What would you do with this car?

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ERguy101
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Joined: Sat Jul 04, 2015 11:09 am

What would you do with this car?

Post by ERguy101 » Sun Feb 04, 2018 8:17 am

Hi there, I'm looking for some advice. About 18-20 months ago I made a bad decision and bought an expensive vehicle (my dream car). I ended up not loving the vehicle.

Info:
Out the door price: $160,000
Amount owed on loan: $115,000
Estimated value: $89,000 - $92,000
Monthly payment: $2800

I'm guessing I'm around $20-$25,000 upside down in the car. Yes this is stupid, and it pisses me off. I know it's my fault. I can "afford" the vehicle, but every month it hurts me seeing that much money going out for a vehicle that I don't love. I'd rather a $600-$700 monthly payment and put that extra $2000 into savings.

So, what I'm trying to figure out, is what the best thing to do is. I want to lease going forward because it's so easy for deductions (I'm 1099 multiple contracts), and because I know I'm not happy with vehicles for long periods of time.

Should I just sell the vehicle (to like CarMax) and pony up the difference? It just hurts to give $25,000 just to "break even". But I rationalize it as if I then lease a vehicle for lets say $600, then that's $2200 less a month, and in one year thats $26,400 saved which more than covers the difference.

... The other thing on my mind, is if I paid down the car to only owing $89,000, I could refinance and then be at a much lower note.

What would you do?

Rifampin
Posts: 78
Joined: Sat Jan 16, 2016 10:13 am

Re: What would you do with this car?

Post by Rifampin » Sun Feb 04, 2018 8:37 am

First thing you must do is tell us what kind of car you bought. Then we can truly decide if you made a mistake.

ERguy101
Posts: 32
Joined: Sat Jul 04, 2015 11:09 am

Re: What would you do with this car?

Post by ERguy101 » Sun Feb 04, 2018 8:42 am

Mercedes G550 with all the stupid extra packages (tire wheel paint extended warranty, etc). I've already cancelled all the packages I can and the money from those were sent to the loan company to pay down the loan.

donfairplay
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Re: What would you do with this car?

Post by donfairplay » Sun Feb 04, 2018 8:45 am

Might get a better price selling it back to the Mercedes dealership because Carmax will give you wholesale prices (they'll just flip it at auction) whereas the Mercedes dealer might sell it as CPO because it fits with their product mix.

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bottlecap
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Location: Tennessee

Re: What would you do with this car?

Post by bottlecap » Sun Feb 04, 2018 8:47 am

Seems like you either gotta tough it out or eat the loss. Whichever is more palatable to your stomach.

JT

Admiral
Posts: 1463
Joined: Mon Oct 27, 2014 12:35 pm

Re: What would you do with this car?

Post by Admiral » Sun Feb 04, 2018 8:48 am

ERguy101 wrote:
Sun Feb 04, 2018 8:17 am
Hi there, I'm looking for some advice. About 18-20 months ago I made a bad decision and bought an expensive vehicle (my dream car). I ended up not loving the vehicle.

Info:
Out the door price: $160,000
Amount owed on loan: $115,000
Estimated value: $89,000 - $92,000
Monthly payment: $2800

I'm guessing I'm around $20-$25,000 upside down in the car. Yes this is stupid, and it pisses me off. I know it's my fault. I can "afford" the vehicle, but every month it hurts me seeing that much money going out for a vehicle that I don't love. I'd rather a $600-$700 monthly payment and put that extra $2000 into savings.

So, what I'm trying to figure out, is what the best thing to do is. I want to lease going forward because it's so easy for deductions (I'm 1099 multiple contracts), and because I know I'm not happy with vehicles for long periods of time.

Should I just sell the vehicle (to like CarMax) and pony up the difference? It just hurts to give $25,000 just to "break even". But I rationalize it as if I then lease a vehicle for lets say $600, then that's $2200 less a month, and in one year thats $26,400 saved which more than covers the difference.

... The other thing on my mind, is if I paid down the car to only owing $89,000, I could refinance and then be at a much lower note.

What would you do?
This vehicle has lost nearly 50% of its value in 18 months? That is really, really bad. I guess I'm not sure why you're just now understanding that paying $600 month is better than paying $2800 for a car. But whatever.

I would take the financial hit and move on. If you can afford a $2800 car payment you can afford to eat the 25k (which, as I'm sure you calculated, is not even a year of payments.)

