Slinks

Out of curiousity, I decided to price my tl (2005, 27k miles, non nav, auto) on edmunds. The private-party price is about 25k

This got me thinking...If I could get 25k for my car, should I sell it?

I paid about 32k for the car (including taxes & title)...so that would be a 7k depreciation.

Doing the math -- I've owned the car for 28 months, so 7k/28-months = $250/month. Not bad for the best 28 months of the cars life...

Also, a 2000 tl priced on edmunds has an $8800 private party price.
Given inflation, lets say that 5 years from now I can get $10,000 for my tl. That would mean that over the next 5 years, the car would depeciate (25k-10k)/(5years) = 3k/year = $250/month.

So the car will depreceate the same per year for years 2.5-7.5 as it did for the first 2.5 years --

This is completely contrary to the expected "the biggest depreciation takes place in the first few years". And in fact, it appears that I can expect a % increase in the depreciation rate...

Given all this, it looks like the best move now would be to sell the car...

Is there anything wrong with my math or my assumptions? Financially, can the case be made that we're better off selling our cars than keeping them? At what price would you start thinking of selling your cars?

Of course there are other factors such as
Negative factors:
1. I might not be able to get 25k for the car
2. The need to replace the sold car with another car
3. Any emotional attachment to the car
Positive factors:
1. The chance to drive something different (I'd buy a 2-seat sports car since I really dont need the back seats).

blazinginder

If you can get the price and want a change and don't need 4 seats, go for it

SuperStar

05 Aspec navi 16k on the clock.... 28k and it's gone

ndabunka

These cars have generally "better than average" resale but IMHO those prices aren't realistic. Acura dropped a LOT of '06 cars onto the market CHEAP at the end of '06. That $25K price is only reasonable IF you had NAVI (~$2K original cost) but since you could buy a non-Navi '06 recently for $29K with NO miles, you are going to have a hard time getting the premium you are seeking for a non-navi. Hey, I've got an '04 with 39K and NAVI. I'd take $22K for it and run!

lavo

looking into the used TL market, i want an 04-05 black manual Aspec navi TL...under 30k miles, that would realistically run me about 28k which isnt bad for what ive seen, without aspec i could get an 05 for about 25k, id LOVE to get one for 20k without aspec but its not realistic from what ive been seeing.

no intent to hijack the thread but whats a good place to buy used?

datmrman

At what price would I be willing to sell me car...

Given the amount of time, effort, and money spent on my car, $40K would get my attention.

I love my car. Its definitely a long term keeper.

paradigm

05 6spd w/out nav...13.7k on the odo...extended CPO warranty good until 7/2010...i'd take $27k.

ndabunka

Extended CPO's typical do not transfer on most cars (ie. BMW, Mercedes, etc all cover only the ORIGINAL buyer, not the "next" buyer). 14K for a 2005 does seem low but like I said before, only 6 months ago you could by a 2006 for $29K so I can't see how ANYONE would pay those $'s for year older car and a year of additional mileage when they could have simply bought a brand new car with ZERO miles for only $2K more. Heck, I'd take $35K for my 3 year old car...(similar wishful thinking)

JD TL-S

iTrader: (1)

In Dec 06 Acura was giving incentives on the new 07's making the 06 value go down. I KNOW, MY 06 TL NAV 4k miles, I won't tell you the trade for my 07 TL-S. SICK

ggesq

iTrader: (1)

r u sure? i thought Acura was giving incentives on the 06 not vice versa?

acurasofla

'04 SSM w/ only 12k miles. I would expect $25k would be a fair price. Original owner, always garaged and near perfect. New Michelin Pilot Sports. Call me!

soli1978

I asked the guy about transferring the warranty when I was buying. He told me that it is transferrable.

Kostyan

when I was shopping for a TL in December of 2006, saw a weird thing such as trade in values of similarly equipped 05 6spd NAVI and 06 6spd NAVI with similar miles....for some reason, the difference for a car with only 10K mi came up to be only $200.. but with 20K mi the trade in on 06 was even lower than on 05 with same miles.

