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It’s time to celebrate. I sold my car!
Since April 2016, I’ve paid nearly $700/month to own a BMW X1. A car I just knew I needed after giving birth to my daughter seven months prior. It had a moon roof, navigation, and a premium package complete with technology I knew I would probably ever use. In my eyes, it was a perfect family car.
I drove this car to work daily and on many vacations. I loved this car, but last year, I started working towards becoming debt-free. I started by paying off more than $18,000 worth of credit card debt. My husband’s student loans were next to tackle in the snowball, but since they were currently in forbearance, we figured that it would be best to work towards getting rid of our highest month expense…my car. We would be able to reach financial independence that much faster if we used that $700 to work for us rather than against us
How much did my car cost us per month
- Monthly payment: $665.17
- Auto Insurance: $103.38
- Gas: $180
Between the monthly car payment, insurance and gas, we were pushing $950/month. This is insane. Who in their right mind would spend almost $1000/month on a car? Ridiculous!
That amount doesn’t even factor in the annual registration cost or maintenance. Thankfully, it was under warranty up until 50,000 miles, so we were able to keep our maintenance costs fairly low. We did have to add new tires last year and that was about $1,300.
I got a new car for free
Once my credit cards were paid off, we started saving $10,000 to purchase a new to us car to replace the BMW X1. In just five and a half months, we met our savings goal and planned to take the next few months to clear the negative equity so that we could sell the car back to the dealership.
The same month we reached our savings goal, my parents purchased a new them car and planned to get rid of a ’98 Honda Civic. I’ve been pretty open with them about my decision to sell my car, so I asked them if I could have it to drive for the next year until we pay off our debt. To my surprise, they said yes. Even though it’s a ’98, the car is in great shape and has just over 110,000 miles. It’ll last us to the end of our debt-free journey, which hopefully will be by the end of 2020.
The process to sell my car
- We walked into CarMax and in less than 30 min, they offered a quote of $17,000.
- BMW stated that they didn’t need a BMW X1 and referred us to CarMax.
- Carvana sent back an appraisal of $18,504.
I’m sure this goes without saying, but we went with Carvana. Their process is seamless and 95% of it is done online. I had to provide them with a picture of my ID, a picture of the odometer and a payoff from my lienholder for them to make an offer. The appraisal is done practically instantly and they give you 7 days to accept.
Since I had negative equity to pay, that amount had to be cleared to schedule an appointment to finalize the transaction. They gave me the option of either paying the difference directly to my lienholder or getting a cashier’s check made out to them. I chose to pay my lienholder directly. I uploaded the new payoff and scheduled an appointment to meet with a member of their team for the final tradeoff. I had to sign a few papers and received a check of $1.09 to account for the overage. In less than 10 minutes, I walked away from over $18,000 worth of debt. I felt so relieved.
No regrets from selling my car
Selling my car was bittersweet, but I don’t regret the decision at all. My word of the year for 2019 is contentment. Practicing contentment helped me to realize that life is much more than material possessions. Moreover, when I purchased the car, I cared a lot about status symbols and I wanted to appear rich. Now that I have a better understanding of financial freedom, I know that appearing rich doesn’t make you rich. I’d rather have $30,000 in my bank account rather than drive a $30,000 car that depreciates daily.
If I had to do it all over again, I wouldn’t have changed a thing. We can add back over $900 to our monthly budget. Getting rid of that car was the best decision we’ve made so far on our journey.
Would you sell your car to become debt-free?