Author Topic: What about the car you already own?!?  (Read 5446 times)

ChoCNiLLa

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What about the car you already own?!?
« on: January 29, 2015, 08:54:17 AM »
Fellow Mustachians, I am new to the site and beginning to see the follies of my blatant consumerism.  I am in the process of making some significant changes; getting rid of cable, frugal purchases and of course paying down debts!
However my big question is about the vehicles. We currently own two cars. One is a 2005 dodge magnum (Hemi of course) gas guzzler. Worth approx $7000 with a $4000 loan outstanding. This of course will be sold asap!!
The second is a 2013 Nissan Altima base model getting 38mpg. Worth about $16000. Fully paid off, bought for $15000 which was a great deal, or so I thought.

Question is, do I keep the Altima?  It only has 10k miles on it. Used between my wife and I, would only see about 10k miles per year. Practically brand new, warrantied til 2018. Now my newly found frugal self says sell it and get an older model vehicle, but I'm concerned an older used vehicle isn't worth the savings of only a few thousand over this perfectly good newer model. We also have 2 children, so something smaller isn't an option.

What do I do?? Keep or sell?? Helllllpppppp!!

JLee

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Re: What about the car you already own?!?
« Reply #1 on: January 29, 2015, 08:58:26 AM »
I would keep it and be worry-free for years.

I'm a red panda

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Re: What about the car you already own?!?
« Reply #2 on: January 29, 2015, 09:19:39 AM »
I'd keep it.

If you had a massively valueable gas guzzler, it might make sense to sell and get something cheaper, but that isn't the case.

Pigeon

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Re: What about the car you already own?!?
« Reply #3 on: January 29, 2015, 09:20:46 AM »
I would keep it too.  I'm in the camp of preferring to buy a new, modest, reliable, base-model vehicle and own it for ages. 

In fact, we have a 2013 base model Altima that we purchased new at a great price ourselves.

trailrated

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Re: What about the car you already own?!?
« Reply #4 on: January 29, 2015, 09:26:11 AM »
I would keep it and be worry-free for years.

+1

DecD

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Re: What about the car you already own?!?
« Reply #5 on: January 29, 2015, 09:32:25 AM »
I would also keep it.

MgoSam

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Re: What about the car you already own?!?
« Reply #6 on: January 29, 2015, 09:40:38 AM »
I see that this is your first post, welcome to the MMM. This site has helped me, and I hope that it helps you.

MayDay

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Re: What about the car you already own?!?
« Reply #7 on: January 29, 2015, 09:43:02 AM »
I would keep it.

Timmmy

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Re: What about the car you already own?!?
« Reply #8 on: January 29, 2015, 09:50:03 AM »
Keep it on the condition that you will be keeping it very long term.  Think 10 years or more.

The next few years are going to be expensive as far as depreciation goes.  So if you aren't going to keep it long term it's best to downgrade now. 

AlwaysBeenASaver

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Re: What about the car you already own?!?
« Reply #9 on: January 29, 2015, 09:51:57 AM »
If you're not in a financial "emergency", meaning you have a lot of debt with high interest or are having trouble making ends meet, I'd keep it. But if the $ you could get for it would help dig you out of an emergency, you should probably considering selling it and getting something older.

Kingomri

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Re: What about the car you already own?!?
« Reply #10 on: January 29, 2015, 10:04:54 AM »
I think neither choice is a terrible one, but I'll play devil's advocate with the above posters. Forgive what may seem like a tangent here, there's a point coming, and I hope to offer a different perspective to consider in making your decision.

I keep a budget spreadsheet so I can see what we spend each year. At the end of each year, I look up the KBB value of each of our vehicles. I then compare that value to the value of the car one year prior, and include the depreciation in our costs for the year.

