Thinking about selling my truck

So I feel it would be in my best financial interest to sell my truck right now. It is a 2012 SR5 4x4 DCLB model with 65k miles and counting. The mods include Level 8 rims, ADS reservoir shocks all around, and ICON AAL. Various little things like wet okole, BAMF sliders, hood lights/bed lights, bed mat, blue sea system.

Given the high mileage it kbb's for around 25k. With everything I assume I could get around 28k in San Diego. (Either way I part it out or sell it locally) If I look at it in a leasing stand point I would have lost roughly 10k over 3 years. So 3,300 a year to lease roughly, not too bad.

I owe 18k, I can make payments easily because I have a good paying job but I am not happy with how much insurance I pay(I am looking into other options) and overall the value of the truck is really depreciating faster than I would like because I am driving it so much. I expected to own this truck forever. I am looking for a new job in another state that will pay better however I think selling the truck and using the equity I have to buy a vehicle outright and use any money I have to get out of debt is a better idea.

Does this sound like a good idea or screw it and YOLO. Haha. I love the truck there are just a few things I would like to have done in the beginning that I didn't do and now kinda bugs me. And I feel I need to become more financially responsible due to other factors.

 

Are you leasing with an option to buy?

 

No I purchased the truck and have a loan.

 

Folks tend to overestimate how much they can sell a car for. You really think you could get 28k given that it's already got 65k miles?

Remember, when you're looking at ads on craigslist and such, your comparisons are private party sales, not dealer sales. Dealers always ask more because they can offer financing to the buyer, and to give themselves room to negotiate.

If you put a lot of miles on, a Tacoma's a better vehicle than many. Folks tend to expect to get 300k miles out of them.

I assume you need solid basic transportation. So any difference between what you sell this for and what you owe will be used up in buying a basic reliable economical used car.

I'm guessing your high insurance rates are driven by your demographic group and driving history rather than the kind of truck you're driving. It's not like it's a corvette or something. I question how much you'd really save there.

Basically, what I'm suggesting is hang on to your truck and double down on living economically (stop buying tacoma mods! ) and focus on paying down your debts.

Some financial planners will suggest focusing on paying down the highest interest rate loans first, because they're the most damaging/expensive. Certainly that's true if you're holding any "payday" type loans. Those things are legalized loan sharking.

But the approach that seems to work for most folks assuming that the loans are all relatively around the same interest rate is: pay down the smallest one first. That'll free up one payment, so you can start "snowballing" into paying a little more per month on the next largest outstanding one, and so on.

I'm taking your statement that "I can make payments easily because I have a good paying job" at face value. But I suggest you take an honest and critical look at that statement. If your truck payment is such that it's actually holding you "underwater" and you're not able to make all your payments every month without having to take on new debt for stuff you truly need (like your dentist visit, or shoes that don't have holes in them, etc...) - then my advice changes: dump the truck so you're cash flow positive, and then focus on paying down debts.

 

If you still owe 18K, how much would you walk away with? It doesn't sound like enough to buy something outright that would be close to the reliability of the Taco.

 

The 28k value I used was in relation to selling my mods outright and then selling the vehicle. So I roughly could sell the mods for 3k and the truck for 25k. I fully realize the value and believe it is a level headed guess. There are not many 4x4 trucks in SD. A similar one without mods sold for 27k with slightly less miles. So the 25k for the base truck is a decent private party value I believe. I was going to setup a quote from carmax to see what they would offer to get an idea of the trade in value.

I really put that many miles on the first year. Something like 30k and now I have moved 4 miles from work. I do drive on the weekends a lot, somewhere like 250 miles. Although like I said I am looking to move.

The truck is my highest interest rate at 1.9%. I also refied the truck for another 5 years for 300 a month payments. Which maybe I shouldn't have done. I recently moved all my cc debt to 0% through transfers etc and only accrued the balance transfer fee. I have about 2k of free money a month after all rent, payments etc are made, which of course I leave about only 400 to myself for the month and the rest goes to debt. My truck payment is not "Holding me underwater" myself however I am thinking more in a immediate family sense. I pretty much make the most out of my family and some are struggling.