You might try a private sale--does this expensive car have an affinity association (BMW CCA, Porsche owner's group)? If so, you might consider joining and trying to sell there. Aficionados may be willing to pay more.

bubbadog
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Re: What would you do with this car?

Post by bubbadog » Sun Feb 04, 2018 9:05 am

I would cut my losses, take the hit, and move on. :sharebeer

VGisforme
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Re: What would you do with this car?

Post by VGisforme » Sun Feb 04, 2018 9:09 am

Sell it and move on. Carmax probably isn’t the best here try a luxury reseller maybe on consignment.

Horrid car choice but you know that now. You’d have been happier with a loaded GL, your wagon is 1970s vintage army vehicle and you can only do so much there it lacks a lot of advanced manufacturing and tech.

Buy a used Bentayga! (Just joking).

wrongfunds
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Re: What would you do with this car?

Post by wrongfunds » Sun Feb 04, 2018 9:16 am

Or sell your Gulfstream instead! You do have one, correct?

cherijoh
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Re: What would you do with this car?

Post by cherijoh » Sun Feb 04, 2018 9:20 am

ERguy101 wrote:
Sun Feb 04, 2018 8:42 am
Mercedes G550 with all the stupid extra packages (tire wheel paint extended warranty, etc). I've already cancelled all the packages I can and the money from those were sent to the loan company to pay down the loan.
That was your dream car? Why?!? :confused

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MilleniumBuc
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Re: What would you do with this car?

Post by MilleniumBuc » Sun Feb 04, 2018 9:25 am

Looking at older year vehicles of the same line, are they continuing the devaluation trend, or hold steady and you have already taken a hit on most of the devaluation. The reason I ask is because investing 2 grand a month in the market now might give you more losses over the next 2 years than the car’s devaluation. My guess is that there are not many of this specific car for sale out there, so the value is what you price it at for sale and someone else will pay. Just because another one recently sold for 89k, doesn’t mean yours can’t sell for 125k. As long as you are not desperate to sell and there aren’t many for resale, you might be able to set your sale price. Just a contrarian point of view.

TwstdSista
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Re: What would you do with this car?

Post by TwstdSista » Sun Feb 04, 2018 9:31 am

Bah. A Mercedes G550 is my "I won the lottery" car. I might have to re-think that.... Or not, since I don't buy lottery tickets....

Rifampin
Posts: 78
Joined: Sat Jan 16, 2016 10:13 am

Re: What would you do with this car?

Post by Rifampin » Sun Feb 04, 2018 9:33 am

cherijoh wrote:
Sun Feb 04, 2018 9:20 am
ERguy101 wrote:
Sun Feb 04, 2018 8:42 am
Mercedes G550 with all the stupid extra packages (tire wheel paint extended warranty, etc). I've already cancelled all the packages I can and the money from those were sent to the loan company to pay down the loan.
That was your dream car? Why?!? :confused
I concur. From your username I am guessing you are an ER doc, so all things considered yes you can afford this car. Your "dream" car is probably one of worse vehicle as far as depreciation goes in the MB lineup. Unfortunately, you will be taking a loss regardless but a private sale (craigslist) will allow you to recoup the most for what it is worth. However, by trading down you will get a huge break on tax, title, and registration. So now that this is no longer your dream car, what are you hoping to replace it with?

gator15
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Re: What would you do with this car?

Post by gator15 » Sun Feb 04, 2018 9:34 am

I would eat the loss and move on. You can go on making payments to the tune of $110k or you can pay $25k and move on with your life. If I had to make $2800 monthly payments for something I hated I would cringe. It isn’t worth the stress. Sell it.

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ClevrChico
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Re: What would you do with this car?

Post by ClevrChico » Sun Feb 04, 2018 9:38 am

The reviews I've seen of this vehicle are generally not good. (Outdated design, bad daily driver. Not surprising for what is a 1970's military vehicle.)

I'd find a way to cut your losses the least. I wouldn't beat yourself up too much over it. You did get to drive a fancy car for a couple years.

bberris
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Re: What would you do with this car?

Post by bberris » Sun Feb 04, 2018 9:46 am

Park it in the Bronx? I'm kidding. Sell it now. (Sunk cost fallacy). It's sitting there reminding you and if you don't like it now you will grow to hate it. So what if you can afford it? Buy something you like.

Frisco Kid
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Re: What would you do with this car?

Post by Frisco Kid » Sun Feb 04, 2018 10:03 am

OP, sounds like you have had a change of heart regarding making the payments. Is that what has made what was your dream car no longer your dream car? A G550 as you know is a very niche specific vehicle, what made you want it in the first place?

