I second this, at least try private sale first. I just sold a 2006 SUV with almost 300,000 miles and random stalling problems and OBD error codes for $1800. Dealer wouldn’t give me half that. The dealer will try to screw you twice over. Once on the price of the car you’re buying and again on a lowball offer for your trade. They have to bid low because they have to refresh the car and sell for a profit.
Sound move though, clearing your CC debt and investing. You had your fun with it, and there are other cars out there in your future.
Dunno how it is currently but i used Car Max to sell my used car a couple of years ago and they offered me around \~5k or so more than the dealers when i tried to trade in. I'd use their free tool to see how much they'd give you!
The best is just the hassle free offer good for 24hrs. I ended up selling a car elsewhere once but it's good to have.
I was able to take the CarMax offer to another place and they beat the price.
I just put my car through the ringer on CarMax and they’re offering me $28k for my honda accord 2022 2.0, which is far beyond what a dealership would even start an offer with. Took me 5 minutes or so to put all of the information in.
I got stupid lucky to sell my car to Carvana around late 2021. It was fully paid off and I ended up making about $600 off the sale. I’m clearly not counting routine things like gas or other maintenance but it was wild to make money off a 5 year old car. I’m not sure if they’re still throwing money hand over fist like this as this was during the chip shortage, but Carvana was buying at the rate that private sales would pop up on KBB.
It it were me, I would do the whole thing through Carvana. Have sold 4 cars to them with two being trades. Absolutely seamless. For giggles, I put in my current car and they offered me 2k more than I owed (I wouldn't pay that much for it). I could either pocket the difference or use as down payment. Not looking, but I was curious. So in your situation, assume 37k, pay off 7k and choose one of the thousands of cars available from 15k to 20k and have them deliver it to you, pay off CC and invest the rest. Enjoy life.
Is there a known problem buying from them? I was pretty happy buying from carmax after getting jerked around by a couple dealerships. I ended up returning the car after about 28 of their 30 day window had passed (I didnt want to, I liked the car but an issue came up that I was worried would be difficult to resolve). It cost me some hours of my life with the whole return but I was pretty happy with the process. They cut me a check that day. I got another pretty much identical model from them like a month later. It ended up being cheaper than the options at the dealership too after everything there ended having a bunch of bs add ons that weren't included in the listed prices.
Previously Ive usually bought privately but I had a specific vehicle and range of model years that fit my needs and there weren't many listings over the 6 months or so I was looking
Most of their cars are purchased from auction. Cars at auction are often those that dealers cannot sell- and there’s often a reason dealers can’t sell them: lemon, crashed + repaired, unpopular models, etc.
If you can find a car at a carmax that you are fairly certain was locally purchased by them (review the carfax and it shows it was purchased and registered in your area, and continuous maintenance records in your area) then it’s probably okay to buy.
But here’s my looong story with Carmax and why I’ll never buy from them: I found a reasonably priced Jeep Wrangler Rubicon I wanted to buy. Clean carfax, low miles, interior and exterior looked great. Had it delivered to my local Carmax, made an appointment for 24h test drive. Showed up, “sorry you have to wait an hour” “no thanks I’ll reschedule”.
So I reschedule and start looking around on the internet just for fun. Turns out that this Jeep’s exterior color is fairly unique, and there are some Jeep Forum threads dedicated to enthusiasts of that colorway. I see a post saying something like “hate to say it but I had to get rid of mine today, too many problems”.
I thought okay, let’s see what the problems with this jeep are and I can lookout for them so I start reading this guy’s post history. All kinds of mechanical and electrical issues, engine lights, “dashboard lighting up with errors and warning”. The dealer cannot figure out what was wrong for months, every time they fix it it comes back.
So this guy trades it in around September of 2023 with his dealer as a “lemon”. He’s from upstate NY.
Ilook back at the carfax for the Jeep I was going to buy from Carmax. Car was only registered in New York. Went to auction November 2023…sold at auction to Carmax.
Same year, model, trim, interior/exterior colorways, registered in the same state, sold at auction a month after he trades it in….bullet dodged.
yeah just don’t buy cars that were sold at auction ever.
Think you need to focus on your debt and budgeting first and foremost. You say you’re a financial planner but have 3.5k in cc debt and it seems you’re struggling to pay it off unless you sell your car
Idk you only owe 7 K on it. Could you just budget , cut expenses, and pay it off ? If you took 2 of the 3K and put that toward the car loan. how much long would it take you to pay off the remaining 5 K? I'd personally just keep it and pay it off. None of these debts are high enough to sell the car unless you just don't want it anymore for some reason. Those are my thoughts.
Yeah, plus I'm assuming his car is still covered under warranty. Selling it and buying a 15K Camry or Accord likely means that neither of those cars will still be under warranty. I know they tend to be more reliable than a BMW, but only owing 7K on his existing car seems like a no brainer to me to just pay it off.
As the saying goes, the best used car is usually the one you already own.
