

You'll get the critical safety features in the Pilot (ESC and side airbags), as well as the reliability, while saving considerably in fuel and purchase costs.

This is exactly what I have just done.  Sold the almost brand new 4Runner and bought a 3 year old Prius V (station wagon) for me and the kids.  Without that car payment and with my petrol costs halved I'm $500 a month better off.  I'm not even going to think too hard about how much "we" lost on having that 4runner for 8 months but as a newly divorced mother of 3, I had to think about the future and how I am going to fund that future - and driving around in a too big car on which I owed too much money using too much gas wasn't ever going to work.

[SU]

Why lease? Why not get a used one and keep it for a long time? Yeah, you'll lose the government incentive, but really, if you look at KBB values for used plug-in hybrids, they're valued lower than they "should" be because of that incentive, so either way, you win.

Excellent. More validity in that direction then.

I feel so happy when someone on this forum points out the obvious and searingly true economic principles at work. Miss Piggy is right - at least part of the subsidy is built into the resale value and, as couponvan suggests, places where these vehicles have been either highly subsidised or highly fashionable are good places to shop for second hand.

[couponvan]

Just buy it quick before MMM can write a blog about his mustachian dual Nissan Leaf purchase and becoming an all electric family, and scrapping the work van/truck....Prices of Leafs will rise with the instant demand generated by his shockingly simple math behind going EV.... ;-)  I feel it coming based on his April Fools post on the Teslas.

[DroppedInOn]

BTW, I ditched the gas guzzler for a used 2012 Prius. At almost 300 miles I'm getting over 49 mpg, with a lower payment and lower interest.

The savings are going straight into my 401k.

[couponvan]

Good work!! Congratulations on the new (to you) car!