Car situation, advice needed.

[JoshuaHeckathorn]

How do you sell a car if there is still a loan on it? You don't have a clear title to sign over?

I guess if it's a local bank, you could just take the buyer to the bank, but what if it's GMAC or something?

It's fairly easy. The banks will handle everything behind the scenes...you just need to let your lender know what's going on. Call them up to get a payoff amount and then the buyer's bank will generally pay your lender (GMAC) directly and cut a check to you for anything remaining.

[jpg7n16]

since i have already invested $17k in the new truck.

Just a mindframe thing - cars/trucks are not investments. They are purchases.

You have already paid off $17k of the cost of this purchase, and are trying to pay off the loan that you borrowed to cover the expense of the truck.


Think of it like you bought a shirt from the mall 1 year ago. If you charged it on your credit card (aka borrowed money to cover the expense of the purchase), yeah you can sell the shirt to help pay off your debt, but obviously the shirt has gone down in value.

Does that mean that your shirt is also an investment?



I say this because if you change your thinking about cars/trucks, it will make the financially sound decision so much more obvious.

You never "invested" anything in your car, you've only paid off part of the purchase price.

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Advice: if you want to list it on Craigslist/ebay; do so. If that's too big of a hassle, sell to the dealership. Either way, sell the car.

Find a smaller used car you can afford the cost of (maybe $7-10k total). The less you borrow, the better.

[cjscully]

"If it ain't broke, don't fix it!" applies to this situation.

Yes he's made a bit of a financial blunder but he's driving a vehicle he knows is reliable and will last him a very long time (probably another 10 years - 11 total). He can also afford the payments. I don't think spending $37,000 on a vehicle every 11-12 years is really all that much. Since we're talking about a Silverado, it's also not unreasonable to think it might last longer than that.

Sure he could sell it and buy a used one for cash, but I'd be his truck would outlast the used vehicle he purchased. Then he'll need to buy a second one. Might even need to buy three during the expected lifetime of that pickup.

Stay the course.

[Tree0164]

I have never spent more than $15k on a car-I would sell and it buy something used in the 2-3 year old timeframe and then only if you need to do a loan do it for 24-36 months the most.

I bought our last car in cash and plan on not having another car loan again.

I really like David Ramsey advice and try to follow it as much as a possible on my car buying. Drive Free, Retire Rich - Automobiles - daveramsey.com

[nick__45]

I have never spent more than $15k on a car-I would sell and it buy something used in the 2-3 year old timeframe and then only if you need to do a loan do it for 24-36 months the most.

I bought our last car in cash and plan on not having another car loan again.

I really like David Ramsey advice and try to follow it as much as a possible on my car buying. Drive Free, Retire Rich - Automobiles - daveramsey.com

His truck is a little over a year old so it is not that far from the 2-3 years timeframe you speak of. He is better off keeping the truck and drive it to the ground. That's what I am doing with my brand new Honda, which I bought as a top of the line trim and cost me almost $25k. It will last me another 12-15 years. If someone buys a new vehicle, you got to keep it for at least 10 years, preferably 15 years and ideally 20 years and hand it down to your kids or grand-kids. If you sell it within 3 years because the newness has worn off or even less than 18 months because you realized you're a fool, then you'll be a bigger fool selling it. A trick is to not buy a car unless you have enough cash reserve to pay for it 3 times over. Then take out a HELOC to lessen the pain.

[nick__45]

"If it ain't broke, don't fix it!" applies to this situation.

Yes he's made a bit of a financial blunder but he's driving a vehicle he knows is reliable and will last him a very long time (probably another 10 years - 11 total). He can also afford the payments. I don't think spending $37,000 on a vehicle every 11-12 years is really all that much. Since we're talking about a Silverado, it's also not unreasonable to think it might last longer than that.

Sure he could sell it and buy a used one for cash, but I'd be his truck would outlast the used vehicle he purchased. Then he'll need to buy a second one. Might even need to buy three during the expected lifetime of that pickup.

Stay the course.

I agree with you. We all 'need' to have a fresh car once to know the pain. It is better to know the pain early in life and never stumble into another impulse car buy while at the dealership. A GM truck, if taken care off, tends to last 300k miles without any problem. Americans still build good trucks because that is where their efforts are at. New new Ford F150 should last 20 years, unless you abuse it or just get a bad lemon.

[cypher1]

I think this goes back to the original question of the OP being comfortable with his car payments, hesitant about selling and investing his money differently. If he was truly ok or loves the vehicle, this post wouldn't exist. The fact that there is doubt means he's considering different options.
I couldn't call this a financial blunder IF the owner enjoys the car and affordability. Reliability is another story. Any new car (+-2 yrs old) IMO had better last 10+ years. I'm not going to go into companies/models, but that would be my expectation for technology and safety.
This is clearly a need vs want topic for the OP to figure out on financial priorities. Dump the car, take the cash, go used, and invest previous payments, while risk auto maintenance. OR keep the payments, enjoy the car, but limit investment/saving. Neither options are wrong, but it goes back to accessing amount of risk to take on each decision/investment.

[jIM_Ohio]

"If it ain't broke, don't fix it!" applies to this situation.

Yes he's made a bit of a financial blunder but he's driving a vehicle he knows is reliable and will last him a very long time (probably another 10 years - 11 total). He can also afford the payments. I don't think spending $37,000 on a vehicle every 11-12 years is really all that much. Since we're talking about a Silverado, it's also not unreasonable to think it might last longer than that.