Financially, it makes sense to get a car you love and keep it for 15 years without putting much $ into it, then realizing famed Acura resale value and sell the thing with 300K on the clock for $3000. The time may come in much sooner, if cost of repair is significant to overall car's value. I drove my 2000 Maxima for 6.5 yrs until had a problem that required a grand put in it when the trade in value was 5 grand.

But then again, if you keep trading, and even if you're payments remain the same, you're tying up your own money that could have been used for more important things in the life, such as education, retirement planning, family, vacations, a house. I can see an 18yr old do not care about those things and spend the $ on cars, but when you're pushing 30, it is right the damn time to start acting more responsibly. The decision is yours to make- it is so easy to f*** your life away on fancy cars but then remain on welfare and suck a major **** at retirement.

ndabunka

Of COURSE he did, he was a SALESMAN. If his lips were moving, he was lying. It's only natural. LOL! I guess my point is......Does it state the transferability IN WRITING? Is it an Acura warranty or a 3rd-party. If 3rd-party, is it from a company still in business? A number of them were sued for fraud, lost their case and were forced to fold up their tents. It's not like I am interested in your car so if you don't reply, that is OK but I have seen a number of guys getting bit by similar "assumptions" or "salesman's word" only to find out later that the salesman is either (1) no longer at the dealership, (2) lied through his teeth to get the additional premium on the commission or (3) The underwriter went belly up...Word to the wise, get it documented!

ndabunka

Actually, the WAY to do it is to take your equity from your last car (assuming a low residual of $6K) and use it as a down payment on the TL. This leaves you a "ownership" monthly payment of around $550 for anywhere from 48 to 60 months (depending on options like NAVI, A-SPec, etc). After 48 months, that original ~$35K car is still worth anywhere from $15 to $20K (for proof, take a look at the vaulation of an early model, reasonable mileage 2004 TL being over $20K RIGHT NOW (Is actuall more like $22K). After 48 months, it is paid off and ALL that equity is YOURS. Sure, you paid $6K up front and lost the use of those funds for the 4 years you were paying on it but you have also taken your original $6K and turn it into $20K (a $14K increase) during that period. The car is still a current body style so you can get the most $'s out of it at this point. "Driving it to the dirt" would make better sense if you bought an ALREADY used car. Rather, now you can take that same $20K equity, take the original $6K back out and put it in this bank and still have $14K to place down on a brand new $35K 2008 model car (you name the brand). You get lower payments $300-$400, $6K cash, a brand new car and your "buddies" are still having to fork out $550 for their EXACT SAME year model as yours LEASES. THAT is WHY and HOW leasing companies make money. Simple economics...

lavo

keep in mind u paid 14k to have a car 4 years, ehh not bad, but were in 07 not 08 so youd have to look at an 03 to call it 4 years.

ankur914

Simple!?!??! That blew my freakin mind! LOL! You must be a finance/business major ! Anyway, good explanation, learn something new everyday! Thanks!

Yadalloh

I am a Finance Manager who does auto economic valuations as a hobby. One factor that most people neglect when comparing between keeping or selling and buying something new is the tax (any place) & Title License (if at a dealer). When considering the cost of a new car (or new to you), factor these costs....

paradigm

the Acura CPO warranty transfers with the sale. i also verified that with my Acura dealership (after buying it...not before).

http://www.forbesautos.com/advice/sh...cpo_chart.html

just an fyi!

soli1978

I checked the acura care contract. You can transfer it one time for a $50 fee. The only thing I got hit by about the warranty was the cost. They cherged me $1900. But then I cancelled it and I will buy it online for $950 :-)

BLACKURA_NY

iTrader: (6)

ive got an 06 5AT Navi with 20k... over $10k in parts. i wouldnt sell it for under 30k (with EVERYTHING included)... stripped down? i'l take 25 - 26k

Kostyan

[QUOTE=ndabunka]Actually, the WAY to do it is to take your equity from your last car ...QUOTE]

I do see your point, and that was one of my arguments before the wifey to get a new car: it was worth ditching the old ride while it was worth something, in order to have a larger downpayment on a new car...but I grew tired of my old car... thats a different story. Your argument is good for someone who is young, single, and wants to drive a new car, but that WILL NOT SAVE MONEY over long run.