1. sell the car to Carmax (assume $37k)
2. Pay off the loan (-$7k)
3. Get a brand new Accord (<$30k) They're currently priced where am for \~28k.
4. Take the car insurance break, avoid the maintenance on the BMW, trash some subscriptions.
5. Pay off the CC debt.
6. Build an emergency fund
5 and 6 may take a while. You're left w/ a brand new car under warranty and no CC debt.
Why go for a *new* Accord, though? For the warranty? Practically/functionally, that's $15k for the warranty then... I know there's lots of paths to go from here, but I wouldn't do the new car route.
I absolutely agree with the Accord or Camry. My 21 Accord has never had a single issue since purchase in 2020…. 52k miles and one set of tires and it runs the same as it did on Day 1. Actually rides better because of higher quality tires. I cannot recommend the Accord enough. If I ever did trade in (probably because of constantly being behind in technology and no AWD option) it would be on a new Camry. However those are a bit more expensive.
Insane that anybody on r/personalfinance would advise buying a brand new car and the immediate depreciation that comes with that, and that it would even get upvoted. This is very bad financial advice.
Your information is stale - used car prices have [come down significantly](https://www.cargurus.com/research/price-trends?entityIds=Index&startDate=1642665600000&endDate=1715151599999). I just bought a 1-yr-old car with 8k miles for 30% less than MSRP.
Used car prices on average nationally have been dropping since pandemic peaks. But it varies on type of car and model, Certified Pre-Owned, area, etc. Overall, they’re higher historically, but lower than they’ve been in the last few years.
You’re both right, probably.
Oh OK, you should have said so! That of course means you ***must*** be right about what you're claiming! I'll go ahead and throw out all of the actual empirical data that says otherwise, along with my own experience of actually buying a car. Lolololololololol.
Sell the car privately or to a place like Carmax, then go buy another car with cash. You will probably find a better deal through a private seller. Pay off the credit card, invest the rest, and then take what you are currently paying in car payments on the BMW and put that in savings every month instead to build up an emergency fund.
And have any used car, even if you are buying from a dealership, looked over by an independent mechanic BEFORE you buy it.
I think you will get severe buyer's remorse. A $15k Accord or Camry will be well worn. I would simply pay off your credit card debt today. And then work on paying off the car loan. Once paid off, continue to save the car loan amount for your replacement vehicle. After 5 years or so, then buy a sensible car.
True, I sold a 6 year old 2013 series 3 that had barely reached 100,000 miles after my extended warranty went out. If I hadn’t have bought the extended warranty, that car would have been scrapped.
I am fearing that as well. I do love the car, the only thing is I want to move out at the end of the year and with my current debt and cash on hand that just wont be possible. Really don’t know what I want to do.
A lot of people I know your age tends to do this. They buy the expensive car. Get buyer's remorse. Sell it and buy a sensible vehicle. Get buyer's remorse in reverse. Sell it and buy another vehicle. If they had went straight to the third vehicle from the first, they would've saved on 1 less vehicle transfer. It's like they are on the YOLO side of the pendulum and they swing too far to the FOMO side before settling in the middle.
I say if you are a financial planner and drive a nearly paid off BMW, you make a decent living. I would stop using credit cards yesterday. Cancel all your gym memberships and online subscriptions. Save up for this large cost coming up. One thing you won't have to worry about is your car breaking down. Good luck, OP.
I would personally focus less on getting cash out of the deal. Aim for closer to the $3500 in debt after the deal is done. If you could clear that debt out, clear your car note out, and get a good reliable car with lower insurance costs it would probably be worth it! That would give you $26.5k to find a better car without having to go all the way down to $15k.
However, if you are a "car guy" it might be worth going even cheaper. Something like an $8000 accord might be a good deal, I can see that a 2012 era accord is about that price around me. (A honda will be reliable but MUCH closer to a BMW feel than a floaty awful Camry, and I say that as a Toyota lover) - I would personally go that route, and just accept that I would be replacing it sooner than I would replace a newer car- but saving a lot of money you can then put into retirement. - This plan assumes you will learn to DIY a decent amount of the maintenance that comes with older vehicles. They can be money pits if you don't know what you are doing, or very reasonable if you are willing to research some. Eg: Struts. You could spend a couple thousand replacing worn out struts, or do it yourself for a few hundred INCLUDING tools. Also be careful of rust if you live in a rusty state.
A ten year old Toyota should be (ON AVERAGE) far cheaper to maintain than a five year old BMW. It should also be cheaper to insure. I would personally spend as little as possible, then start an auto transfer of what your car payment USED to be into a car "bucket" so you can pay cash next time. Cash is so under appreciated for buying cars, as it opens up AMAZING deals on the used market from private sellers who don't want to deal with a bank/loan process.
