Author Topic: What to do with an expensive luxury car  (Read 1442 times)

Kryzhovnick

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What to do with an expensive luxury car
« on: January 05, 2020, 12:01:51 AM »
Hi Mustachians!

I'm in real need of advice, as my husband and I don't know what to do.
TLDR: Bought a luxury car before discovering FIRE. Owe $44k in loan, highest dealership offer $41k, listed online for remaining loan amount (no one is interested). Is it better to sell now to a dealer, take a loss on sell/loan difference and move on?

Long story: About a year ago, right before discovering FIRE, my husband bought a luxury SUV (2018 Audi SQ5 with a bunch of premium features). I'm not going to say that I had nothing to do with that, because I did give my blessing for this purchase. After $7k upfront payment, we ended up with nearly $53k car loan. The euphoria of owning a luxury car dissipated a month later and we realized how badly we messed up. We've been talking about shifting to an economy car for a while and about 2 weeks ago we pulled the trigger on buying a high MPG gently used comfort car (all cash, as MMM advised).  Right now we would like to sell the Audi, but owe too much on the loan. We can sell it to a dealer for $41k and take a $3k loss or wait for someone to offer more (not guaranteed, as the car keeps depreciating even by just sitting in the garage). Looking for advice on what to do.

The reason we bough a second car before selling the first one is because I started a new job that requires me to travel 3-4 days a week and I get reimbursed for work-related mileage. My calculations show that projected monthly reimbursement would cover gas, insurance, depreciation and maybe even some maintenance. Work trips of 600-700 miles/month in 18mpg of premium gas vehicle just didn't seem like a smart thing to do.

MilesTeg

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Re: What to do with an expensive luxury car
« Reply #1 on: January 05, 2020, 01:38:29 AM »
Hi Mustachians!

I'm in real need of advice, as my husband and I don't know what to do.
TLDR: Bought a luxury car before discovering FIRE. Owe $44k in loan, highest dealership offer $41k, listed online for remaining loan amount (no one is interested). Is it better to sell now to a dealer, take a loss on sell/loan difference and move on?

Long story: About a year ago, right before discovering FIRE, my husband bought a luxury SUV (2018 Audi SQ5 with a bunch of premium features). I'm not going to say that I had nothing to do with that, because I did give my blessing for this purchase. After $7k upfront payment, we ended up with nearly $53k car loan. The euphoria of owning a luxury car dissipated a month later and we realized how badly we messed up. We've been talking about shifting to an economy car for a while and about 2 weeks ago we pulled the trigger on buying a high MPG gently used comfort car (all cash, as MMM advised).  Right now we would like to sell the Audi, but owe too much on the loan. We can sell it to a dealer for $41k and take a $3k loss or wait for someone to offer more (not guaranteed, as the car keeps depreciating even by just sitting in the garage). Looking for advice on what to do.

The reason we bough a second car before selling the first one is because I started a new job that requires me to travel 3-4 days a week and I get reimbursed for work-related mileage. My calculations show that projected monthly reimbursement would cover gas, insurance, depreciation and maybe even some maintenance. Work trips of 600-700 miles/month in 18mpg of premium gas vehicle just didn't seem like a smart thing to do.

Cut your losses and move on. The likelihood of the loss getting worse with time (due to depreciation and definitely due to interest paid) is high. Especially with a luxury vehicle.

six-car-habit

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Re: What to do with an expensive luxury car
« Reply #2 on: January 05, 2020, 01:39:03 AM »
 Bring the car to another dealer or 2 , and a CARMAX if there is one near you to see if any of them will better the offer. This assumes you'll never want an SQ5 again [ pretty cool car ] , because if you do you may as well keep that one.  Anyhow , if you'll be happier without it, take the 41K, chalk it up to experience , and drive on in your other vehicle.

neo von retorch

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Re: What to do with an expensive luxury car
« Reply #3 on: January 05, 2020, 04:28:46 AM »
Quote
... you'll never want an SQ5 again...

