Downsizing to one car in a pandemic

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peseta
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Downsizing to one car in a pandemic

Post by peseta »

My wife and I each have a car. Since the pandemic started and we've been working from home, she has rarely used her car, and mine has been used sparingly as well. Even with small kids, I can probably count on one hand the number of times both of us have been using our cars at the same time since covid started.

We were planning on upgrading her car sometime in the first half of next year. I heard on Clark Howard's show that used car prices have spiked for weird supply-demand reasons related to the pandemic. Indeed they have -- her car's value per KBB and Edmunds is up 15% or so since the beginning of the year.

So, we're thinking of striking while the iron is hot. I got an offer from CarMax today that is actually in line with private party estimates. It seems to make sense to downside to one car now, and get her upgraded replacement next year (probably timed with a return to the office). Not only can we take advantage of the market, we can save on car insurance and other expenses related to her car for a little while.

Any downsides I'm missing here? Thanks!
Tingting1013
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Re: Downsizing to one car in a pandemic

Post by Tingting1013 »

No downsides except to check Carvana, Vroom, and Shift for potentially even higher offer.
LittleMaggieMae
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Re: Downsizing to one car in a pandemic

Post by LittleMaggieMae »

is there some benefit on the sales taxes you would pay when you buy the new car if you have a 'trade in"? and is the amount substantial?

I've heard some states have a thing where say your new car is 40K and you are getting 10K for your trade in vehicle... the sales tax on your new car is calculated on 40K - 10K = 30K.

I didn't actually do any math - so I have no idea if this would even make a difference in the big picture.
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peseta
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Re: Downsizing to one car in a pandemic

Post by peseta »

LittleMaggieMae wrote: Fri Oct 16, 2020 9:17 pm is there some benefit on the sales taxes you would pay when you buy the new car if you have a 'trade in"? and is the amount substantial?

I've heard some states have a thing where say your new car is 40K and you are getting 10K for your trade in vehicle... the sales tax on your new car is calculated on 40K - 10K = 30K.

I didn't actually do any math - so I have no idea if this would even make a difference in the big picture.
Thanks -- in my state there is no such benefit.
delamer
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Re: Downsizing to one car in a pandemic

Post by delamer »

I am not 100% clear which car you are selling. Is it your wife’s cuurent vehicle?

If so, is your car the better option for the family if you’ll only have one vehicle?

Also, if you get a multi-vehicle discount on your insurance, the cost for the vehicle that you keep may go up (although your savings will still be substantial).
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Watty
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Re: Downsizing to one car in a pandemic

Post by Watty »

peseta wrote: Fri Oct 16, 2020 9:10 pm Any downsides I'm missing here?
One potential problem is that when you get to the point where you need two cars again then you may need to buy a car in a hurry even if you can't find a good deal on the type of car you want.

For example at some point you may be notified by one of your employers that you need to start going back into the office next week. If both the person going into the office and the person working from home then needed a car then you would need to buy a car in a hurry in an equally bad car market.

I have had to buy a replacement car in a hurry and that is not a lot of fun.
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wander
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Re: Downsizing to one car in a pandemic

Post by wander »

I still keep my cars because all I pay is $200 (insurance) and $75 (DMV renewal) a year. When the pandemic is over and you are required to go back to work like before, you will have to buy car again. You may get better deal, but for me it's not worth time since I am driving an old car. But it may make sense to you.
Tingting1013
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Re: Downsizing to one car in a pandemic

Post by Tingting1013 »

wander wrote: Fri Oct 16, 2020 11:00 pm I still keep my cars because all I pay is $200 (insurance) and $75 (DMV renewal) a year. When the pandemic is over and you are required to go back to work like before, you will have to buy car again. You may get better deal, but for me it's not worth time since I am driving an old car. But it may make sense to you.
You also pay depreciation.
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wander
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Re: Downsizing to one car in a pandemic

Post by wander »