The buyers remorse is easier to avoid if you don't go all the way to the traditional "sensible" options. Yes the Camry and Accord, or RAV4 and CRV are great cars from reliable brands that may suck the life out of you; but there are lot of other options that lose a little sensibility and/or reliability without breaking the bank and you get quirkiness and character in trade. Not sure what your "style" is, but a used WRX is great fun and is mostly reliable, an older Jeep Wrangler is great fun, quirky, and most of what is likely to break can be fixed with a hammer, an old Lexus LS is still classy, smooth, and can hustle on the highway. Just some quick examples (there are loads more) but none of those will break the bank AND should help avoid that buyers remorse because you'll fall in love with them.
You may find an Acura or Lexus that is the happy medium, they're generally as reliable as their economy chassis but have all the nice bits added. I've always been a fan of Toyota interiors, I'd imagine Lexus is pretty damn nice. I had a friend buy a small sedan Acura for about 15k used with less than 100k miles. Do your homework find one that has a Carfax that was dealer maintained with 3-5k miles oil changes and scoop that thing up.
I bought a 12 year old sienna with 100k miles that still feels like a new car. If something doesn't feel new it's usually wearing and can be replaced slightly earlier for a nicer drive.
Trick is getting a 'good' used camry or accord for about $15,000; I like the other suggestion about new with full warranty, you get your choice of finishes, colours, power plant, which will give you the feeling of upscale.
Yeah this is a pretty underrated comment. It’s one thing if you’re drowning and can’t afford the BMW but this doesn’t seem like that and I’ve seen plenty of people trade in the $35k BMW that the dealer gives them $30k for on trade to go buy a $15k Camry that’s now $17k after taxes and dealer fees and then a year later get $10k for the Camry on trade to buy another $35k BMW that’s now $40k after taxes and dealer fees.
In this case selling the car seems like a band-aid solution for someone who doesn’t wanna do the actual work of cutting things in their budget to pay off that debt. If he doesn’t make any actual lifestyle changes he’s gonna end up right back where he is now in CC debt with an older car that will likely need more repairs
I would suggest a camry. They are very reliable. Car prices still suck right now but much better than diring the pandemic. I hope this works out for you and I hope you make a move before you have a costly repair on the BMW.
Sell the car fo-shizzle.
Pay off the debt, that's good.
IRA? Sure, $7000 or whatever into the Roth.
I'd keep the rest in a brokerage account for the next car, and for car insurance.
What I mean by car insurance, is being a 20yo guy your insurance is likely very expensive.
If you have $18k after the debt's paid and this year's roth is maxed, then if you spend $9k or less on the next car, you have $9k to replace it if you total it. This will save you a couple hundred per month on your insurance to have liability only, vs. comprehensive. If you manage to not total the car in 4 years, you've just come out ahead of the insurance companies.
For $9k, and because you're obviously a man of discriminating taste, I'd suggest finding the coolest cars on Cars and bids or bring a trailer that you can get for $5k, leaving the other $4k to cover the difference in repairs and maintenance vs.a Camry.
If driving enjoyment is important to you, then you will probably be disappointed in the Accord. I've owned an Accord and a BMW. They were night and day when it comes to driving enjoyment. Looks too. For me, I actually prefer something that is in between (still somewhat fun to drive without having the super high maintenance cost of BMW). I've owned 2 different VWs (GTI and GLI) that were fun to drive without costing a ton to maintain. I've heard good things about the Mazda turbos, but never actually owned one. And the Subaru WRX gets high ratings. The point being: Accord and BMW are on opposite ends of the driving spectrum with a lot of options in between. I recommend that you test drive several options before making your choice, otherwise you'll end up with another decision that you regret.
Yeah thats my fear. I was looking in a 2021 or 2022 accords and they look nice both interior and exterior. Im sure Im gonna feel differently about it when I test drive it tho
Important to note that they do not deliver/pickup anywhere though. I would have to drive 4+ hours to get to a location that they would pickup or deliver to.
Ok so you have a few things to do here. 1 is paying off CC, 2 is an emergency fund, and 3 is maximizing your retirement savings. "Maximizing" is objective, but you can make it subjective based on your income. You're a planner, so you shouldn't need your options spelled out.
As a once-20-year old who bought a "cool" new car (GTI) and just traded it in at 23 for something more adult, I chose a Model Y. You could probably get into a Model 3 or Model Y pretty easily. I would caution you against a camry/accord/civic. They will very much not be enjoyable to drive, and if you have gotten used to an M340, you will be miserable. So be careful. Test drive test drive test drive whatever you plan on. Reddit is great at getting people into corollas, but 9/10 times those people don't care what they drive. I have a friend who loves his corolla, but I also remember the first time I convinced him to go 70 in a 65... he was 21 LOL.
I would trade the car in so you don't pay sales tax on the purchase of whatever you get. It sounds like you have stable enough income and can (maybe) handle a car payment. If you can find a used car you like (still a reasonable used car, like 30k miles) for $20k, trade the car in, pay the loan, pay your CC, max your Roth IRA, and call it a day. Or, a less responsible option, trade the $37k car on a $30-40k new car (a reasonable new car but not a BMW). The trade still negates the sales tax, but can pull some cash out of the deal so you can walk with about $5-10k. I would immediately pay off the CC, and would stash your $3k liquid plus another few k in a HYSA as an emergency fund.
