Should I sell my car?

[Leo]

I need help and can't decide. My question is should I stay with the car or buy an economy car?

I bought a 25k full size sedan car couple years ago. I owe about less than 6k now and car is probably worth 16k trade in. I can pay off the loan within 2 years. My plan is to drive the car for a long time but due to bad neighborhood, we just signed a new apartment lease for $1500. We like the new place but it was a huge increase. (previous rent is $965). I'm not sure if I can have best of both worlds (car + apartment). Assuming I could sell my car for 16k and pay the balance of 6k. I will have 10k to buy a used car.

Recent grad wife earns about 20k/year but earning potential 1 year out 30k, probably 40-50k 3 years out. I earn 70k and if calculated monthly, my take home is around $4300. I get half of wife salary per month which is $700. Half of her salary goes to her IRA, savings to buy a used car, shopping. We're mid 20's.

INCOME = $4300 + $700 = $5000
EXPENSES = with new rent, will be around $3815 + $400 goes to ROTH IRA = $4215

Savings account (EF) = $5000
IRA = $10,000
No CC Debt

GOAL
1. Build Emergency Fund (6 months = $18k)
2. Pay off my Student Loan

I started my Masters degree to advance my career. Hopefully I can get 6 digits salary with degree and 5 years experience in the industry.
Student Loan - $6000 (Payment not required yet)
Upcoming Student Loan $3000 (June 2015), $3000 (September 2015), $3000 (January 2016).

Staying with my car
PROS
1. I love the car. I am a car enthusiast
2. I hate this word but "status symbol" (car looks so good)
3. Luxury (huge, comfortable, safe)
CONS
1. Gas is so bad (20mpg combined)
2. I have really small "air to breathe" financially because of monthly payment

Buying economy car
PROS
1. Gas will be better (25-30mpg combined)
2. Will give me a little "air to breathe" financially by not having car payment
CONS
1. I will probably dislike the car.
2. No status symbol.
3. No luxury (compact)
4. I will lose money because car buying is always high and selling is always low

[LeanneRob]

I have a similar issue at the moment. My car is sitting doing not much (RX8) but I like it, i'd save on costs but I find it hard to part with it but ultimately I expect I will sell.

Maybe go look for some used cars first, test drive them with no commitment and see how you feel then

[Ethan60]

I think you can compromise on luxury for one year or you can look for other income sources around you, like investing in stock market or earning through online channels.

[electric_mikey]

i think you should definitely sell your car.

and in general you should only get a car when it is totally necessary, in a situation where you want to save money for investments.
enjoy luxury later after you have the money to do so.

[pflyers85]

Sell the car. $10000 is plenty of money to buy a reliable small to mid sized sedan. The pro's you list are purely luxury and vanity driven. Excessive car payments are one of the biggest self imposed obstacles people put in their own way to achieving financial freedom.

[autoxer]

Buying economy car
CONS
1. I will probably dislike the car.
2. No status symbol.
3. No luxury (compact)
4. I will lose money because car buying is always high and selling is always low

I switched from a financed $25k car to an $1,800 econobox when I wanted to save up for a house downpayment. I'm also a car enthusiast and really enjoy a car that is fun to drive but I had no problem adjusting. One advantage to driving an old econobox, is that you just don't care what happens to it. My car got hit while parked, crunching the headlight and denting the hood and fender, but I didn't get very upset. I deposited the insurance check, bought a new headlight for $50, hammered out the dent and kept driving it. You could barely tell anything happened. The car is disposable, not a critical part of your emotional well being. And all of that 'luxury' is overated. Don't get me wrong, I now enjoy a car with bluetooth and heated seats, which is nice, but the car isn't financed and that makes me happier than any creature comfort. I actually miss the old econobox, it was a classic sentra SE-R with a manual transmission, which was quite fun to drive.

[bjl584]

It's a hard to say if you should sell your car. How much is the payment and term of the loan? How long do you plan to keep it once it's paid off? Or, do you see yourself trading it before it's paid off? Any major financial decisions coming in the next few years? House? Kids? More college?