Should I Sell My Car?
Thanks for the well wishes on being a quitter!! Day 3 has been successful so far.
Soooo....I briefly mentioned that I was debating whether or not to sell my car. I will throw out all the data to you and you can help me decide (although, I think the answer will be quite clear).
I will break this down the following way:
a. background
b. true cost of operation of vehicle
c. Nada vs. Kelley Blue Book value
d. what to do with the proposed income from selling car and adjustment of budget with monthly savings
Background:
I own my car, a small SUV (Chevy S-10 Blazer w/ v6), in a major metropolitian city. I live in a condo building in which there is monthly parking at a cost of $100 a month. I live 5 blocks from public transportation that can get me to work or wherever I need to go. Also, my girlfriend moved in recently. We can not park another car in our building's garage, and all of the garages around us are full (within a 1.5 block radius). For the last 3-4 weeks, we have left her car parked on the street because it is free. However, we have not moved it once and used my car for everything because I can come and go as I please with the garage parking. Her car had to be moved this morning because of street cleaning and in the winter if there is snow on the ground the car would have to be moved. Therefore, we basically have an extra car sitting around (with a warranty and better gas mileage than mine). Downside of selling car would be what would happen if girlfriend and I break up. In that case I would say that if I had to buy a car I would buy a good used $5,000 car.
True Cost of Operation of Vehicle:
From 8/04 to 8/05, I incurred the following costs for having my car...
a. Insurance..........$2256.00 (living in a city sucks! average is $188/ month for insurance for me)
b. City Sticker........$80.00 (have to have this)
c. Gas....................$1,750.00 (14,000 miles per year, 16 mpg, $2.00 per gal of gas)
d. Parking..............$1,200.00
e. Oil Changes.......$120.93
f. Major Repairs.....$2,014.69 (Both front whell bearings, tranny and differential service, brake fluid flush, fuel filter, rear hatch actuator)
TOTAL for past year of operation (not including payments because I own it!) = $7,421.62. That's a cost of $1.89 a mile, including gas. So my drive to work costs about $47.00 a day!!!
Sharing expenses of gas, garage, oil changes, and the deductible for major repairs with my girlfriend with her car over next year should total 1,136.36 for me.
Nada vs. Kelly Blue Book:
Looking into the value of my vehicle if I sell I went to nada.com and kbb.com. After typing in my vehicle information I was astounded between the difference between these two used car pricing guides.
Trade-In Value: Nada = $8,900 KBB = $6,700
Retail Value: Nada = $11,125 KBB = $11,005
Private Party Value: Nada does not provide KBB = $8,260 - $8,875
After looking up these values I thought it interesting that they are very different on the Trade-In value, but based on what I have seen and if I was going to put my car up for sale, I would ask about $9,000, as it is in great condition and I have all service records for it.
Income from Sale and adjustment of budget:
By selling my car, I can further my debt payoff and accelerate it very quickly. With this and the addition of my ESPP (Employee Stock Purchase Plan) and Restricted Stock Awards at the beginning of next year, I would pretty much have my CC debt paid off in less than 5 months. This would also include adjusting my budget and pushing all of the extra money I would be saving from this decision for the next 5 months to paying off my card. Oh and I can start an emergency fund, of $1,500 for the time being as well. Not too bad of a turnaround for five months of time.
Let's all hear what you have to say about my situation. I think you can tell which way I am leaning!
Soooo....I briefly mentioned that I was debating whether or not to sell my car. I will throw out all the data to you and you can help me decide (although, I think the answer will be quite clear).
I will break this down the following way:
a. background
b. true cost of operation of vehicle
c. Nada vs. Kelley Blue Book value
d. what to do with the proposed income from selling car and adjustment of budget with monthly savings
Background:
I own my car, a small SUV (Chevy S-10 Blazer w/ v6), in a major metropolitian city. I live in a condo building in which there is monthly parking at a cost of $100 a month. I live 5 blocks from public transportation that can get me to work or wherever I need to go. Also, my girlfriend moved in recently. We can not park another car in our building's garage, and all of the garages around us are full (within a 1.5 block radius). For the last 3-4 weeks, we have left her car parked on the street because it is free. However, we have not moved it once and used my car for everything because I can come and go as I please with the garage parking. Her car had to be moved this morning because of street cleaning and in the winter if there is snow on the ground the car would have to be moved. Therefore, we basically have an extra car sitting around (with a warranty and better gas mileage than mine). Downside of selling car would be what would happen if girlfriend and I break up. In that case I would say that if I had to buy a car I would buy a good used $5,000 car.
True Cost of Operation of Vehicle:
From 8/04 to 8/05, I incurred the following costs for having my car...
a. Insurance..........$2256.00 (living in a city sucks! average is $188/ month for insurance for me)
b. City Sticker........$80.00 (have to have this)
c. Gas....................$1,750.00 (14,000 miles per year, 16 mpg, $2.00 per gal of gas)
d. Parking..............$1,200.00
e. Oil Changes.......$120.93
f. Major Repairs.....$2,014.69 (Both front whell bearings, tranny and differential service, brake fluid flush, fuel filter, rear hatch actuator)
TOTAL for past year of operation (not including payments because I own it!) = $7,421.62. That's a cost of $1.89 a mile, including gas. So my drive to work costs about $47.00 a day!!!
Sharing expenses of gas, garage, oil changes, and the deductible for major repairs with my girlfriend with her car over next year should total 1,136.36 for me.
Nada vs. Kelly Blue Book:
Looking into the value of my vehicle if I sell I went to nada.com and kbb.com. After typing in my vehicle information I was astounded between the difference between these two used car pricing guides.
Trade-In Value: Nada = $8,900 KBB = $6,700
Retail Value: Nada = $11,125 KBB = $11,005
Private Party Value: Nada does not provide KBB = $8,260 - $8,875
After looking up these values I thought it interesting that they are very different on the Trade-In value, but based on what I have seen and if I was going to put my car up for sale, I would ask about $9,000, as it is in great condition and I have all service records for it.
Income from Sale and adjustment of budget:
By selling my car, I can further my debt payoff and accelerate it very quickly. With this and the addition of my ESPP (Employee Stock Purchase Plan) and Restricted Stock Awards at the beginning of next year, I would pretty much have my CC debt paid off in less than 5 months. This would also include adjusting my budget and pushing all of the extra money I would be saving from this decision for the next 5 months to paying off my card. Oh and I can start an emergency fund, of $1,500 for the time being as well. Not too bad of a turnaround for five months of time.
Let's all hear what you have to say about my situation. I think you can tell which way I am leaning!
posted by Financial Fruition @ 10:32:00 AM
3 Comments:
If you do decide to sell your car, I suggest you try CarMax. They will give you a quote on your car and you have a week to decide.
Thanks for the comment I went to CarMax and they told me they would give me $6400 for my car. Ouch, don't think that will work for me, but I now understand how they are making their money!
Forget CarMax, they are crooks on trades just like any other dealer. The best they will give you is KBB trade in value good condition (regardless). I too, have noticed the huge difference in NADA and KBB trade in values. I wish I could find a dealer that would honor anywhere close to NADA's recommendation. However, who do you think the dealerships will use?
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