My point of view supports the goal of decreasing the car expense during the lifetime. Take a 40-year time span: you can own 4 cars or you can own 8 cars. Of course, 8 cars cost way more than 4 cars. While it does make sense to trade while your car is worth the most you can get, but that is putting you into lifetime payments: every month of those 40 years you will have a car payment! Personally, I doubt I'll be able to drive the same car for 10 years, but will keep her for 7-8 years, to have at least two years without car payment.

Do you realize that if you don't have a car payment, even $300/ month, this money can really add up over time, and multiply, if you invest wisely? For every year spent without car payment, you save $3500-6000.

ndabunka

[QUOTE=Kostyan]Your argument is missing a critical component, maintenance of an older vehicle. While it is true that a Honda will cost you less to maintain than, say a BMW but you will still have maintenance. In some cases, that maintenance can add up to $300 or $400/month. In the past I had a 1994 4-door Accord. It did fine but around 120K, it started to nickel and dime me with things like $100 here, $400 there. I'm older so $100 and $500 probably means less to me than it does to someone just getting started but still, who wants to sink $2,000 or $3,000 into maintenance on a 7 year old car? Air conditioners DO go out. CV joints do wear out, etc. That was one of my points. If what you are REALLY trying to do is to simply avoid a car payment, then you can always get a job in a city and take public transportation or similar life-style moves (Downtown condo's can be a great investment IF you get in early enough...Dallas right now or Charlotte about 5 years ago). At my stage in life I can easily afford a measley $500/month car payment for a relatively new car with no issues and 100% still covered under warranty. The only question is whether that $500/month goes into a Honda or a Lexus or even a Mercedes. Building equity through the years affords a driver those options. Leasing does not. I've owned a convertible corvette, a luxury BMW (740iL), a high performance AMG Mercedes (Zero-to-60 in 4.9 stock), a luxury Lexus (GX470), etc and never once paid more than $560/month and NEVER once been in a lease. In some cases, I even sold the cars for the price I originally bought them at or was able to drive them for only $1,000/year (when I bought them used as the AMG and the Vette). So, although I can see the point in not having a car payment, I (personally) do not think it outweighs intelligent spending.

ndabunka

As an example my "lifetime" annual cost on vehicles for the past 20 years has averaged been a little less than $2,500/year driving these nicer, recent model cars using these types of methods. If you simply "buy and hold" a 2004 Acura TL, you would have more than that in it over a 15/year period (including STANDARD maintenance). My way, I drive a car no older than 6 years old. In your case you have a 7-15 year old clunker with 200K+ miles 50% the way through your process.

So, my argument is valid for ANYBODY who wants to own a car "intelligently". For those "kids" (people under 30) who want to own (fairly) new car, it is THE best alternative to leasing. I'm 44 so this comes form years of experience. From buying cars at wholesale prices (manhiem), from ..... Just think about it, it can be done. It's not easy to do it but if you invest time and intelligence into the purchase process and are willing to buy what you can afford instead of what you "want", then it can be done (Sometimes you DO even get what you want as the examples of my "toy cars" referenced above).

Kostyan

Whats so intelligent in making $500 car payments all your life? Your argument is more valid for someone who does not want the hassle of dealing with an older car, and prefers to drive nicers cars than can afford...all of us are in the same boat. There is nothing wrong with wanting a fresh ride every year or so, it's just not financially feasible for anyone exceot who can pay cash for a car outright or making payments made from existing interest earning on savings account. What I am saying is that, especially true with Honda cars, keeping that clunker for a longer time, and going through a hassle of older car ownership, can be financially rewarding. Think of the hassle of cliping coupons when doing grocery shopping. You won't save with Fords lol but with Hondas, I very much believe that no repairs would exceed 20 grand that you'd spend on 500/mo car payments over the course of 5 yrs.

brettallica

-- insert rude comment here --

Your car is totally sick, dude, but no one in their right mind would spend $30k on it!

One of the things that sucks about modifying one's car is that it rarely equates to added resale value; at least added value that equals the cost of the modifications. You always lose when you modify your car! But that's OK, because it's all about what makes you comfortable when it's yours. I know I've dumped money into my car that I'll never get back, but I love what I've done.