Sure he could sell it and buy a used one for cash, but I'd be his truck would outlast the used vehicle he purchased. Then he'll need to buy a second one. Might even need to buy three during the expected lifetime of that pickup.

Stay the course.

Just a mindframe thing - cars/trucks are not investments. They are purchases.

You have already paid off $17k of the cost of this purchase, and are trying to pay off the loan that you borrowed to cover the expense of the truck.


Think of it like you bought a shirt from the mall 1 year ago. If you charged it on your credit card (aka borrowed money to cover the expense of the purchase), yeah you can sell the shirt to help pay off your debt, but obviously the shirt has gone down in value.

Does that mean that your shirt is also an investment?



I say this because if you change your thinking about cars/trucks, it will make the financially sound decision so much more obvious.

You never "invested" anything in your car, you've only paid off part of the purchase price.

----------
Advice: if you want to list it on Craigslist/ebay; do so. If that's too big of a hassle, sell to the dealership. Either way, sell the car.

Find a smaller used car you can afford the cost of (maybe $7-10k total). The less you borrow, the better.

I agree with these two posts. There is a third opinion which I also subscribe to- a car is an investment if it allows you to earn more money.

For example, if you drive your car to work, there is an expense with that transaction (the cost of the car, the maintenance of the car, the gas) and a benefit to which is equal to the wage your company pays you.

For that formula to benefit you, you need to spend less on the car than the job pays you.
For this to benefit you more, you want that cost to be as low as possible for as long as possible.

I see cars as a cost, and it is important to control that cost and lock in a low cost for as long as possible.

Is it better to pay $700/mo for 4 years (34k total) then nothing for 11 years (so over 15 years you spent 34k or 2k per year)
or is it better to pay 5k every 5 years (15k over over 15 years) on cars which are beat up- and if you are paying 5k, will the car last you 5 years??- if that 5k car only lasted 3 years, you come out ahead. (if 5k car lasts 2 years, it is 35k over 15 years, if 5k car lasts 3 years, it is 25k over same 15 years).

Then look at the RISK of the car not being there or being available. If you travel for work you need a car EVERY DAY, and if you lose a client or two, the revenue side of that ROI equation drops (how much money you earn goes down), so you might not have 2 days or 2 weeks for a mechanic to fix the problem (or you incur costs of a rental or loaner, and that drives up the price of that 35k expense over 15 years).

So you need to analyze

a) the costs and ROI
my interpretation is do not sell the car- pay it off and drive it into the ground for next 10 years. Keeps your costs low and helps maximize ROI.
b) the risks of not having the vehicle- if you were in construction, for example, not having a full size truck has some risks (the rental replacing it might not be a full size truck, the costs of renting any replacement drive up the costs of the ROI side above)
c) Your needs for the vehicle- you can haul more in a full size truck, if you take same vehicle on a cross country vacation gas will "kill" you. If you drive a fuel efficient car you keep gas costs down, but its tough to tailgate the football game on the weekends.

[DebbieL]

I have had no problems whatsoever driving the wheels off of cars that were less than 5K. I bought a little Nissan back in 1992 for $1,500 and drove it for 10 years, and then someone rear ended me (hard) and it got written off. I'm currenly on year 2 of owning an 11 year old Monte Carlo I picked up for $4k - and have had no problems whatsoever. DH is on year 3 of a 6 year old Oldsmobile Alero we picked up for $7K, and it runs great also (it drives so beautifully I'm tempted to claim it for myself - but I doubt he'd part with it).

I'll never buy a new car again. I did it once, and once was enough for me (and it was nowhere near as expensive as your truck).

[atx]

Just a mindframe thing - cars/trucks are not investments. They are purchases.

Find a smaller used car you can afford the cost of (maybe $7-10k total). The less you borrow, the better.

thats my considering doing, im looking out for a good buy and when i do - ill trade in the truck for it. only downside is that my next vehicle is not a "small" car by any means.

"If it ain't broke, don't fix it!" applies to this situation.

Stay the course.

I keep telling myself this, even though i have the itch for something else.

So you need to analyze

a) the costs and ROI
my interpretation is do not sell the car- pay it off and drive it into the ground for next 10 years. Keeps your costs low and helps maximize ROI.
b) the risks of not having the vehicle- if you were in construction, for example, not having a full size truck has some risks (the rental replacing it might not be a full size truck, the costs of renting any replacement drive up the costs of the ROI side above)
c) Your needs for the vehicle- you can haul more in a full size truck, if you take same vehicle on a cross country vacation gas will "kill" you. If you drive a fuel efficient car you keep gas costs down, but its tough to tailgate the football game on the weekends.

very good advice, thanks!


so i've decided to continue making my payments until i find a good used lx470 that i will then run into the ground..

[nick__45]

thats my considering doing, im looking out for a good buy and when i do - ill trade in the truck for it. only downside is that my next vehicle is not a "small" car by any means.



I keep telling myself this, even though i have the itch for something else.

STOP RIGHT HERE. You had an itch last year and bought a super expensive truck, which you are obviously tired of even though it was a brand new truck. How long do you think you will like your next 'downsized' vehicle. And why not really downsize if you're going to downsize? I think you're setting yourself up for failure and disappointment. Just keep the darn truck and drive it and enjoy it and work harder and stop going out to eat too much. You know, sitting and the truck overlooking a hill or city doesn't cost a penny. The same is true for driveway fantasy but it looks weird just sitting in your driveway for hrs.