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yukonjack
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Location: Rocky Mountain West

Re: What would you do with this car?

Post by yukonjack » Sun Feb 04, 2018 10:06 am

I would recommend taking your medicine now by selling it. Sounds like if you keep it, the car is going to eat at you mentally. Also I would second the opinion to not go through Carmax. I don’t believe a vehicle over $100k fit the typical Carmax customer profile unless you you are in a VHCOL area.

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burgrat
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Re: What would you do with this car?

Post by burgrat » Sun Feb 04, 2018 10:23 am

I too will say not to sell it to Carmax. I think that would be a guaranteed way to lose the most money.

mmmodem
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Re: What would you do with this car?

Post by mmmodem » Sun Feb 04, 2018 10:53 am

What's more likely to happen:

A. You sell your current car and take the loss. You lease another vehicle for $600-$700. You are happy.
B. You sell your current car and take the loss. You lease another vehicle for $600-$700. You are unhappy because your new lease is a drastic downgrade from a $160k car. You buy another $160k vehicle after paying an early lease return penalty.

People tend to "rubber band" to the extremes. My sister had a nice vehicle that she felt cost too much and she didn't like. When the lease was over, she decided to lease a much lower cost vehicle so she didn't feel guilty wasting money. Last month, she returned the lease 1 year early and paid the penalty. She was accustomed to a certain level of quality and the lower cost vehicle made her unhappy.

My suggestion to you:
Keep the current vehicle until you are no longer under water. Buy another $160k vehicle you do love.
Or sell the current vehicle and take the loss. Lease another vehicle in the $160k range.

Y.A.Tittle
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Re: What would you do with this car?

Post by Y.A.Tittle » Sun Feb 04, 2018 11:14 am

You can't change hisotry, so no sense in quetioning what you did or why.

I would sell it back to M-B for whatever I could get, accept the loss and buy a new Acura/Toyota/Lexus SUV. In a year you will be reveling in the money you saved on maintenance, insurance and depreciation.

LarryAllen
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Re: What would you do with this car?

Post by LarryAllen » Sun Feb 04, 2018 11:18 am

I would not sell it to Carmax. I would list on a few websites for high used-retail and see if you get lucky. Try that for a month or two. Can always dump it at Carmax in a month or two. We have all made similar mistakes so don't let it eat you too much. Just don't do it again! :)

mouses
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Re: What would you do with this car?

Post by mouses » Sun Feb 04, 2018 11:31 am

Y.A.Tittle wrote:
Sun Feb 04, 2018 11:14 am
I would sell it back to M-B for whatever I could get, accept the loss and buy a new Acura/Toyota/Lexus SUV. In a year you will be reveling in the money you saved on maintenance, insurance and depreciation.
+1 If something is making you nuts, sell it.

Reading this I'm feeling a bit better about how my assets decreased in the last few days.

I also am thinking about buying a new car, and my current cars are so old that I have no idea what new cars are like to drive. I have been thinking of finding out if it is possible to rent ones that seem possibilities. Is this something the OP could have done?

Admiral
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Re: What would you do with this car?

Post by Admiral » Sun Feb 04, 2018 11:33 am

I would not pay $2800/month for ANY car unless I earned well over $1m per year AND had 4-5m in the bank.

It's just insane what that amount of money could be worth in 10 years (not to mention 30) if if invested. Therefore I would not throw it away on a depreciating asset unless I essentially had enough such that I could live very well for the rest of my life without earning another dime.

bloom2708
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Location: Fargo, ND

Re: What would you do with this car?

Post by bloom2708 » Sun Feb 04, 2018 11:43 am

Keep the car. Pay off the loan. Stop making payments.

Drive the car. Enjoy the car.
"We are not here to please, but to provoke thoughtfulness." --Unknown Boglehead

HardHitter
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Re: What would you do with this car?

Post by HardHitter » Sun Feb 04, 2018 3:09 pm

I'd love to hear why you thought it was your dream car and why it now didn't meet your expectations.

For $160K, you could buy some great cars (Lambo/Ferrari/etc.) that would hold their value. No idea why you bought a G Wagon. Benz depreciate like no other after the first couple of years.

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Toons
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Re: What would you do with this car?

Post by Toons » Sun Feb 04, 2018 3:10 pm

Live and Learn.
Such Is Life.
5 years from now will it matter?
Not.
:D :D
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

Lafder
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Re: What would you do with this car?

Post by Lafder » Sun Feb 04, 2018 3:28 pm

Do you have another vehicle to drive if you sell this one?

