Choosing Which Car to Sell
My wife and I have each been lucky enough to have our own vehicle for more than a decade (major age hint drop). Vehicles have become a part of our daily routine. Recent changes in our life have now offered us an opportunity to make the major move from two vehicles to one. We now live about two miles away from our jobs, we live 1 block from a major bus line that takes us to within a few blocks of them, and we don’t have any consistent commitments directly before or after work.
You could say that the combination of these factors has made it a no brainer, right? Not exactly. The thought of not always having my own personal vehicle to get me around in whatever situation I may need it for has been a little difficult to accept. It’s a convenience thing. I had become accustomed to the idea of always being a car owner, almost looking at ownership as a right or duty. What’s been even more difficult to decide is which one I should sell off!
So, Which Car Should I Get Rid of?
Let’s take a look at the profiles, and at the same time look at the factors you should consider when deciding which vehicle you should sell. Personally, I am most concerned with the financial, longevity, ethical, and functional characteristics of the vehicles:
Corner #1: Pontiac Grand Am
- Model year: 2000
- Miles: 116,000
- Motor: 4 cylinder, 2.4 liter, automatic
- $ left in loan payments: $0 – the car is entirely paid off
- Insurance cost: annually – $129, monthly – $11
- Fuel cost on estimated 3,000 miles driven/year: annually – $535, monthly – $45
- Total estimated cost of ownership (excluding maintenance): annually – $672 , monthly – $56
- Carbon footprint based on an estimated 3,000 miles driven per year: 1.6 tons of CO2 emitted
- Gas Mileage according to actual user reports on the fueleconomy.gov site: low – 18 mpg, high 26 mpg, average 21.9 mpg
- Gas Mileage according to EPA: city – 19, highway – 28
- Issues or other factors: the vehicle is missing a rear view mirror from a rare run-in with a hobo and when you use the blinker it takes 2 minutes for the blinking noise to stop running. These things might make the vehicle difficult to sell. On the other hand, they are somewhat annoying to me personally. Other than that the vehicle runs perfectly and could probably get another $50K miles on it.
Corner #2: Pontiac Vibe
- Model year: 2003
- Miles: 60,000
- Motor: 4 cylinder, 1.8 liter, automatic
- $ left in loan payments: $7,500 ($216/mo. for about 3 more years)
- Insurance cost: annually – $426, monthly – $35
- Fuel cost on estimated 3,000 miles driven/year: annually – $439, monthly – $37
- Total estimated cost of ownership (excluding maintenance): annually – $3,456, monthly – $288
- Carbon footprint based on an estimated 3,000 miles driven per year: 1.3 tons of CO2 emitted
- Gas Mileage according to actual user reports on fueleconomy.gov site: low – 27 mpg, high – 34 mpg, average – 31.1 (I took a 1,500 mile trip in this car once and hit 35 mpg)
- Gas Mileage according to EPA: city – 25, highway – 33
- Issues or other factors: The car was previously owned by a smoker and now and then on a hot day a lingering odor will come back from the dead, which can drive me mad as a non-smoker. Other than that, it runs great, no issues. This car is great at hauling things around as well, with rear fold down seats and a roof rack. The Grand Am simply can’t compete in these categories and as a homeowner, cargo space is a factor.
- This vehicle has a 3 year warranty remaining on it. Not quite bumper-to-bumber, but covers just about everything besides general maintenance. Right after I bought it, I had to have the radiator completely replaced, a $600 job, and didn’t pay a dime.
Soliciting your Feedback: Which Car Should I Sell??
I’d like to collect reader feedback over the next week and then I’ll come back with an ultimate decision in a future post. Here’s what I’d like to get your opinion on:
- Which car you think I should sell off and why?
- What are the characteristics that you would be concerned with the most?
- Have I missed any major points of consideration that you would consider?
I’d personally sell the Vibe. While it’d probably last you longer than the Grand Am, I’m assuming (and you’ll want to consider this as you’d know) that even if the Grand Am died in a year you’ll probably be able to get a better interest rate for a car loan now than you were able to get when you got the Vibe. Plus, I doubt you have so many situations in which the extra hauling capacity is necessary that you’d spend more than $2800 a year on renting something that would fit whatever you’re lugging around.
If you’re in an area where you’d get less for the car than you have on the loan, however, I’d keep it.