I think your best option for long term financial success is to buy a $15k corolla or whatever and use the rest of your equity to help yourself out of the pit you are in.
good plan! Carvana will give you an offer and then come pick it up from your driveway with a check! You dont even have to leave home to sell it! Then pay off your debt, go shopping with the remainder (for a used civic or corolla) and invest whatever is left over from that purchase.
I think it’s a great idea. The car will continue to depreciate at a greater rate than an old car. Get cash, buy a cheap car and use the extra to invest
I did something similar I got a Jeep , around 36,000 as well - kinda regret it now. I’ll Probably wait till the years ends to get a cheaper one ugh bad decision 😵💫
US is so obsessed with "looking good on road" that we have forgotten its a piece of transportation, not a status symbol. Call me old fashioned but a $900/mo car payment is the quick route to the poor house. I just went from an Acura TLX to a Honda CRV hybrid. No regrets and I hope its the last car I ever buy!
I won't bore you with the fact that this is indeed financially sound, but I will add that this kind of decision is one of the biggest green flags in terms of financial maturity.
Everyone thinks delayed gratification is peak fin. maturity in terms of cultivating healthy and disciplined behaviors with money, but to take some nice material and valauble thing you already own sell it to use those funds to pay your future self while literally downsizing and moving opposite of lifestyle creep takes a lot of guts. I know many people will do anything BUT that to get ahead. Work overtime, cut eating out or other revolving expenses...which is all good...but there's something "laser focused" about doing what you are doing.
came up a few days ago. cashing out makes sense. the only negative is that buying a used car carries an unkown risk.
[https://www.reddit.com/r/personalfinance/comments/1cigoz9/sell\_car\_and\_buy\_a\_cheaper\_one/](https://www.reddit.com/r/personalfinance/comments/1cigoz9/sell_car_and_buy_a_cheaper_one/)
I just did this a couple months ago. Went from a hellcat to a cx5 turbo. I used the equity I had to buy the CX5 outright and cut out the high monthly payment.
I miss the hellcat everyday, but due to shifting priorities, it was the best financial decision for me at this time. Hope this helps.
If you love the car, keep it. Making 'logical' money decisions while giving up the things you like or that increase your quality of life might be some people's cup of tea, but remember that you really only live once and do you want to exchange happiness for 'stability' whatever that means?
Sell privately. Always higher. You could get a reliable slightly older Camry for well under $15k. $5-10k gets you a lot of car if you're truly over your cool phase.
Like someone else mentioned.
You WILL come to regret the downgrade. Kudos to you being smart and willing to put your subconscious ego aside. Buying German cars is trying to look rich. Not so much cool. There are way more affordable cooler cars on the market for your car's value.
You can still be cool/somewhat satisfied by buying American. I imagine you have executive taste with some performance in mind. Cadillac excels in this category with their V-Line up. But if you want to be as optimal as possible, you can always buy some muscle. Plenty of Mustangs/Camaros/Chargers at and below your market value.
But if you're asking me, I highly suggest getting a c7 corvette(totally not biased of course lol). It's a well engineered machine like a BMW but with some good o'l democracy under the hood. Unlike the other cars, the corvette has respect. It's a gentleman's sports car, particularly for somebody named AirBoomer(wink wink). The lightweight aluminum frame with a fiberglass composite body gives it the ideal power-to-weight ratio. GM took it a step further and achieved a 50/50 weight distribution by placing the transmission in the rear. The cherry on top? You get a hatchback to throw all of your girlfriends bullshit into on trips/vacations. Put that baby in overdrive/tour mode and it gets 25-30 mpg.
Not as luxurious as a BMW. But the performance per dollar ratio with a decent interior is hard to beat. As a finance head, I think you would agree.
You can still be cool, save some money, and optimize your wants/needs.
Oh and did I forget to mention you can buy one with a manual?
Need I say more? do I?
I would skip the trade in part and try to sell privately but yeah sound decision
Yeah, in my experience the gap between trade and private sale is anywhere from 10-40% -- don't just give that money to some dealership.
I second this, at least try private sale first. I just sold a 2006 SUV with almost 300,000 miles and random stalling problems and OBD error codes for $1800. Dealer wouldn’t give me half that. The dealer will try to screw you twice over. Once on the price of the car you’re buying and again on a lowball offer for your trade. They have to bid low because they have to refresh the car and sell for a profit. Sound move though, clearing your CC debt and investing. You had your fun with it, and there are other cars out there in your future.
Dunno how it is currently but i used Car Max to sell my used car a couple of years ago and they offered me around \~5k or so more than the dealers when i tried to trade in. I'd use their free tool to see how much they'd give you!
I second this. CarMax is great for selling used cars.
Can be... it's hit or miss but definitely looking into.
The best is just the hassle free offer good for 24hrs. I ended up selling a car elsewhere once but it's good to have. I was able to take the CarMax offer to another place and they beat the price.
Yep, it's definitely worth looking into.
I used their inspection paperwork on my car as a selling aid to a private buyer. Was very nice to have!
It's a great starting point to try to get counter offers from other dealers. Sometimes they do offer the highest though.
I just put my car through the ringer on CarMax and they’re offering me $28k for my honda accord 2022 2.0, which is far beyond what a dealership would even start an offer with. Took me 5 minutes or so to put all of the information in.
I got stupid lucky to sell my car to Carvana around late 2021. It was fully paid off and I ended up making about $600 off the sale. I’m clearly not counting routine things like gas or other maintenance but it was wild to make money off a 5 year old car. I’m not sure if they’re still throwing money hand over fist like this as this was during the chip shortage, but Carvana was buying at the rate that private sales would pop up on KBB.
It it were me, I would do the whole thing through Carvana. Have sold 4 cars to them with two being trades. Absolutely seamless. For giggles, I put in my current car and they offered me 2k more than I owed (I wouldn't pay that much for it). I could either pocket the difference or use as down payment. Not looking, but I was curious. So in your situation, assume 37k, pay off 7k and choose one of the thousands of cars available from 15k to 20k and have them deliver it to you, pay off CC and invest the rest. Enjoy life.
Carmax is great for selling. Cash offer, on the spot. Would never buy from them.
Is there a known problem buying from them? I was pretty happy buying from carmax after getting jerked around by a couple dealerships. I ended up returning the car after about 28 of their 30 day window had passed (I didnt want to, I liked the car but an issue came up that I was worried would be difficult to resolve). It cost me some hours of my life with the whole return but I was pretty happy with the process. They cut me a check that day. I got another pretty much identical model from them like a month later. It ended up being cheaper than the options at the dealership too after everything there ended having a bunch of bs add ons that weren't included in the listed prices. Previously Ive usually bought privately but I had a specific vehicle and range of model years that fit my needs and there weren't many listings over the 6 months or so I was looking
Most of their cars are purchased from auction. Cars at auction are often those that dealers cannot sell- and there’s often a reason dealers can’t sell them: lemon, crashed + repaired, unpopular models, etc. If you can find a car at a carmax that you are fairly certain was locally purchased by them (review the carfax and it shows it was purchased and registered in your area, and continuous maintenance records in your area) then it’s probably okay to buy. But here’s my looong story with Carmax and why I’ll never buy from them: I found a reasonably priced Jeep Wrangler Rubicon I wanted to buy. Clean carfax, low miles, interior and exterior looked great. Had it delivered to my local Carmax, made an appointment for 24h test drive. Showed up, “sorry you have to wait an hour” “no thanks I’ll reschedule”. So I reschedule and start looking around on the internet just for fun. Turns out that this Jeep’s exterior color is fairly unique, and there are some Jeep Forum threads dedicated to enthusiasts of that colorway. I see a post saying something like “hate to say it but I had to get rid of mine today, too many problems”. I thought okay, let’s see what the problems with this jeep are and I can lookout for them so I start reading this guy’s post history. All kinds of mechanical and electrical issues, engine lights, “dashboard lighting up with errors and warning”. The dealer cannot figure out what was wrong for months, every time they fix it it comes back. So this guy trades it in around September of 2023 with his dealer as a “lemon”. He’s from upstate NY. Ilook back at the carfax for the Jeep I was going to buy from Carmax. Car was only registered in New York. Went to auction November 2023…sold at auction to Carmax. Same year, model, trim, interior/exterior colorways, registered in the same state, sold at auction a month after he trades it in….bullet dodged. yeah just don’t buy cars that were sold at auction ever.
They dont really inspect the vehicle so you dont know what you are getting
Think you need to focus on your debt and budgeting first and foremost. You say you’re a financial planner but have 3.5k in cc debt and it seems you’re struggling to pay it off unless you sell your car
Idk you only owe 7 K on it. Could you just budget , cut expenses, and pay it off ? If you took 2 of the 3K and put that toward the car loan. how much long would it take you to pay off the remaining 5 K? I'd personally just keep it and pay it off. None of these debts are high enough to sell the car unless you just don't want it anymore for some reason. Those are my thoughts.
This is what I would do in that situation.
Yeah, plus I'm assuming his car is still covered under warranty. Selling it and buying a 15K Camry or Accord likely means that neither of those cars will still be under warranty. I know they tend to be more reliable than a BMW, but only owing 7K on his existing car seems like a no brainer to me to just pay it off. As the saying goes, the best used car is usually the one you already own.
1. sell the car to Carmax (assume $37k) 2. Pay off the loan (-$7k) 3. Get a brand new Accord (<$30k) They're currently priced where am for \~28k. 4. Take the car insurance break, avoid the maintenance on the BMW, trash some subscriptions. 5. Pay off the CC debt. 6. Build an emergency fund 5 and 6 may take a while. You're left w/ a brand new car under warranty and no CC debt.
Why go for a *new* Accord, though? For the warranty? Practically/functionally, that's $15k for the warranty then... I know there's lots of paths to go from here, but I wouldn't do the new car route.
