Downsizing Newer Car for Economy Car

[GHG7F0]

I own a 2016 Hyundai Hybrid Sonata I bought cash in July 2016 for $20500 plus tax etc. I'm going to retire in 6 years and I'm thinking I'm better off downsizing to a economy car. I found a Mitsubishi Mirage that gets 40 miles per gallon with only 37,000 miles for 7,000 plus tax. I could sell the Hyundai I think for 16,500 as it has only 12k miles. What's your thoughts?   Thanks

[1962colreb]

What year is the Mirage ? I'm not certain I'd make that trade unless I put few miles
on my car in retirement.  Have you driven the Mirage ? I see them advertised for 10k
new.  37k less miles and a full warranty might be worth it.

[Goldielocks]

What would you do with the money?

Hard to answer without knowing if this sum is important to your goals.

[rothwem]

The concept is sound, but I would not buy a Mirage. 

Go for a Yaris, Fit, Corolla or Prius, whatever is in your price range. 

[Dave1442397]

I wouldn't go near a Mirage either. There are lots of better and more reliable cars you could downsize to.

Here's what Consumer Reports had to say about it:

[EarthSurfer]

Economically, it's something of a wash - not a clear choice. The vehicles get similar gas mileage, and have similar warranties.

Looking at the wear and tear on the vehicles, the 25,000 difference in mileage is probably worth $0.25 / mile or $6,250. This points to keeping the Hybrid Sonata. If you account for the transaction costs (taxes, license fees, inspection & emissions fees), there really isn't any money to be saved in the long term.

Unless there is an immediate need for the $$$, the long term choice should be to keep the Hyundai and drive it until it dies.  The real savings will be the lower insurance cost when you can drop comprehensive and collision coverage, and lower maintenance from a vehicle that has been properly maintained through out its life.
 

[slappy]

Economically, it's something of a wash - not a clear choice. The vehicles get similar gas mileage, and have similar warranties.

Looking at the wear and tear on the vehicles, the 25,000 difference in mileage is probably worth $0.25 / mile or $6,250. This points to keeping the Hybrid Sonata. If you account for the transaction costs (taxes, license fees, inspection & emissions fees), there really isn't any money to be saved in the long term.

Unless there is an immediate need for the $$$, the long term choice should be to keep the Hyundai and drive it until it dies.  The real savings will be the lower insurance cost when you can drop comprehensive and collision coverage, and lower maintenance from a vehicle that has been properly maintained through out its life.

This.

I moved from a newer car to an older car once, but both cars were financed. I moved to the older car to cut my payments in half, allowing me to pay off the older one twice as fast. If the new car had been bought in cash, I probably would not have done that, unless I truly needed a chunk of cash. Even then, I probably wouldn't have done it.

The only thing I can think of that might skew the numbers is the registration cost. For example, my car costs $180 a year to register. My BILs new trucks costs $1000 to register. If there was that much of a different between the two cars you are considering swapping, that might skew the numbers toward changing. Otherwise, I can't really see the point.

[teamzissou00]

I'm not a fan of starting new threads, so i'll ask my question in this 'similar' thread.

to OP question, I agree with everyone who said to pick the FIT or Prius. 

My question, is the same but different.  I made a poor financial decision and got into a lease of a 2015 Passat.  I wanted out of my TDI and didn't want a car payment and didn't have cash.  So - instead of taking my equity and buying a 8k used car I did this.  Oh well, can't go back in time. 

Next fall I need to either buy the Passat, which will have about 20k miles on it for 14k all in, or get something different. 

My stats, my wife has a used Sienna with 150k miles on it still running fine.  We have three kids, currently 5, 3, and 1.  I need a vehicle that can fit 3 car seats across and not feel unbearable.  This is definitely my work commuter and not our standard car for 5, but I don't want it to be miserable. 

I've looked at some small SUV options like the CR-V and Forester.  With my 14k, they will have about 75k miles on them.  I also see Camry's with about 50k miles on them for that amount.  Or I could try to spend only 10k for something with higher miles. 

Does it make more sense to take a gamble on a used car with 100k miles to spend 10k, or to buy the Passat with only 20k miles on it for 14k?  Can't seem to figure it out in my head. 

