Alternatives to selling my car

19 posts in this topic

Hi all,

 

I need some advice. A couple of years ago, I wanted to buy a car. Instead of sticking with my budget, I let myself get talked into getting a way better more expensive car taking on significant debt. The price was 33k but since it was a car loan I would owe the bank about 35k. Then about a year later, I needed some money and hence made another mistake of getting talked into doing an Umschuldung for 40k. So out of the 40k some 33-35k odd went to closing my car loan(so the car became mine and I have to then pay back a personal loan rather than a car loan), the rest about 5-7k went to my bank account. When I bought the car I had told myself it doesn't matter that it is this expensive because I will drive this car for the next 15 odd years or more till it won't run any more.

Fast forward to now, I had some good stuff happen at work and will finally be given a company lease. I was thrilled that this would mean some savings because I would no longer be paying for gas, insurance, repairs, winter tyres and the odd unlucky stone cracking the windshield. Obviously I would now like to sell the car. I looked at similar cars being offered privately and decided 24-25k is a fair price for it. I also got some offers from a few of those Ankauf dealers etc., understandably for a much lower price. (18k up to the best offer being 20k)

When I put the numbers together I am screwed either way.

Scenario 1:

I wait for a private buyer to come along even though this might take many weeks/months during which I am paying for a car that's sitting in my garage. If I still ultimately get the price I want (say 24k), I am still looking at around 12k of debt that I will probably take 4 years to get out of.

Scenario 2:

I cave and take the 20k from the Ankauf dealers. Similar situation but more debt. The only upside being, the car is off my hands and I can close the current debt quickly, do another Umschuldung at a lower interest rate and hope to save some money overall.

 

What do you guys think I should do to come out of debt in the best possible way?

Is there an other alternative like rent it out to a company? I don't even know if this is a thing. I googled it and found something about car sharing.

 

Any other advice is welcome too.

 

In the off chance that someone here is interested in knowing more about the car, I can provide links to my Ad on the usual sites. If it is allowed to advertise it here of course.

 

Many thanks!

 

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Can you speak with your company and ask them for a cash equivalent rather than the car? 

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Have you gotten it valued at wirkaufendeinauto.de?  I know an old lady who wanted to sell her car.  Autoscout suggested we could list it for 13,400 but when we did, it was listed as "teuer".  We lowered it to 12,900 and it was still somewhat "teuer".  A couple of weeks later, we lowered it to 11,900.  A couple of weeks later, still no interest.  She had gone to a dealership and was told 9,000.  Wir kaufen dein auto offered her 10.  She took it.

 

So I would leave it listed for a few weeks, lower it a bit, see if you get some interest.  Once you get tired of waiting, get a few offers from dealers and wir kaufen dein auto and get rid of it.  Lets face it, the value is not going up the longer you wait.

 

 

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Unfortunately a bit late for that. I signed the lease agreement. The car has been ordered. My company will have to pay a penalty and my boss won't like it. Also, if they offer me a cash alternative, it will be way less due to higher taxes.

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14 minutes ago, LeonG said:

Have you gotten it valued at wirkaufendeinauto.de

Yes, I did. That would be the scenario 2. WKDA offered around 18, mobile de 19k and the best was some smaller dealer around 20k (which he set a deadline for).

I have a friend that works for WKDA but in the IT or Marketing or something else. He said this is going to take more than a couple of days and I should not keep lowering the price and that I should just wait. But his dad just died so I don't feel right contacting him for anything right now.

 

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The max difference between scenario 1 and 2 is 4k, so that is the maximum benefit of waiting (hoping) for an offer you like. So:

 

- How long can you afford to wait, knowing that costs of upkeep and depreciation will continue? Additionally the hassle of answering interested parties, showing them the car etc. 

- How realistic is your expectation to receive 24k for the car you have driven for “a couple of years”? To me it seems like 20k may be a very reasonable offer...

 

You realize that you may have to pay some taxes on your company car too, right?

 

PS, never budge on budget when talking with car salesmen, but I guess you know that now...

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3 hours ago, generalmartok said:

I wait for a private buyer to come along even though this might take many weeks/months during which I am paying for a car that's sitting in my garage.

 

Do you have another garage for your company car?

 

Car dealing is a business and you have to leave some meat on the bone for the dealers to resell. 