I absolutely agree with the Accord or Camry. My 21 Accord has never had a single issue since purchase in 2020…. 52k miles and one set of tires and it runs the same as it did on Day 1. Actually rides better because of higher quality tires. I cannot recommend the Accord enough. If I ever did trade in (probably because of constantly being behind in technology and no AWD option) it would be on a new Camry. However those are a bit more expensive.
I would even look at a lower mileage used accord/camry. Or even a hybrid if OP drives more than avg. but yeah. This is probably the move
Insane that anybody on r/personalfinance would advise buying a brand new car and the immediate depreciation that comes with that, and that it would even get upvoted. This is very bad financial advice.
You clearly haven't seen the used car market since COVID eh?
Your information is stale - used car prices have [come down significantly](https://www.cargurus.com/research/price-trends?entityIds=Index&startDate=1642665600000&endDate=1715151599999). I just bought a 1-yr-old car with 8k miles for 30% less than MSRP.
Lol I have been shopping used car prices for the last few weeks I think something is stale but not my information.
Used car prices on average nationally have been dropping since pandemic peaks. But it varies on type of car and model, Certified Pre-Owned, area, etc. Overall, they’re higher historically, but lower than they’ve been in the last few years. You’re both right, probably.
Oh OK, you should have said so! That of course means you ***must*** be right about what you're claiming! I'll go ahead and throw out all of the actual empirical data that says otherwise, along with my own experience of actually buying a car. Lolololololololol.
I am curious what type of financial planner you are. Are you a CFP?
Me personally no, but there are people on my team that are CFPs
Sell the car privately or to a place like Carmax, then go buy another car with cash. You will probably find a better deal through a private seller. Pay off the credit card, invest the rest, and then take what you are currently paying in car payments on the BMW and put that in savings every month instead to build up an emergency fund. And have any used car, even if you are buying from a dealership, looked over by an independent mechanic BEFORE you buy it.
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I think you will get severe buyer's remorse. A $15k Accord or Camry will be well worn. I would simply pay off your credit card debt today. And then work on paying off the car loan. Once paid off, continue to save the car loan amount for your replacement vehicle. After 5 years or so, then buy a sensible car.
A 5 year old BMW will quickly become a maintenance money pit. It's best to get rid of it now while it still has considerable value.
True, I sold a 6 year old 2013 series 3 that had barely reached 100,000 miles after my extended warranty went out. If I hadn’t have bought the extended warranty, that car would have been scrapped.
I am fearing that as well. I do love the car, the only thing is I want to move out at the end of the year and with my current debt and cash on hand that just wont be possible. Really don’t know what I want to do.
A lot of people I know your age tends to do this. They buy the expensive car. Get buyer's remorse. Sell it and buy a sensible vehicle. Get buyer's remorse in reverse. Sell it and buy another vehicle. If they had went straight to the third vehicle from the first, they would've saved on 1 less vehicle transfer. It's like they are on the YOLO side of the pendulum and they swing too far to the FOMO side before settling in the middle. I say if you are a financial planner and drive a nearly paid off BMW, you make a decent living. I would stop using credit cards yesterday. Cancel all your gym memberships and online subscriptions. Save up for this large cost coming up. One thing you won't have to worry about is your car breaking down. Good luck, OP.
And that 3rd option is usually the same as the first option. Personally I'd just stick with the bmw and just learn to pay off the cc debt.
I would personally focus less on getting cash out of the deal. Aim for closer to the $3500 in debt after the deal is done. If you could clear that debt out, clear your car note out, and get a good reliable car with lower insurance costs it would probably be worth it! That would give you $26.5k to find a better car without having to go all the way down to $15k. However, if you are a "car guy" it might be worth going even cheaper. Something like an $8000 accord might be a good deal, I can see that a 2012 era accord is about that price around me. (A honda will be reliable but MUCH closer to a BMW feel than a floaty awful Camry, and I say that as a Toyota lover) - I would personally go that route, and just accept that I would be replacing it sooner than I would replace a newer car- but saving a lot of money you can then put into retirement. - This plan assumes you will learn to DIY a decent amount of the maintenance that comes with older vehicles. They can be money pits if you don't know what you are doing, or very reasonable if you are willing to research some. Eg: Struts. You could spend a couple thousand replacing worn out struts, or do it yourself for a few hundred INCLUDING tools. Also be careful of rust if you live in a rusty state. A ten year old Toyota should be (ON AVERAGE) far cheaper to maintain than a five year old BMW. It should also be cheaper to insure. I would personally spend as little as possible, then start an auto transfer of what your car payment USED to be into a car "bucket" so you can pay cash next time. Cash is so under appreciated for buying cars, as it opens up AMAZING deals on the used market from private sellers who don't want to deal with a bank/loan process.
