Does it make sense to sell 2-year-old car and buy a new one?

[Lucky]

I paid 17.8K for new car 2 years ago. Put 4500 down. Took out a loan for 13.3K.

At this point, I could sell the car for around 13.5K. I have $8730 left to pay off.

Would it make financial sense to sell the car, take the ~$4700 leftover, and roll that into another car? It seems to me that that I am not losing much.

The only reason I am considering this is because the car has 48K miles and with the great resale value, there doesn't seem to be much downside unless I'm missing something. I'd have to make 2 more years of payments but then again the car would be 2 years newer, have warranty, etc.

 

[Pocatello]

Originally posted by: Lucky
I paid 17.8K for new car 2 years ago. Put 4500 down. Took out a loan for 13.3K.

At this point, I could sell the car for around 13.5K. I have $8730 left to pay off.

Would it make financial sense to sell the car, take the ~$4700 leftover, and roll that into another car? It seems to me that that I am not losing much.

The only reason I am considering this is because the car has 48K miles and with the great resale value, there doesn't seem to be much downside unless I'm missing something. I'd have to make 2 more years of payments but then again the car would be 2 years newer, have warranty, etc.

I see a lot of my coworkers do what you'd like to do. For me, I like to pay off my car and not worry about monthly payments.

 

[Ronstang]

Think about what you are posting. So you think paying $6550 a year to drive a car is acceptable? Boy are people like you great for the economy.

 

[UsandThem]

Does it make sense to sell 2-year-old car and buy a new one?

At this point, I could sell the car for around 13.5K. I have $8730 left to pay off

Does not make any sense to me at all. Keep it.

 

[msparish]

Originally posted by: Ronstang
Think about what you are posting. So you think paying $6550 a year to drive a car is acceptable? Boy are people like you great for the economy.

What are you talking about? If he sells, it's like he paid 4.3k for 2 years. That said, speaking from a purely financial perspective, keeping the used car is a better deal.

 

[Lucky]

Originally posted by: Ronstang
Think about what you are posting. So you think paying $6550 a year to drive a car is acceptable? Boy are people like you great for the economy.

huh? I've put in $5300 in payments, plus $4500 down. I'd be getting back about $4700. Overall, that's $5100, or $2650/year. Also, I am paid reimbursement for about 55% of the miles I put on my car each year.

 

[randomlinh]

2yrs newer vs 2 less yrs to owning a car... i think you're the only one who can make that value judgement. I would say it's kind of silly to do so, but knowing myself, if what i was replacing the car with had some things I wanted, I would probably do it and join the millions of people in more uber debt.

 

[Lucky]

I guess I'm not understanding why it's bad financial sense. Usually, most cars depreciate more than you owe early on in the life of the loan, making it bad financial sense to do something like this. But the car really hasn't depreciated much.

 

[doze]

Is there something in a car you need now that you didn't need when you bought this car 2 years? If the answer is yes then by all means upgrade. If your only reason to upgrade is to have a slightly newer version of your current car then don't waste the money.

My car is also worth more than I owe, but I only have about 6 months left then no more car payments for a long time. That's like having extra cash in my pocket every month.

 

[Aimster]

Buy a 2001 330CI with warranty.

Much better than a 2007 Corolla IMO.

 

[PAB]

Originally posted by: Lucky
I paid 17.8K for new car 2 years ago. Put 4500 down. Took out a loan for 13.3K.

At this point, I could sell the car for around 13.5K. I have $8730 left to pay off.

Would it make financial sense to sell the car, take the ~$4700 leftover, and roll that into another car? It seems to me that that I am not losing much.

The only reason I am considering this is because the car has 48K miles and with the great resale value, there doesn't seem to be much downside unless I'm missing something. I'd have to make 2 more years of payments but then again the car would be 2 years newer, have warranty, etc.

You bought something from detroit, didnt you?

 

[Ronstang]

Originally posted by: Lucky

Originally posted by: Ronstang
Think about what you are posting. So you think paying $6550 a year to drive a car is acceptable? Boy are people like you great for the economy.

huh? I've put in $5300 in payments, plus $4500 down. I'd be getting back about $4700. Overall, that's $5100, or $2650/year. Also, I am paid reimbursement for about 55% of the miles I put on my car each year.

You are right. My math is off. Sorry, have a headache this evening.

 

[everman]

Why do you need a new car?

 

[OS]

do you have to pay sales tax again?

 

[eelw]

Does it make sense - nope. But I have done it myself. Had my new 2000 Acura 1.6EL, trading it in 23 months later for my current car, a 2003 Civic Hybrid. In my case, I spent like $3,500 (cnd) each year owning my Acura.

 

[Lucky]

Originally posted by: everman
Why do you need a new car?

I don't *need* the new car. But I drive it a lot for my work, and would like to have the car under warranty. If I could trade up to an 07 and not lose much on depreciation with such high miles, it doesn't seem like that bad of a deal.

When I bought the car, I intended to keep it for a long time, because I'd be putting on so many miles. However, the expected residual value is actually much better than I expected and I would not be paying much out of pocket if I went to the 07 model.

You bought something from detroit, didnt you?

No, Japan.


Did I mention the car was in an accident 1.5 years ago and took 9500 in damage? It doesn't seemed to have caused anything structurally wrong (no frame damage), but for piece of mind I'd like to have a new one if it's not bad financial sense to do so.

 

[Lucky]

Originally posted by: OS
do you have to pay sales tax again?

I am assuming so. However, the 17.8K figure that I paid originally was out the door including tax.

 

[Willoughbyva]

Will you be putting a lot of miles on the new car?


I just bought a car myself. A 1993 Buick Lesabre Limited. It has over 140,000 miles on it and everything works on it. I drive 600 miles a week, so I wouldn't want a new car, I can't afford a new one anyway. I just got rid of my 1992 Buick Lesabre Limited with 215,000 miles on it. I owned it for 3 years and put 60 thousand miles on it.

Perry

 

[Lucky]

That's a second option I've thought about. Selling the car, essentially getting back my original down payment after repaying the loan, and then buying a used car for around 5K and then not HAVING to pay a car payment. Save some money every month for future repairs and I might come out ahead since I'd still be driving 25K miles a year.

 

[preslove]

If you weren't planning on paying it off and continuing to drive it then you might as well upgrade.

 

[newmachineoverlord]

This is the last month of the $3,150 tax credit for buying a Toyota Prius, so act now, get yours today! (You must take posession/delivery before the end of the month.)

My magic eight ball says that gas prices will "most likely" pick up again come november, and you drive enough that the investment will serve as a hedge against future increases.

 

[her209]

For a second there, I thought you were asking if you should sell your 2-year-old child to buy a new car. I was like, WTF!!?!@?!

 

[Willoughbyva]

Unfortunately I have to make payments on my used car. Can you do your own mechanic work?

You might be better off in the long run selling your car and buying another less expensive car. Get one with a good drivetrain though. The lesabre has a 3.8 with aod. That is a pretty durable drivetrain, plus it is very popular, so I can go to the junkyard and get parts very cheap. I had to replace the motorized radio antenna the other week, $12.00 at the junkyard. Where I am, there aren't a lot of foreign cars at the junkyard, so you would have to buy new parts.

 

[CTrain]

I have to ask what car you have.
Is it a Corolla ? Mazda 3 ? tC ?

 

[Lucky]

tc