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@generalmartok it sounds like depreciation has bitten you in the butt, you're underwater on the loan and seems nigh impossible to avoid a "hard" loss if you sell, even at the best possible price :( 

 

that's pretty well clear based on discussion so far.  so if it were me, I'd be asking myself "maybe it makes sense to hold onto the car?", "how much does it cost me, out of pocket, to keep the car?" (eg parking costs, insurance costs if you drop it down to the lowest use case possible, annual taxes, etc) and "is it even remotely possible that I will NEED the car in the next x-timeframe?" (job security? job satisfaction? can they reneg on the car for any reason?, etc)

 

then just bounce those results against the alternative of selling the car with the "loss" on the outstanding loan. 

 

I myself would probably keep it *IFF* I had a garage space for it.  That's basically what I'm doing with my car now - just sitting on it.  I could sell it but it's worth more to me to simply keep it, as if something arises wrt work or who knows? I don't need to go buy another one.  But I have parking included with my apartment, so no loss there.  ergo it's pretty cheap for me to keep it.

 

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oh!  I meant to also ask/add;  what are the tax or out of pocket costs of using the company car for personal business (meaning on weekends, etc)? 

 

how much would you save there, and would it (somewhat) offset cost of keeping your own car?

 

I have no idea but it could be pertinent

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Like you said, that car is costing you, even when it's sitting around.  It's a compromise, the longer you own it, the more of a hit in depreciation and ownership costs you'll take, but on the other hand the more desperate you are, the lower the price you'll get.  Jump on the first reasonable offer and be done with it.  Learn from your mistake, pay down your debt as fast as you can, and don't get yourself into that position again. 

 

Why would it take you four years to pay down 12k in debt?  That's only 3k a year, are you earning minimum wage or something?  I have a very modest income, probably much less than yours if you have a company car, and could knock that shit down in a year or less.  Get hardcore and get out of debt.  So long as you have consumer debt on stupid shit like cars, (furniture, cell phones, eating out...) you have negative net worth (unless offset by other assets), which is a crappy position to be in.  Understand that regardless of your income, if you have negative net worth, you are POOR!  That means: no private car, no vacations, no eating out, no club nights, no Netflix or TV, no clothing purchases beyond the absolute necessities, nothing not absolutely necessary, until you have the resources to pay for them out of pocket and not worry about having enough to pay the bills.

 

You can do this, good luck!

 

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Thank you everyone for your responses. I will try to answer all the questions.

 

18 hours ago, Dubya said:

- How long can you afford to wait, knowing that costs of upkeep and depreciation will continue? Additionally the hassle of answering interested parties, showing them the car etc. 

- How realistic is your expectation to receive 24k for the car you have driven for “a couple of years”? To me it seems like 20k may be a very reasonable offer...

Yes, it is a lot of work, but I cannot get my head around giving up those 2-4k to avoid some extra hassle. The 20k offer is subject to further inspection of the car and possibly more haggling. But at this point I might take that offer. I have until the 5th to decide, which again seems to be a bargaining tactic from the dealer.

18 hours ago, Dubya said:

You realize that you may have to pay some taxes on your company car too, right?

Yes, I do but that is all that I have to pay for the company car. And the occasional Scheibenwischer liquid and such.

 

18 hours ago, fraufruit said:

Do you have another garage for your company car?

I am paying 30 bucks a month for a spot in the parking lot. The car I am trying to sell will stay in the garage in my building.

 

@lisa13 I tried to run these numbers in my head this way: If 500 euros is near the actual monthly cost of owning/using the car and this includes insurance road tax fuel and repairs (it might have even been slightly higher), then after 18 months I am at 9000 euros. If the car was worth 32k when I bought it, selling at 20k gives me a difference of 12k. Subtract the 9k and I end up with 3k which is the actual loss I am looking at.

Now bring in the company car which due to the 1% taxation rule will cost me say 200 euros less net pay a month, still saving 300 compared to before. So in 10 months, I have already made back this loss. So I guess it is less awful than I imagined.

16 hours ago, lisa13 said:

what are the tax or out of pocket costs of using the company car for personal business (meaning on weekends, etc)? 

Since I live close to work, the company car will pretty much only be for private use. Hence the 1% taxation rule will come into play.

58 minutes ago, kapokanadensis said:

Why would it take you four years to pay down 12k in debt?

You are so right. I can kick this sooner if I make some real changes.

 

You guys have a fantastic weekend!

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Well, with that kind of positivity you will sort it fine. Good to see.

 

Onwards and upwards as we Brits say.

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53 minutes ago, generalmartok said:

Yes, it is a lot of work, but I cannot get my head around giving up those 2-4k to avoid some extra hassle

 

It's less than that, figure in additional losses to depreciation, taxes, insurance and other costs that you have to continue paying. 