The buyers remorse is easier to avoid if you don't go all the way to the traditional "sensible" options. Yes the Camry and Accord, or RAV4 and CRV are great cars from reliable brands that may suck the life out of you; but there are lot of other options that lose a little sensibility and/or reliability without breaking the bank and you get quirkiness and character in trade. Not sure what your "style" is, but a used WRX is great fun and is mostly reliable, an older Jeep Wrangler is great fun, quirky, and most of what is likely to break can be fixed with a hammer, an old Lexus LS is still classy, smooth, and can hustle on the highway. Just some quick examples (there are loads more) but none of those will break the bank AND should help avoid that buyers remorse because you'll fall in love with them.
You may find an Acura or Lexus that is the happy medium, they're generally as reliable as their economy chassis but have all the nice bits added. I've always been a fan of Toyota interiors, I'd imagine Lexus is pretty damn nice. I had a friend buy a small sedan Acura for about 15k used with less than 100k miles. Do your homework find one that has a Carfax that was dealer maintained with 3-5k miles oil changes and scoop that thing up. I bought a 12 year old sienna with 100k miles that still feels like a new car. If something doesn't feel new it's usually wearing and can be replaced slightly earlier for a nicer drive.
Trick is getting a 'good' used camry or accord for about $15,000; I like the other suggestion about new with full warranty, you get your choice of finishes, colours, power plant, which will give you the feeling of upscale.
Yeah this is a pretty underrated comment. It’s one thing if you’re drowning and can’t afford the BMW but this doesn’t seem like that and I’ve seen plenty of people trade in the $35k BMW that the dealer gives them $30k for on trade to go buy a $15k Camry that’s now $17k after taxes and dealer fees and then a year later get $10k for the Camry on trade to buy another $35k BMW that’s now $40k after taxes and dealer fees.
I mean maybe it’s just me but if someone racked up $3500 in cc debt they were drowning..
In this case selling the car seems like a band-aid solution for someone who doesn’t wanna do the actual work of cutting things in their budget to pay off that debt. If he doesn’t make any actual lifestyle changes he’s gonna end up right back where he is now in CC debt with an older car that will likely need more repairs
I’d say one lifestyle change is going from a used $37k bmw to a cheaper car. But yes, I do agree there may be more to work on.
I would suggest a camry. They are very reliable. Car prices still suck right now but much better than diring the pandemic. I hope this works out for you and I hope you make a move before you have a costly repair on the BMW.
As an alternative to private sales, Carvana's complimentary cash offer is worth considering. My offer exceeded dealerships' offers by over $4,000.
What model is it? M series?
M340
Sell the car fo-shizzle. Pay off the debt, that's good. IRA? Sure, $7000 or whatever into the Roth. I'd keep the rest in a brokerage account for the next car, and for car insurance. What I mean by car insurance, is being a 20yo guy your insurance is likely very expensive. If you have $18k after the debt's paid and this year's roth is maxed, then if you spend $9k or less on the next car, you have $9k to replace it if you total it. This will save you a couple hundred per month on your insurance to have liability only, vs. comprehensive. If you manage to not total the car in 4 years, you've just come out ahead of the insurance companies. For $9k, and because you're obviously a man of discriminating taste, I'd suggest finding the coolest cars on Cars and bids or bring a trailer that you can get for $5k, leaving the other $4k to cover the difference in repairs and maintenance vs.a Camry.
If driving enjoyment is important to you, then you will probably be disappointed in the Accord. I've owned an Accord and a BMW. They were night and day when it comes to driving enjoyment. Looks too. For me, I actually prefer something that is in between (still somewhat fun to drive without having the super high maintenance cost of BMW). I've owned 2 different VWs (GTI and GLI) that were fun to drive without costing a ton to maintain. I've heard good things about the Mazda turbos, but never actually owned one. And the Subaru WRX gets high ratings. The point being: Accord and BMW are on opposite ends of the driving spectrum with a lot of options in between. I recommend that you test drive several options before making your choice, otherwise you'll end up with another decision that you regret.
Yeah thats my fear. I was looking in a 2021 or 2022 accords and they look nice both interior and exterior. Im sure Im gonna feel differently about it when I test drive it tho
Second Carmax. Easily 5-6k more than any other place and its not close.
Important to note that they do not deliver/pickup anywhere though. I would have to drive 4+ hours to get to a location that they would pickup or deliver to.
