I Knew This Would Happen

A few months ago (has it been half a year already?) I bought a new car.  Paid around $14k.  Since getting it, I’ve saved about $1000 in reduced monthly payments and fuel consumption.  With fuel prices skyrocketing and no end in sight, demand for high-efficiency vehicles like mine has gone way up.  Used Priuses are selling for more than new ones.  Car companies are taking major hits on sales (except Honda, which, not surpsingly, saw a huge spike in Q2).  And, as I expected, AutoTrader is filling up with low-mileage high-MPG cars.  And they’re selling at a premium:

$19985:  2008 Honda Fit with 3200 miles (about $4000 over MSRP)
$18995:  2007 Toyota Yaris with 12000 miles (about $3000 over MSRP)
$17995:  2007 Honda Fit with 8000 miles (about $2000 over MSRP)

I’m seriously thinking of selling mine for a $2k markup and buying something at auction for $2k cash.  I only drive 14 miles to work — soon to be 5 — so the prospect of puttering around in a ’98 Intrepid isn’t exactly awful.  Especially when it frees up a few hundred bucks to put into killing those student loans a few years early.

According the the aggregation of KBB, Edmunds, and NADA, my car is worth about $15900 in private sale.  And that’s using the 2007 model, because neither Edmunds nor NADA have figures for 2008 on my car yet.  That’s also not taking market demand into account.  Interesting.

2 thoughts on “I Knew This Would Happen”

  1. This is almost like real estate in 2006: far too good to be true [for the seller], unrealistic and a knee-jerk reaction to the market. If you’re thinking about selling your ride and getting a beater, now is definitely the time. But…I would bank on the fact that your car will probably hold its value much better than other cars thanks to the high MPG ratings from here on out. So…you already have the car and worked hard to get it, you like it, it was yours from day one AND you have a warranty (a big one there) so I would just keep it. Yes paying your bills off early would be very nice but nothing beats piece of mind…getting in your car and always knowing it will start is a wonderful, wonderful thing.

  2. Yeah, that’s true; reliability is important. I’ll set the bar at 20k. If the value continues climbing and I am given the opportunity to sell (not trade) my car at a 33% markup AFTER adjusting for mileage, I’m out. A $5k bonus + what I have in savings would wipe out my student loans, which — combined with the car finance ending — would open up $755 in my monthly budget. And if it never gets to that value, then my worst-case scenario is I still have a new, high-value, 40-mpg car and my loans are paid off in 4.5 more years.

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