 

53 minutes ago, generalmartok said:

If the car was worth 32k when I bought it, selling at 20k gives me a difference of 12k. Subtract the 9k and I end up with 3k which is the actual loss I am looking at.

 

It's much more than that.  The running costs on a bigger car are more expensive than those of a smaller car - that difference is a loss.  The interest and fees that you have been paying on the loan is a loss.  The depreciation of the new vehicle is entirely your loss.  The lost interest on other potential uses of that money is an opportunity cost, and therefore also a loss.  Had you bought a used car, the depreciation would be significantly lower.  Had you bought a transit pass and a bike instead of a car, even more so.  These are more useful comparisons, and can help you get a better picture of your situation.  New cars are a tremendously good way to make lots of your money quickly evaporate.  You are out thousands and thousands of Euros.

 

500 € a month for a car is REALLY expensive!  That's 6000 a year out of your after tax income!  Useful is to calculate a per kilometer cost to a car - my big diesel truck that I own outright costs me 45 cents a kilometer, only 15 cents is fuel - adds up real quick.  A new car that you're still paying for is much more expensive per km.  Looking at it this way helps me decide whether to drive or to take transit or the bike.  Train tickets are super cheap when compared on a per km basis, and bikes nearly free. 

 

But, don't worry about it, it's in the past!  Make some changes and dig yourself out, no biggie!  Just don't fool yourself into thinking it's just a couple of thousand Euros, that kind of thinking allows you to slip back into the same behaviour in the future.

 

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2 hours ago, generalmartok said:

Yes, it is a lot of work, but I cannot get my head around giving up those 2-4k to avoid some extra hassle. The 20k offer is subject to further inspection of the car and possibly more haggling. But at this point I might take that offer. I have until the 5th to decide, which again seems to be a bargaining tactic from the dealer.

 

When a dealer sells a car he has to pay sale taxes and he would try to make a profit.  So even assuming he makes no profit, you end up losing the tax part if you compare it to the "market price".

 

2 hours ago, generalmartok said:

I tried to run these numbers in my head this way: If 500 euros is near the actual monthly cost of owning/using the car and this includes insurance road tax fuel and repairs (it might have even been slightly higher), then after 18 months I am at 9000 euros. If the car was worth 32k when I bought it, selling at 20k gives me a difference of 12k. Subtract the 9k and I end up with 3k which is the actual loss I am looking at.

 

Again pretty silly and simplistic way to see things.   You will always lose the taxes if you resell a car to a dealer.

 

If you want to know a realistic price to sell if to a dealer then take the realistic market price, reduce the sale taxes and reduce what you think the dealer wants to profit, which in this case can be anything from 2k to 5k.   Notice a private seller price is not a realistic price to take as a base when you want to sell it to a dealer because private sales do not pay sale taxes.

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2 hours ago, generalmartok said:

Since I live close to work, the company car will pretty much only be for private use

 

You might consider not having a car at all if this is the case, company car included.  It would be parked at least 99% of the time, it's difficult to justify any major cost outlay for that amount of (dis)usage. 

 

Check out www.mrmoneymustache.com, you might find some useful tips there on how to rearrange your financial situation and tackle your debt.  It's all about money, but also a lot of it is about acknowledging your irrational mammal behaviour and tempering it in order to live a more fulfillled life.   It's fun reading.

 

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On 2/1/2019, 1:14:22, Krieg said:

Again pretty silly and simplistic way to see things.

I agree. But because I am in this situation with a sizeable debt and a car that is losing value everyday that it sits in my garage, I cannot afford to wait till someone offers me the best possible price.

 

Anyway, an update : I went with autoscout24. They put my ad on their dealers network and I got a couple of bids. I went with a dealer offering 20550 eur. I think this is the best option for me.

 

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I just saw something on breakfast TV about air-bnb of sorts but for cars.  If you have a car sitting around and costing you money, you can rent it out privately through apps such as Drivy, Getaway or Snappcar.  This is maybe not an option for you anymore as I assume you've sold it now but it could be for somebody else reading this thread in the future.

 

However, I suppose things could go very wrong with this.  The person totals your car, steals it, who knows.  I do not know how the apps would handle that kind of thing but checking out Drivy, they seem to have insurance.  The other question though would be wear and tear.  You don't want just everybody driving your car.  A friend has a pizza delivery service and it's amazing how fast a car in decent shape turns to a lemon after being driven by different people who don't care about it because it's not theirs.

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