I finally sold my car!
Apr. 30th, 2007 11:30 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
gizaEarlier tonight, I finally got to go through the process of selling my car to a local Saturn dealership. All things considered, the transaction went pretty smoothly. They gave me (what I perceived to be) a fair price based on blue book values, and there wasn't too much in the way of paperwork.
The main tasks that remain waiting for the bank to process the payoff check from Saturn, waiting for Saturn to then cut me a check for the difference (I made a nice little profit on the sale :-), and waiting on the bank to send me a note that the loan is paid off, so that I can get refunded on the unused part of my car's extended warranty.
Skip this next part if you understand how the various scams/tricks in auto financing work.
Overall, my financial situation with respect to my car has improved considerably. When I bought my first car (a 1999 Saturn SL-2) 8 years ago, it was originally a 2 year lease. At the end of the lease, I decided I wanted to keep the car, so the dealership proposed to me a 5 year loan to pay off the car. What I did not realize at the time is that paying back a loan over the course of 7 years means that the principal drops at a slower rate than the value of the car, so that you owe more than the car is worth. This is very bad if you want to trade in the car at any point before the loan is paid off. However, I did not know that at the time, and agreed to the terms of the loan.
Well, in mid-2002, I pinched a nerve in my left foot. Those of you who saw me at Anthrocon that year might recall that I was walking on a cane. The fact that my SL-2 was a manual transmission vehicle means that I had to constantly work the clutch with my bad foot. This prevented it from fully healing. After suffering with that pinched nerve for over a year, I went to trade in my car and get a vehicle with automatic transmission in late 2003. (a 2004 Saturn ION-2)
The problem when I went to do that trade-in is, as I described above, I owed more than the car was worth. About $3,000 worth. This is what is called being "upside down" in the car industry. Now, the sales guy at the Saturn dealership said, "we can work with you on that", meaning that the old loan would be paid off, with the remaining principal being added into the new loan. So the new loan I got for my new car involved paying off the remainder of the old car loan as well. (i.e., I went further into debt!)
But, I had a plan. The loan was for 60 months. I bought an extended warranty from Easy Care for 100,000 miles/6 years (72 months). This way, I figured that I could pay off the loan over 5 years, and in year number 6, I could save those monthly car payments into a big chunk of change by the end of the year. If I wanted to buy a new car when my warranty ran out, I'd have both the trade-in value of the car PLUS the money that I saved up into a giant-sized down payment for a new vehicle.
But then, something unexpected happened. I got a job working in the city and found myself barely using my car anymore. And when I did need a car, PhillyCarShare was handy. So, at the beginning of year #4 on the car loan, I realized that I really didn't need my car anymore. Now that it's sold, I have NO outstanding debt (student loans are all paid off) and extra money every month that I can save up for my next big purchase.
It's about time I bought a house.
P.S. You know those commercials for car dealerships on TV? The below commercial is what they really mean to say:
The main tasks that remain waiting for the bank to process the payoff check from Saturn, waiting for Saturn to then cut me a check for the difference (I made a nice little profit on the sale :-), and waiting on the bank to send me a note that the loan is paid off, so that I can get refunded on the unused part of my car's extended warranty.
Skip this next part if you understand how the various scams/tricks in auto financing work.
Overall, my financial situation with respect to my car has improved considerably. When I bought my first car (a 1999 Saturn SL-2) 8 years ago, it was originally a 2 year lease. At the end of the lease, I decided I wanted to keep the car, so the dealership proposed to me a 5 year loan to pay off the car. What I did not realize at the time is that paying back a loan over the course of 7 years means that the principal drops at a slower rate than the value of the car, so that you owe more than the car is worth. This is very bad if you want to trade in the car at any point before the loan is paid off. However, I did not know that at the time, and agreed to the terms of the loan.
Well, in mid-2002, I pinched a nerve in my left foot. Those of you who saw me at Anthrocon that year might recall that I was walking on a cane. The fact that my SL-2 was a manual transmission vehicle means that I had to constantly work the clutch with my bad foot. This prevented it from fully healing. After suffering with that pinched nerve for over a year, I went to trade in my car and get a vehicle with automatic transmission in late 2003. (a 2004 Saturn ION-2)
The problem when I went to do that trade-in is, as I described above, I owed more than the car was worth. About $3,000 worth. This is what is called being "upside down" in the car industry. Now, the sales guy at the Saturn dealership said, "we can work with you on that", meaning that the old loan would be paid off, with the remaining principal being added into the new loan. So the new loan I got for my new car involved paying off the remainder of the old car loan as well. (i.e., I went further into debt!)
But, I had a plan. The loan was for 60 months. I bought an extended warranty from Easy Care for 100,000 miles/6 years (72 months). This way, I figured that I could pay off the loan over 5 years, and in year number 6, I could save those monthly car payments into a big chunk of change by the end of the year. If I wanted to buy a new car when my warranty ran out, I'd have both the trade-in value of the car PLUS the money that I saved up into a giant-sized down payment for a new vehicle.
But then, something unexpected happened. I got a job working in the city and found myself barely using my car anymore. And when I did need a car, PhillyCarShare was handy. So, at the beginning of year #4 on the car loan, I realized that I really didn't need my car anymore. Now that it's sold, I have NO outstanding debt (student loans are all paid off) and extra money every month that I can save up for my next big purchase.
It's about time I bought a house.
P.S. You know those commercials for car dealerships on TV? The below commercial is what they really mean to say: