So I don’t use my car anymore. I use my partners and catch the train to work.
I’ve got someone interested In my car but the break cost from the loan is about $1200.
With rego and insurance coming up I guess the damage won’t be as much but am I making a sound financial choice?
3 years left on the loan. Payout figure 12400, selling $11200
Try listing it for a bit more than the person interested. Is it listed already and that is the offered price? If you don't use it, better off selling it than keeping it since it will get cheaper and cheaper to buy, day by day. Also, you have to pay for service, less garage space and it's also bad for the car itself to not use it once a week
whats the car ?
$80,000 high yield investment car
it was, now it's a $65k high yield investment car with a $100k loan.
Have you talked it over with all your girlfriends? From the sounds of it they'll probably recommend ditching the car, but try and recoup more money. Or see if you can reduce the discharge fee with your loyalty.
I've sold a car at a "loss" (sell price less than the lease payout) and also bought a car from someone for a price less than their payout. Personally, I don't see it as an issue - cars depreciate at ~22%pa yet the principle on a loan will decline at a different rate - and will be slower at the beginning. Never forget - a car is NOT an asset. .ie it does not make money for you.
I think you're doing the right thing
cars depreciate at ~22%pa
Jees you buy the wrong cars
He clearly needs an A200 AMG!
yeah, real cars are high yield investments.
Payout figure 12400, selling $11200
Selling my car at a loss
Sorry, what was the question you're asking in this thread?
Yes if the value of your car is lower than the loan value, you're choices are sell it at a loss, or hold on to it.
You’ll need to pay that money off the loan as the person is buying it, otherwise they’ll be buying an encumbered vehicle
Have you tried not selling it at a loss?
If you're not using it then you're still paying the for the car plus it's depreciating in value- so you lose more by keeping it.
If you are going to use it (or might need it in the future) then keeping it is probably the way to go as you'll lose more by having to replace the car you sold.
Yes good way to hand in your ozbargain membership
If you are not using it then yeah i'd say sell. Cars are actually a massive rip off when you think of it in Victoria your looking at over 800pa on just registration.
Add in insurance which can be anywhere from a couple 100s to 1000s and at least an annual service ~180-250pa
If you are sure she wont use it in the short to medium term i'd say sell it..
If you never use it then yes selling it is the right choice.
That being said, there's no immediate rush so you can try your luck in selling it at break even price. If after trying for a bit you really can't break even, then sell it at a loss.
Guess it comes down to whether you're concerned you won't get another buyer, either at breakeven or loss price.
I worked out my car costs $2000 a year in fees and service. Fuel is extra. The sooner there is a loan car system the better. I heard there was this website where you could book a car for a certain timeslot. I might look into that in the future.
In Sydney there are share cars on most streets and if you're a member you can just jump in one and go, and then leave it wherever there's a special parking spot for such cars
In Melbourne, its like 35c per km on top of $30-40 per day. Normally the car is 5-10Kms away. If one of my neighbours was doing it I'd sell my car. Its the future.
Can you sell the car in a manner that the buyer takes over the existing car loan. You may then need to pay some admin and legal costs to the lender for the paperwork, but could avoid the breakup costs. It would only work if all ducks line up.
Yep sound decision, get rid of it.
I agree with others; sell the car and payout the loan/lease.
You will then no longer have the loan payments to make, maintenance, fuel, etc., and have more money in your pocket every pay day.
What happens if someone buys the car and the seller doesn't pay the loan?
The buyer becomes liable. That’s why you check if there is finance on the car before you buy it.
so how do you ensure the seller pays off the loan with the money?
the seller should pay off the money before they do the transfer of ownership.
It's not so much the buyer becoming liable, but that if the loan is defaulted the car will be repossessed by the loan company. If there is money outstanding after the vehicle is reposessed and sold, then the company can't go after the buyer (who is without a car or cash), only the original person that took out the loan.
This is the accurate description of the extent of liability on a financed car.
Lesson: never buy a car thats under finance unless you enjoy headaches.
Pretty sure you can approach the company that the car is encumbered under and pay them directly with the sellers help though, if you are worried that the seller is going to do a dodgy.
I've done it 3 times where the lease is > purchase price.
Ask the seller to pay the shortfall, get a pay out figure and then pay the finance company directly
Not that big a hassle.
I agree with you, it isn't a hassle if the seller is honest, and can pay the shortfall.
I've heard from friends of their experiences where the seller didn't have the cash to make up the difference, but would try to go through with the sale and drag it out for ages. Eventually my friend pulled out of the deal because the seller kept dragging their feet.
Its just an extra hassle you don't need when buying a car, my implied advice was to buy one not under finance.
Yeah, it's not for everyone, but it can work out well for buyer/seller so a win/win.
If you want a stress/hassle free purchase, then you have to pay the premium from a dealer.
To the OP, if you don't need the car, it's cheaper to sell now than later.
How is that possible? Did you finance a shortfall, or is a 7yr loan?