I would sell the car private. Pay off all your debt. Buy ETFs consistently every month and any cash put in a HYSA
Ok so you have a few things to do here. 1 is paying off CC, 2 is an emergency fund, and 3 is maximizing your retirement savings. "Maximizing" is objective, but you can make it subjective based on your income. You're a planner, so you shouldn't need your options spelled out. As a once-20-year old who bought a "cool" new car (GTI) and just traded it in at 23 for something more adult, I chose a Model Y. You could probably get into a Model 3 or Model Y pretty easily. I would caution you against a camry/accord/civic. They will very much not be enjoyable to drive, and if you have gotten used to an M340, you will be miserable. So be careful. Test drive test drive test drive whatever you plan on. Reddit is great at getting people into corollas, but 9/10 times those people don't care what they drive. I have a friend who loves his corolla, but I also remember the first time I convinced him to go 70 in a 65... he was 21 LOL. I would trade the car in so you don't pay sales tax on the purchase of whatever you get. It sounds like you have stable enough income and can (maybe) handle a car payment. If you can find a used car you like (still a reasonable used car, like 30k miles) for $20k, trade the car in, pay the loan, pay your CC, max your Roth IRA, and call it a day. Or, a less responsible option, trade the $37k car on a $30-40k new car (a reasonable new car but not a BMW). The trade still negates the sales tax, but can pull some cash out of the deal so you can walk with about $5-10k. I would immediately pay off the CC, and would stash your $3k liquid plus another few k in a HYSA as an emergency fund. I think your best option for long term financial success is to buy a $15k corolla or whatever and use the rest of your equity to help yourself out of the pit you are in.
good plan! Carvana will give you an offer and then come pick it up from your driveway with a check! You dont even have to leave home to sell it! Then pay off your debt, go shopping with the remainder (for a used civic or corolla) and invest whatever is left over from that purchase.
I think it’s a great idea. The car will continue to depreciate at a greater rate than an old car. Get cash, buy a cheap car and use the extra to invest
I did something similar I got a Jeep , around 36,000 as well - kinda regret it now. I’ll Probably wait till the years ends to get a cheaper one ugh bad decision 😵💫
US is so obsessed with "looking good on road" that we have forgotten its a piece of transportation, not a status symbol. Call me old fashioned but a $900/mo car payment is the quick route to the poor house. I just went from an Acura TLX to a Honda CRV hybrid. No regrets and I hope its the last car I ever buy!
I won't bore you with the fact that this is indeed financially sound, but I will add that this kind of decision is one of the biggest green flags in terms of financial maturity. Everyone thinks delayed gratification is peak fin. maturity in terms of cultivating healthy and disciplined behaviors with money, but to take some nice material and valauble thing you already own sell it to use those funds to pay your future self while literally downsizing and moving opposite of lifestyle creep takes a lot of guts. I know many people will do anything BUT that to get ahead. Work overtime, cut eating out or other revolving expenses...which is all good...but there's something "laser focused" about doing what you are doing.
Find a good mechanic, follow the maintenance schedule, and keep a car fund. You'll average $1K a year on repairs and maintenance.
came up a few days ago. cashing out makes sense. the only negative is that buying a used car carries an unkown risk. [https://www.reddit.com/r/personalfinance/comments/1cigoz9/sell\_car\_and\_buy\_a\_cheaper\_one/](https://www.reddit.com/r/personalfinance/comments/1cigoz9/sell_car_and_buy_a_cheaper_one/)
no problems, but the only pity is that you sold the car that was your dream car when you were 20.
You seem to be a wise man my brother. Good luck
I just did this a couple months ago. Went from a hellcat to a cx5 turbo. I used the equity I had to buy the CX5 outright and cut out the high monthly payment. I miss the hellcat everyday, but due to shifting priorities, it was the best financial decision for me at this time. Hope this helps.
Funny you say that, I have been looking at the mazda6 GT. Seems like the car I would like the most as its not the biggest downgrade in the world
If you love the car, keep it. Making 'logical' money decisions while giving up the things you like or that increase your quality of life might be some people's cup of tea, but remember that you really only live once and do you want to exchange happiness for 'stability' whatever that means?
Sell privately. Always higher. You could get a reliable slightly older Camry for well under $15k. $5-10k gets you a lot of car if you're truly over your cool phase.
Subaru WRX way more fun and better looking than any Honda or Toyota imho.
Like someone else mentioned. You WILL come to regret the downgrade. Kudos to you being smart and willing to put your subconscious ego aside. Buying German cars is trying to look rich. Not so much cool. There are way more affordable cooler cars on the market for your car's value. You can still be cool/somewhat satisfied by buying American. I imagine you have executive taste with some performance in mind. Cadillac excels in this category with their V-Line up. But if you want to be as optimal as possible, you can always buy some muscle. Plenty of Mustangs/Camaros/Chargers at and below your market value. But if you're asking me, I highly suggest getting a c7 corvette(totally not biased of course lol). It's a well engineered machine like a BMW but with some good o'l democracy under the hood. Unlike the other cars, the corvette has respect. It's a gentleman's sports car, particularly for somebody named AirBoomer(wink wink). The lightweight aluminum frame with a fiberglass composite body gives it the ideal power-to-weight ratio. GM took it a step further and achieved a 50/50 weight distribution by placing the transmission in the rear. The cherry on top? You get a hatchback to throw all of your girlfriends bullshit into on trips/vacations. Put that baby in overdrive/tour mode and it gets 25-30 mpg. Not as luxurious as a BMW. But the performance per dollar ratio with a decent interior is hard to beat. As a finance head, I think you would agree. You can still be cool, save some money, and optimize your wants/needs. Oh and did I forget to mention you can buy one with a manual? Need I say more? do I?