Any advice appreciated.  Side note - I'm not a gear head.  I have a decent mechanic I trust, but I'm not a DIY'er. 

[moof]

I'm not a fan of starting new threads, so i'll ask my question in this 'similar' thread.
...
Any advice appreciated.  Side note - I'm not a gear head.  I have a decent mechanic I trust, but I'm not a DIY'er.
...

What is your commute like?  Does your wife also work, or is she SAH?  How many years do you need this second car for (i.e. what is your target FIRE date?)  Sounds like you have a people mover mini-van and then need a commuter to get to/from work, is that right?

Option 1)  Move close enough to work to allow walking/biking/transit for commuting.  Our second car barely gets driven now that I bike commute 90+% of the time, so it has allowed us to put off the its replacement for years.  Consider moving closer to work to allow you to get more exercise and/or time with family while also cutting down on commuting costs.

MMM has a whole post on this that is worth reading:
http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/

Option 2)  Go look for 100k mile cars with good longevity (prius, Fit, carolla, etc).  I bet with some planning ahead you can get a good beater commuter car for <$5-7k.

Option 3)  Buy out your lease.  I see this is stupid unless proven otherwise.  Go look up private party blue book data and decide if buying this car (that you don't sound very attached to) is a smoking deal or not.  Virtually every lease I have seen is setup such that the buyout is still a rip-off.

In any event, it sounds like you likely be in need of two vehicles in the next few years.  Budget for this and start setting aside the correct size monthly amount to allow you to get do these transactions in cash.

[teamzissou00]

I'm not a fan of starting new threads, so i'll ask my question in this 'similar' thread.
...
Any advice appreciated.  Side note - I'm not a gear head.  I have a decent mechanic I trust, but I'm not a DIY'er.
...

What is your commute like?  Does your wife also work, or is she SAH?  How many years do you need this second car for (i.e. what is your target FIRE date?)  Sounds like you have a people mover mini-van and then need a commuter to get to/from work, is that right?

Option 1)  Move close enough to work to allow walking/biking/transit for commuting.  Our second car barely gets driven now that I bike commute 90+% of the time, so it has allowed us to put off the its replacement for years.  Consider moving closer to work to allow you to get more exercise and/or time with family while also cutting down on commuting costs.

MMM has a whole post on this that is worth reading:
http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/

Option 2)  Go look for 100k mile cars with good longevity (prius, Fit, carolla, etc).  I bet with some planning ahead you can get a good beater commuter car for <$5-7k.

Option 3)  Buy out your lease.  I see this is stupid unless proven otherwise.  Go look up private party blue book data and decide if buying this car (that you don't sound very attached to) is a smoking deal or not.  Virtually every lease I have seen is setup such that the buyout is still a rip-off.

In any event, it sounds like you likely be in need of two vehicles in the next few years.  Budget for this and start setting aside the correct size monthly amount to allow you to get do these transactions in cash.

Thanks for the detailed response! 

Here's some answers:

What is your commute like? (8 miles - and not extremely bike friendly).   Does your wife also work, or is she SAH? (she is SAH)  How many years do you need this second car for (i.e. what is your target FIRE date?)  (I'm 37 - and FI age should be 50, but plan on working after)  Sounds like you have a people mover mini-van and then need a commuter to get to/from work, is that right? (Correct, but would like to be dependable and last for 10 years / 60,000 miles). 


Regarding biking to work, I'm in the Portland Area and the rain prohibits a lot of that.  I'm also in a business environment and would prefer to not be sweaty when I get to work after a 40 minute bike ride.  Still - please tell my why I'm screwed up here.  I also have instances where I'm called upon to pick a child up from pre-school and a bike would impact that.

As far as my lease buyout, I had 36k miles in the lease and i'll only reach 20k.  I'm maybe up 1-3k in value if I buy out, but these aren't hot sellers and don't hold their value too well it seems.  It sounds like the advice would mostly be to try to get a reliable commuter in the Honda/Toyota/Subaru family for 7-10k and save 4k-7k in cost from buying the Passat.