If you trade it in at the dealership, they may eat part of the "loss" you would take since they get to show the sale of another vehicle on their records which gives them quota bonuses etc, and keep you as a customer and make money off of service.

Dealerships are worth a try to get the upside situation to as much advantage as possible to get you into a less expensive new or used car from them.

lafder

ERguy101
Posts: 32
Joined: Sat Jul 04, 2015 11:09 am

Re: What would you do with this car?

Post by ERguy101 » Fri Mar 23, 2018 4:20 pm

Just an update... Sold the vehicle, leased a truck. Yearly auto insurance goes down by $2000! I will save over $100,000 over the next 5 years between monthly payments and auto insurance. Just the interest I paid on the loan in 2017 would have covered 8-9 months of leasing the truck. Luxury vehicles are for the birds!!!

smitty1515
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Re: What would you do with this car?

Post by smitty1515 » Fri Mar 23, 2018 4:42 pm

160k for a box with wheels?! If I was you I’d take it to the MB dealership and see what they have to say. The depreciation seems insane. Best of luck.
Be fearful when others are greedy and greedy when others are fearful. -Warren Buffett

bubbadog
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Re: What would you do with this car?

Post by bubbadog » Fri Mar 23, 2018 5:45 pm

ERguy101 wrote:
Fri Mar 23, 2018 4:20 pm
Just an update... Sold the vehicle, leased a truck. Yearly auto insurance goes down by $2000! I will save over $100,000 over the next 5 years between monthly payments and auto insurance. Just the interest I paid on the loan in 2017 would have covered 8-9 months of leasing the truck. Luxury vehicles are for the birds!!!
Don't be too hard on yourself. We all do things we regret. You made a good decision. :sharebeer

keinodoggy
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Re: What would you do with this car?

Post by keinodoggy » Fri Mar 23, 2018 5:57 pm

Glad to hear you got rid of it. That is one ugly vehicle!

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Nestegg_User
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Re: What would you do with this car?

Post by Nestegg_User » Fri Mar 23, 2018 10:58 pm

ERguy101 wrote:
Fri Mar 23, 2018 4:20 pm
Just an update... Sold the vehicle, leased a truck. Yearly auto insurance goes down by $2000! I will save over $100,000 over the next 5 years between monthly payments and auto insurance. Just the interest I paid on the loan in 2017 would have covered 8-9 months of leasing the truck. Luxury vehicles are for the birds!!!
glad that you took your medicine (per yukonjack)

but I sentence you to a conversation with “PoF” to try to figure out WHY you did that :oops:

denovo
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Re: What would you do with this car?

Post by denovo » Sat Mar 24, 2018 4:38 am

ERguy101 wrote:
Fri Mar 23, 2018 4:20 pm
Just an update... Sold the vehicle, leased a truck. Yearly auto insurance goes down by $2000! I will save over $100,000 over the next 5 years between monthly payments and auto insurance. Just the interest I paid on the loan in 2017 would have covered 8-9 months of leasing the truck. Luxury vehicles are for the birds!!!

How much did you sell it for?
"Don't trust everything you read on the Internet"- Abraham Lincoln

IowaFarmBoy
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Re: What would you do with this car?

Post by IowaFarmBoy » Sat Mar 24, 2018 5:57 am

denovo wrote:
Sat Mar 24, 2018 4:38 am
How much did you sell it for?
And how did you sell it? Hope it was on craigslist! :?

ERguy101
Posts: 32
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Re: What would you do with this car?

Post by ERguy101 » Sat Mar 24, 2018 6:38 am

IowaFarmBoy wrote:
Sat Mar 24, 2018 5:57 am
denovo wrote:
Sat Mar 24, 2018 4:38 am
How much did you sell it for?
And how did you sell it? Hope it was on craigslist! :?
Amazingly, the dealership where I leased the truck bought it. They paid $2000 less than what I was expecting based on KBB and eBay sales.

I definitely learned my lesson! No more stupid financial decisions!

Bacchus01
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Re: What would you do with this car?

Post by Bacchus01 » Sat Mar 24, 2018 7:37 am

Provided you don’t rebound and buy one again, 20 years from now this will be a fun story to tell and nothing more.

wrongfunds
Posts: 1908
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Re: What would you do with this car?

Post by wrongfunds » Sat Mar 24, 2018 7:46 am

I think you will get a pass on leasing your truck on this forum. You are very lucky. anybody else would be skinned alive for leasing a vehicle.

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