That and me wanting to change jobs due to not moving up the way I want is my thinking to at least closer to debt free if I sell the truck

 

Yes I already looked into insurance and one is 600 less than my current plan.

Also I did plan to keep it forever, though things change and now am thinking now will be the time I could get the most back vs mileage of my vehicle or wait until it the depreciation value drops slower vs year? Does that make sense?

 

From my perspective a loan on a vehicle or house is not a problem as long as you owe less than it is worth and you can easily afford at least the monthly payment.

I'd focus on getting rid of the credit card debt. 0% or not, in a bad situation you can't immediately get rid of it like you could the truck loan by selling it.

 

If I read this right, you've got an extra 1600 per month that you're using to pay down debt.

If that's the case, you could easily have the 18,000 balance on the Tacoma paid off in less than a year. Then you own a nice reliable 2012 in the free and clear.

 

Or in a financial sense should I lower my 401k payments and put more to debt payoff? I put in 1k to my 401k every month. This is mostly due to trying to keep my AGI below the next tax bracket. I actually planned to max out the 17.5k this year.

 

Correct. But do I pay that down first or cc debt?

Oh and thanks for all the advice.

Maybe I should just keep the truck and ban myself from this website haha.

 

This is what I am doing although I fear soon the truck loan will meet the value of the truck soon. Since my payments are low.

 

Still better than the credit card debt that you (probably) have nothing to show for and no way to immediately eliminate.

 

Odds are your replacement used car would depreciate faster than the Tacoma.

 

IMO stay the course, keep the truck, pay it off and continue to move forward. Do not over think it. The grass may not be greener. If you are not 100% sure.....don't. Where are you going to buy a good vehicle for $18k? You have one. Onward and upward. FWIW, my truck has 121,000k and I owe $2,180.

 

Forget about the truck, don't move from San Diego!

Your truck will seem o!d to others but has many more miles to go. I saybstaybthe course and keep her until she dies.

 

I see what you're trying to do. You're thinking of selling so as to minimize your passive loss expense due to depreciation.

Here's the thing: unless you drive absolute junkers, auto depreciation is *always* going to figure as an expense on your personal "profit and loss" statement.

With a new car - the worst hit is the minute you take it off the lot.

Then the first year you have it.

Then the second year you have it.

And so on.

To avoid that - from a financial perspective, the least expensive way to own a vehicle is to buy clunkers for minimum up front, barely keep them running, and drive them until they die.

But most folks are willing to pay a little more than the minimum however, so as to have a little nicer car and more importantly - more reliable basic transportation. "I can't make it to work today boss, my car broke down." only plays so long before you're out on the street looking for a new job.

So from that perspective, the best way to go is to buy a basic model brand new off the lot (not the frilled out version) and pay cash for it and then keep it for ten years or more until it's nearly used up. At that point - it becomes someone else's clunker.

Every time you buy and sell, there's a monetary "friction" loss from deferred maintenance (you lose the residual value of maintenance you've performed that hasn't run out) and the maintenance expenses you have to put into a new unknown vehicle, title transfer costs, auto sales tax, the portion of annual registration that you've paid for but not used yet, etc...
That money doesn't buy you anything. It's just transactional costs. "Churn" expense. From a pure financial perspective - it's best to minimize this.

 

Your best bet ^^

Ignore this site, move on with life and focus on where you want to be down the road. In the end having a cool truck gets you nothing.

 

Sounds like you need to talk to a financial planner. Sounds like you make enough money to do something with you just need to find out what makes the most sense to you. I think you can work it all out and keep the truck. Your talking about lowering your retirement which I believe is a bad idea just to pay debt off. If you are able to make your payments I don't see a reason to do that. Talk to someone that knows personal budgets.

 

I love San Diego! Although the best career options I think are forcing me to move to Seattle.