Like millions of families, my husband and I have always had two cars. Even when I transitioned to working from home full-time, I clung to my own car.
But when we got serious about our finances and paying down debt, I just couldn’t justify keeping a second car any longer.
Find out why I decided to sell my car, how much money I’ll save, and how I overcome the challenges of having just one car when life acts up.
Americans and cars
My family isn’t the only one to have multiple vehicles. According to a study by Experian Automotive, the average American household has 2.28 cars. A staggering 35 percent of homes have three cars or more — often, that’s more cars than there are licensed drivers in the household.
Those cars come at quite an expense. Even if you drive a small, entry-level vehicle, repairs, fuel, and insurance is expensive.
AAA estimates that it costs you $7,373 a year to own and maintain a small sedan. And that’s assuming only regular maintenance and doesn’t include major repairs or heavy commuting.
Deciding to sell my car
My little car was a 2012 Nissan Versa. Nothing fancy, just a basic little sedan with excellent fuel mileage. I paid cash for it, so we didn’t have a monthly payment. Because of this, I told myself for a long time that it made no sense to sell it.
But I realized I was driving it less and less, and my husband’s car is newer and just as fuel efficient. I decided to take a closer look at the numbers to see if it was financially wise to keep it or sell it.
I spent about $50 a month on gas and about $20 a month on tolls. My monthly insurance premium was about $90 a month. Plus, I set aside about $50 a month in a bank account to save for future car repairs and maintenance. Without those expenses, I would save $2,520 in a year.
While my car had been a tank, it was nearing the point where it probably needed some work. It definitely needed new tires right away — which would cost about $500 — and likely some other minor things. Without buying those tires, I could tuck that money back in my savings account.
By getting rid of my trusty Versa, I would hold on to $3,020 this year without even considering the money I would get for it.
I calculated how much I could save in interest if I used the money I would save by selling my car to pay extra towards my student loan debt. Over time, I would save thousands.
Selling the car
I ran the numbers on my car. It was in excellent mechanical condition but had some cosmetic flaws and, of course, needed tires.
I knew I could sell it for more if I sold it myself on Craigslist or Facebook, but that could take weeks or even months. In the meantime, I’d have to maintain and insure the car, sinking more money into it.
Instead, I decided to sell my car with AutoTrader’s instant cash offer system.
You import your car’s information, such as its make, model, mileage, and condition. AutoTrader makes you an offer which you can take to participating dealers. As long as the information you entered is accurate, the dealer will honor the cash offer.
I completed the AutoTrader form, printed the cash offer, and headed off to the dealer. Within 30 minutes, I walked away with a check for $4,200, which I thought was fair to sell it so easily and quickly.
How much we’ll save
With what I took home from the sale and my savings in maintenance, this is what I’ll save in one year:
That puts me within $150 of AAA’s estimate in what it costs to own and operate a small sedan, which makes sense since I drove fewer miles than most people.
For many people, $7,220 may not seem worth getting rid of a perfectly good car. But for us, that money is better spent paying down debt and investing. If we apply the monthly expenses to our debt snowball plan, we’ll cut down on interest and save more money over time.
Getting around without a vehicle
I expected that selling my car would be a real shock to my system, but it’s actually been a very smooth transition. One of the biggest positive changes I’ve noticed is a drop in my overall spending.
Because I now need to coordinate around my husband’s work schedule if I want the car, I can’t just go shopping on a whim. That means I don’t fritter away cash on cute things I forget ten minutes later.
I find when I do go shopping, I’m more deliberate since it took more planning and I don’t make as many impulse buys.
When I do need to go somewhere and my husband’s car isn’t available, Uber has been invaluable. While it can get pricey, I’ve only had to use the service once in awhile for emergency appointments, so it doesn’t cut significantly into my savings.
Making lifestyle changes
When you have student loans or credit card debt, making lifestyle changes can be difficult. But by freeing up more income, you can get out of debt faster and give yourself more freedom.
While the idea of going without a car was frightening to me at first, I’ve found it to be well worth the sacrifice.
For more ideas on how to free up money to make extra payments towards your debt, check out this article to make money on the side and boost your income.
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