I would sell whichever car’s resale value is a higher percentage of how much it cost you. This is probably the Vibe. If you don’t need the space, get rid of the Vibe. Though as Becca said, if you can’t get the loan value, it may be a harder decision to sell it. I’d say if you can get close to the loan value, do it anyway, I’m sure you can find the room in your budget to throw a bit extra at the car loan until its gone.
Sell the Grand Am and use the $$ to pay off the Vibe. With gas prices so high you’ll want the more fuel efficient car.
Sell the Vibe. It’s a tough decision to make, but if I was faced with those options I would keep the Grand Am. You could sell the Grand Am for approximately $3,500 and the Vibe would sell for about $8,000. It is going to cost you $2,784 more per year to keep the Vibe than it will to keep the Grand Am. Take some of that money you save after selling the Vibe and have some minor problems with the Grand Am fixed. As Becca said if you need space every so often rent a van/truck. I have a Cavalier with the same engine as the Grand Am and except for a small oil leak it is running strong at 180,000 miles.
Sell them both Pontiacs are crap.
@ Becca, Katharine: I bought the Vibe two years ago and my interest rate on the Vibe is 6%. I’m not sure what the standard rate is now, and it’s hard to predict where it will go. What I can say, is it seems like there’s a whole lot of 0% interest rate promos going on right now. Good point regarding rent-a-cargo, if needed.
@ Anon: Your comment brings up an interesting point. My estimate of total miles driven of 3,000 per year would only save me about $100/yr. However, things change in life, and if either my or my wife’s work situation changes, that $100 could become a lot higher.
@ Trevor: Despite Grand Am’s having terrible track records for issues, the quad4 2.4L is solid as a rock, and recognized by mechanics as such.
@Nathan: Believe me, the thought has crossed my mind. The Suzuki SX4 AWD, 30 mpg, $16K MSRP, Subaru Impreza 5 door and a few other crossovers have piqued my interest.
1 major edit – and curveball, perhaps – the vibe has a 3 year warranty remaining on it. Not quite bumper-to-bumber, but covers just about everything besides general maintenance. Right after I bought it, I had to have the radiator completely replaced, a $600 job, and didn’t pay a dime.
Schmit – I wanted to see reader’s viewpoints on the matter. There are a number of different ways you could look at things – longevity of the Grand Am, insurance of a warranty with the Vibe, and increased functionality – do these things add up to making the Vibe a better keep, despite the higher costs? If you look in pure financial terms over the next three years, the choice is clear, as the numbers indicate.
A few considerations:
Premise 1) You seem to hardly drive these cars at all. With you and your wife’s combined usage it sounds like you’re filling up a single tank of gas per month.
Premise 2) With so little gas usage, your environmental impact is substantially easier to compensate for than the typical driver.
Premise 3) With so little gas usage, the increase of fuel prices seems to have a marginal effect. Fuel prices could increase 200% and you’d still pay substantially less overall with the Grand Am.
Consideration 1) If you care about the environmental impact, the $2.8k/yr you save financially should be able to more than compensate for the additional .3 tons co2 via offsets, with a good amount of $ to spare.
Consideration 2) The accumulation of wealth by someone with environmental concern is a positive externality in itself.
Consideration 3) The above premise rely heavily on you and your wife remaining at using one tank of gas per month. If your lifestyle/habits change over the years and one of you ends up driving substantially more it could throw the balance far in the other direction both environmentally and financially.
I would sell the car with the payments (vibe) and start saving a what you would have paid in payments every month in a high yield savings – or a mutual fund.
By the time you need to get a new car in a couple/few years- you can just pay cash for a car that is a couple years old. Wash rinse repeat.. :)
G.E. I agree with a previous comment. Sell the Grand Am to help pay off the P. Vibe. By doing this you reduce your costs while still keeping the more fuel efficient, reliable vehicle that has a warranty.
“I would sell the car with the payments (vibe) and start saving a what you would have paid in payments every month in a high yield savings – or a mutual fund.” – my thoughts exactly. Dump the debt and pay yourself versus paying the banks.
In the long run, when it comes to your personal finance, the obvious choice is to ditch the vibe. You can havey our $ work for you and allow it to compound or you can give your $ to the bank. I’m sure they are more than happy to compound it for you.
I don’t see any figures on the amount of interest you would be paying out over the remaining life of the loan. Do you know this amount? It’s an important factor.
Selling price of this vehicle is very reasonable.
I’m leaning towards you keeping the Grand Am, just because I’m a Grand Am fan
But weighing up the pros and cons, it seems the better choice would be to sell it rather