Our current fleet is an '07 Yaris (2-door hatchback) purchased in August 2011 for $5,000 or $5,500 (with roughly 130k-140k miles, my then-fiancée-now-wife was the one to actually buy it, so I'm not sure) and a '10 Civic (4-door sedan) purchased in November 2013 for $7,700 (with 83,000 miles). Both were relatively new cars when we bought them, though they both had lots of miles for their age. Our depreciation cost for 2014 was $281 for the Yaris and $812 for the Civic.

Of course, older cars need more maintenance, right? I needed to change the brakes and rotors on both cars last year (very DIY-able, even for someone as mechanically inept as me), and the Civic needed new tires and a cabin air filter, so we paid $726 in non-oil-change maintenance, but those costs are way higher than we can expect most years.

So our TWO cars cost us $1,819 in depreciation and maintenance due to age. What's your ONE Altima going to cost you this year in depreciation alone?
« Last Edit: January 29, 2015, 10:06:41 AM by Kingomri »

Eric

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Re: What about the car you already own?!?
« Reply #11 on: January 29, 2015, 10:06:00 AM »
Hold on there people!  The OP has debt.  What we don't know is how much or at what interest rates.  It's quite possible that selling the car and buying something equivalent but with higher miles for $7-8K would allow him to instantly throw $8-9K at his debt.  That's a lot of money!  Especially if they're only driving 10k miles per year, there's hardly a reason to carry so much excess "automotive inventory".

http://www.mrmoneymustache.com/2011/11/28/new-cars-and-auto-financing-stupid-or-sensible/

Now if s/he was debt free, it'd be a little different discussion, but getting out of debt should be the A-number one priority.

ShoulderThingThatGoesUp

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Re: What about the car you already own?!?
« Reply #12 on: January 29, 2015, 10:15:10 AM »
I keep my 2010 Honda Fit even though we could probably downgrade a little simply because I know what's happened with it, good and bad. That said, I don't have debt, and the Fit is probably only worth $10k rather than your $16k. Depending on your interest rates, getting $5000 out of a car switch might be worth the little bit of extra car worry.

jms493

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Re: What about the car you already own?!?
« Reply #13 on: January 29, 2015, 10:19:47 AM »
Yeah we could use your household income and the amount of debt you have.


James

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Re: What about the car you already own?!?
« Reply #14 on: January 29, 2015, 10:26:05 AM »
Good grief! Seven people say "keep it" without knowing any more than we know??? Sometimes I wonder what the fuck happened to this forum.

Eric is right! Sell the vehicle and buy a cheap one. (spend less than Eric mentions if hair is on fire) All those dollars tied up in that car are running away fast, so instead put those dollars to work for you. MMM has lots of posts on cars, so I won't cover all that. You are also welcome to ask for advice. But the simple answer is that your gut is right, sell the car and buy something cheap.

Obviously we all make priorities and spend more on some things. If you have no debt and you want to drive a fancy-ass car around, that is your call. But since you say you are new to MMM and are just changing things, I would guess you have debt you can pay off with the equity in that fancy car, or would be better off with the equity in the market earning money for you instead of wandering off over the next few years.

Edit: We make over 200k a year, are reasonably close to FI, have three kids, and our two cars combined are worth a few grand less than that one car. And we drive two fancy ass cars!!! It's transportation, don't get tied up in fancy shit you don't need, it just tends to drag everything else in your life into more expensive categories...

Second edit: In my frustration I forgot to mention, welcome to Mustachian living!!! It can be a little rough at first, but those first big changes are also the most satisfying! Your future self will be so damn proud of these efforts to delay gratification and enjoy life simply instead of staying on the consumerism treadmill. Best of luck!!!
« Last Edit: January 29, 2015, 10:40:45 AM by James »

neo von retorch

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Re: What about the car you already own?!?
« Reply #15 on: January 29, 2015, 10:29:45 AM »
I'm going to say "sell it" - if you drove a ton (taxi driver?) then a newer car might make sense, but with your more limited driving needs, you can get a car in the $8k range with 50-80k on it that is still relatively new (2007-2009) and will easily last you for many years. $8k is a big chunk!

