Relocation - Financial question

[parafly]

Hello,

My wife and I are relocating from NJ to Denver, CO in two months. We are trying to make the best possible financial decisions regarding the move and would appreciate your input.

We do not currently have jobs lined up in Denver, but feel confident we can secure jobs relatively soon. We have 35K in savings. Other than relatively low balance student loans, our only debts are two car loans:

Car 1: 2005 Acura TL, 101K miles, $7800 balance, $588/month, 14 months left, value if sold: $10,500
Car 2: 2007 Honda Civic, 38K miles, $9200 balance, $263/month, 40 months left, value if sold: $12,500

If we decide to keep both cars, we would most likely ship one of the cars to Denver by truck for about $1,000 and drive the other car ourselves.

Our current plan is to keep one car so we can eliminate shipping costs. We are leaning toward paying off both cars, keeping Car 1, and selling Car 2. Paying off both cars would cut our savings in half, which may not be a great idea right before relocating without jobs. We would be under a ton of pressure to sell one of the cars before we moved.

Which car(s) would you pay off in full? Which car(s) would you keep/sell?

Thanks in advance for your input and thoughts.

[creditcardfree]

I'd sell the older one just because of the mileage. You would reduce your debt obligation by the payment of $588/mo. The proceeds COULD pay off the second car, freeing up the other obligation. I probably wouldn't pay the second car off until you both had employment.

Would you still be looking to get a second car? If so, I would just drive both cars, or attach one to a moving van instead of selling or shipping.

[Jillycd]

I would keep the 2nd car since it is 2 years newer and has significantly less mileage than the first car. Best of luck with your relo to Denver!

[parafly]

Thanks for the replies so far.

The reasons we are leaning towards keeping the first car over the second car:

1) Better make and model
2) We love the features (navigation, leather, hands free phone, heated seats, etc.)
3) We have already put so much money into this car and paid a ton of interest over the past 4 years.

[creditcardfree]

I think it would be fine to keep the first car. I was only turned off by it's mileage. Of course, your payments will be done sooner with that car as well. But keeping up a nearly $600 payment while unemployed could eat at a lot of your savings.

Good luck!

[Jillycd]

A $588 a month car payment on a car with 100,000 + miles that may have repair bills in addition to the high car payment is also something to think about. I understand all of the great features of the car... you certainly want to enjoy the car you drive when making payments on it.

[disneysteve]

I've got to agree with the others about keeping car 2. No contest in my mind to keep a car with 38K vs. 101K miles. I don't care how much you like the Acura. You're going to have the Honda for many more years. You'll make a nice profit and cut your monthly expenses significantly.

[scfr]

Another factor in favor of keeping Car2 (and selling Car1) is that you will get much better gas mileage on that long drive from NJ to CO.
If neither of you have jobs lined up, you certainly will not need 2 cars in CO!
Good luck with the relo.

[parafly]

Thanks for all the advice so far...it's really appreciated.

It looks like most people think we should sell Car 1 and keep Car 2. A couple of factors I forgot to mention previously:

We will be living in mountains, and Car 1 is better equipped to handle the snow and terrain.

We have a small window of time to complete a sale, and Car 2 would most likely be easier to sell. I don't think there is a big market of people who are willing to shell out more than $10 K on a car with over 100K miles.

[creditcardfree]

Personally, I think you will be fine regardless of which one you would sell. The higher miles, just make me wonder how long you will really hang on to it. You will definitely be putting more wear and tear on it, when you go into the mountains. Denver is more at the base of mountains, if I remember correctly.

[parafly]

Originally Posted by creditcardfree

Personally, I think you will be fine regardless of which one you would sell. The higher miles, just make me wonder how long you will really hang on to it. You will definitely be putting more wear and tear on it, when you go into the mountains. Denver is more at the base of mountains, if I remember correctly.

True, but we are planning to live in the foothills.

The mileage does concern me. It's obviously the number 1 factor holding me back, but I do find comfort in reading numerous stories where these cars last 250-300K miles. They are built to last.

[creditcardfree]

Hmm...maybe try to sell car 1 and if it doesn't sell, try the other. Or list them both and sell whichever one sells first. Just like flipping a coin!!

[croland]

I think with not having jobs lined up, the less you have to spend each month, the better. It's amazing how fast 34k can go, especially when you are moving into a new area.

[croland]

Oops 35k that is

[parafly]

Thanks for all the replies everyone!

To give everyone an update, we decided to sell Car 2 despite most of the advice we received here. I admit that it was an emotionally based decision, but I honestly feel we will be in good shape financially regardless of which way we go.

I feel that Car 1 will suit us better in the coming years. The main reasons we decided to keep this car is bigger size, more luxury features, better equipped to handle mountain roads, high end durability, and most of the interest on the loan has already paid.

We are now in the process of selling Car 2. Once the car is sold, we will pay off Car 1 which we will drive to CO.

When all is said and done, we will have the Acura which we own outright and about 35K in savings. Our only monthly obligation will be small student loan payments and we are hoping to secure housing for about $500/month.

[creditcardfree]

Thanks for the update. Keep us informed on that car sale.
Best wishes!

[snafu]

While the decision has been made...why not put both cars on Kitjiji or similar on-line site and see which cars draws interest. Sell what you can!
Do you have some leads on employment or support network in Denver? I wonder what skill sets gives you such confidence of employment.

[croland]

Good luck on the move. I went through two separate relocations and each one was exciting.

[am_vanquish]

Originally Posted by parafly

Thanks for all the replies everyone!

To give everyone an update, we decided to sell Car 2 despite most of the advice we received here. I admit that it was an emotionally based decision, but I honestly feel we will be in good shape financially regardless of which way we go.

I feel that Car 1 will suit us better in the coming years. The main reasons we decided to keep this car is bigger size, more luxury features, better equipped to handle mountain roads, high end durability, and most of the interest on the loan has already paid.

We are now in the process of selling Car 2. Once the car is sold, we will pay off Car 1 which we will drive to CO.

When all is said and done, we will have the Acura which we own outright and about 35K in savings. Our only monthly obligation will be small student loan payments and we are hoping to secure housing for about $500/month.

To be honest, this is no suprise. The posts from earlier this month really made it sound like you had already made up your mind ... you were just looking for some of us to help you justify it & feel better.

[parafly]

Originally Posted by am_vanquish

To be honest, this is no suprise. The posts from earlier this month really made it sound like you had already made up your mind ... you were just looking for some of us to help you justify it & feel better.

I knew I had that one coming.

My original post was also a gauge to see whether I should keep both cars, which ones to pay off, transport a car by truck, etc. So it's not a complete loss.

The advice given here did help me decide to pay off both cars and only keep one instead of both.