Actually hopefully the above is irrelevant. You've had your expensive lesson. You can want things and not buy them. The buying gives such temporary satisfaction.

Do your due diligence to get a few offers. Drop your private listing to a bit ($1500-2000) above the dealer offers and try to find a way to cash flow the difference if it comes to that (which you would likely be doing with the dealer anyway).

Overall though the depreciation at this point is likely steep at times, so move quickly.

Bernard

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Re: What to do with an expensive luxury car
« Reply #4 on: January 06, 2020, 05:17:37 PM »
Getting $41K when you owe "only" $44K sounds like a hell of an opportunity to me to get out of it. I've heard many times from people who would get only 55% of what they owe. That Audi's depreciation will not end for many years to come. So you'll lose $10K all in. A lesson in life, and you'll benefit from it for the rest of your life. Move on, and count your blessings. I've spent insane money on the coolest cars for decades 'til I have seen the light. Now I drive cheap but dependable cars and enjoy the money I save and can invest as much as I have enjoyed driving the expensive cars.

caleb

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Re: What to do with an expensive luxury car
« Reply #5 on: January 06, 2020, 07:38:46 PM »
$3k seems like a very small price to pay the dealer to make this gigantic liability do away.  Take the offer immediately and move on with a lesson learned.

use2betrix

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Re: What to do with an expensive luxury car
« Reply #6 on: January 06, 2020, 08:36:39 PM »
Wow.. Paid 61k on a 2018 and a year later your’e getting 41k for it. How many miles are on?

In 2013 I bought a brand new F250 for $56k. I sold it in 2017 with 77k miles for $40k...

reeshau

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Re: What to do with an expensive luxury car
« Reply #7 on: January 07, 2020, 12:27:32 AM »
Sell it now, if you have the $3k difference in cash.  (Or can cash flow it)  You recognize that the mistake you made was in purchasing it.  Maintaining it on an ongoing basis is going to generate additional costs: insurance, gas, more payments, repairs and maintenance.  Cut your losses now and move on--it won't get better / more opportune.  It may *look* like it, specifically if and when you pay off the loan.  But that's only after a long trail of monthly and other costs.

honeybbq

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Re: What to do with an expensive luxury car
« Reply #8 on: January 07, 2020, 11:03:09 AM »
3k is not that much to learn a hard lesson. I'd cut your losses and move on.

ketchup

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Re: What to do with an expensive luxury car
« Reply #9 on: January 07, 2020, 11:13:57 AM »
You already lost the money.  Sell it, eat the 3k.  Lesson learned.  If you keep it, it'll just cost you even more.

JLee

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Re: What to do with an expensive luxury car
« Reply #10 on: January 07, 2020, 12:20:20 PM »
It'll just depreciate more the older it gets.  I'd get out of it and get something cheap to run -- spreadsheet time.  An EV probably makes a lot of sense given work travel and mileage reimbursement.

PGSD

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Re: What to do with an expensive luxury car
« Reply #11 on: January 07, 2020, 04:04:54 PM »
Agree with everyone. Take it to Carmax for a bid and sell to whoever has the higher bid ($41K dealer or Carmax).

I believe Carmax bids are good for 30 days? If so and they're the "high bidder", you could try selling on Craigslist for almost a month to try and get more money (take a likely additional car payment, insurance, and your time to meet with potential buyers into account...).

jamaicaspanish

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Re: What to do with an expensive luxury car
« Reply #12 on: January 07, 2020, 05:42:58 PM »
I agree with the sell to cut your losses crowd.

However,
I recently sold a car to Carvana. 
They paid me 15% more than CarMax (and several other dealers) offered.
And the transaction was completed online and in my driveway.
They arrived with a check.
After inspecting  the vehicle and driving it around the block, they drove it away.

So a strong recommendation to get a quote from Carvana.

Kryzhovnick

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Re: What to do with an expensive luxury car
« Reply #13 on: January 28, 2020, 01:24:28 PM »
Thank you everyone who responded. I appreciate all the advice. It made the decision much easier to make. As many of you said - lesson learned (hopefully for life).