Reverse it. If you owned a 2008 Altima with 60k on it, would you spend $8k right now to buy the newer one? Maybe a year ago but not knowing what you know now :)

I walk the walk, and I drive a lot more than you. I sold a 2013 Mazda CX-5 to get a 2008 Honda Fit Sport. Went from 36k to 56k and got a big fat check in the process.

Timmmy

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Re: What about the car you already own?!?
« Reply #16 on: January 29, 2015, 10:31:17 AM »
Hold on there people!  The OP has debt.  What we don't know is how much or at what interest rates.  It's quite possible that selling the car and buying something equivalent but with higher miles for $7-8K would allow him to instantly throw $8-9K at his debt.  That's a lot of money!  Especially if they're only driving 10k miles per year, there's hardly a reason to carry so much excess "automotive inventory".

http://www.mrmoneymustache.com/2011/11/28/new-cars-and-auto-financing-stupid-or-sensible/

Now if s/he was debt free, it'd be a little different discussion, but getting out of debt should be the A-number one priority.

I missed the part about debt.  That's a deal breaker.  Sell, buy cheaper car, use equity to get rid of bad debt. 

rtrnow

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Re: What about the car you already own?!?
« Reply #17 on: January 29, 2015, 10:44:27 AM »
Because of the outstanding debt, I would say sell it too. Sunk costs suck, but in your case it seems you can get all your money back or even profit. With no debt I might be tempted to keep it. However, I have no debt and still sold a paid off luxury car for a used honda fit. Two years later, no regrets. A side effect of older/cheaper/high mileage cars is that you/I don't care about little scratches, dings, etc. It's really been freeing. It also makes me less intimidated to do my own maintenance knowing the car is worth 8K not 35K.

I'm a red panda

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Re: What about the car you already own?!?
« Reply #18 on: January 29, 2015, 11:38:05 AM »
He said he was selling the car that he owes on.  The question is about keeping the other car.  If the gas guzzler is sold, I'd still keep the original car.

Is there other debt that the first post doesn't mention?

Eric

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Re: What about the car you already own?!?
« Reply #19 on: January 29, 2015, 11:58:51 AM »
He said he was selling the car that he owes on.  The question is about keeping the other car.  If the gas guzzler is sold, I'd still keep the original car.

Is there other debt that the first post doesn't mention?

The first post doesn't mention much.  But it does allude to other debt.

I am in the process of making some significant changes; getting rid of cable, frugal purchases and of course paying down debts!

DecD

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Re: What about the car you already own?!?
« Reply #20 on: January 29, 2015, 12:24:02 PM »
You're right- I wasn't considering debt.  I was considering me, in my situation, debt free, I'd keep it.  If you've got CC debt at 16% interest, for crying out loud pay it off however you can.
« Last Edit: January 29, 2015, 12:28:22 PM by DecD »

southern granny

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Re: What about the car you already own?!?
« Reply #21 on: January 30, 2015, 09:22:05 PM »
It is paid for and I say keep it and drive it for the next ten years. I drive a 2013 Hyundai.  I bought it at a good price mostly because of the warranty.  Since you only drive 10k a year, you will get the full benefit of the warranty as well.  Sure you can sell it and buy an older car, but it is not going to last as long as this one is... so I don't see a big benefit there.  With a wife and two small children you wouldn't want to go with too old of a vehicle.

Geldsnor

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Re: What about the car you already own?!?
« Reply #22 on: January 31, 2015, 03:53:40 AM »
Considering your yearly millage, it seems you could perfectly manage without a car. Sell it and put the excess dollars straight into your debts. You will save yourself a lot of cash after selling it as well, simply because you don't have the insurance, maintenance, gas etc.

Owning a car is luxury or necessity. not just something you can't live without!
« Last Edit: January 31, 2015, 03:56:59 AM by Geldsnor »