Tingting1013 wrote: Fri Oct 16, 2020 11:15 pm
wander wrote: Fri Oct 16, 2020 11:00 pm I still keep my cars because all I pay is $200 (insurance) and $75 (DMV renewal) a year. When the pandemic is over and you are required to go back to work like before, you will have to buy car again. You may get better deal, but for me it's not worth time since I am driving an old car. But it may make sense to you.
You also pay depreciation.
That's correct. That's why I mention my car is old so depreciation is nothing.
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whodidntante
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Re: Downsizing to one car in a pandemic

Post by whodidntante »

Depreciation is the main expense here, but as a connoisseur of fine hoopties, I can tell you that a car sitting unused will have surprisingly high maintenance costs per mile driven. If you have expensive cars, you are probably better off financially to sell one. Preferably the one that is worth the most. Maybe you'll end up taking an Uber a few times if they aren't bankrupt yet.
MikeG62
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Re: Downsizing to one car in a pandemic

Post by MikeG62 »

Watty wrote: Fri Oct 16, 2020 10:20 pm
peseta wrote: Fri Oct 16, 2020 9:10 pm Any downsides I'm missing here?
One potential problem is that when you get to the point where you need two cars again then you may need to buy a car in a hurry even if you can't find a good deal on the type of car you want.

For example at some point you may be notified by one of your employers that you need to start going back into the office next week. If both the person going into the office and the person working from home then needed a car then you would need to buy a car in a hurry in an equally bad car market.

I have had to buy a replacement car in a hurry and that is not a lot of fun.
Agree - this is the main risk in my mind.

Assuming you are comfortable with this risk, I think it makes sense in your circumstance.

FWIW, the lease on my Audi ended in late July. I turned in my SUV and ordered a new 2021 MY of the same vehicle. Estimated delivery is Nov of this year. DW and I have been using her SUV. We are retired so much less risk one of both of us will need the car to run to the office. Since I've not yet returned to the gym this remains workable. Once I go back, might be more of a challenge. By then I hope my new vehicle has arrived. Saving on lease payment and auto insurance in the meantime. Savings will go to offset one-time upfront costs of the new lease (bank fee, doc fee, MV fee, etc...).
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chemocean
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Re: Downsizing to one car in a pandemic

Post by chemocean »

We downsized to one car during COVID: A high-mile range (50-70) electric hybrid. Since we have not taken road trip since COVID, we have not put gas in the car. The hybrid is nice for road trips, since we do not have to worry about charging anxiety.
Check with insurance company about your car insurance costs with one car. You will be surprised that going to one car will not save you that much in auto insurance because of the large multi-car discount on each car.
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gr7070
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Re: Downsizing to one car in a pandemic

Post by gr7070 »

Meh.

What if values continue to rise; you'd lose selling it now. Unsure how you know where the car market is going.

Additionally, you're (potentially) only gaining 15% of what I presume is an older, lower value car.

I'm not inclined to go out of my way for this savings. It'd be different if this was an indefinite, lifestyle change; but for a year and modest savings. Meh.
Mike Scott
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Re: Downsizing to one car in a pandemic

Post by Mike Scott »

Sounds like it should work for you. Just start casually watching the car market so you don't end up in a rushed or surprise purchase when you need the new car. You may even decide you don't need two cars at all. I was thinking about a new car this year but decided my old car can hold out a little longer until (perhaps) some of the economic uncertainty and job risk settles back to "normal". I was also watching for the great pandemic car sale which never really happened; maybe next time and I've got my three top choices picked already.
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peseta
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Re: Downsizing to one car in a pandemic

Post by peseta »

Thanks all for their thoughts. To answer a few questions from above, we'd be keeping the larger family car. My wife was already working remote before covid, and I work for the feds, so I will have at least several weeks notice of a return to the office (i.e., little likelihood of needing to make a spur-of-he-moment purchase). I live near mass transit; I usually drive to our local station and ride the train in during normal times, but I can easily bike there for a bit if necessary.

I'll update this thread when we finalize our decision, appreciate all the input.
mr_brightside
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Re: Downsizing to one car in a pandemic

Post by mr_brightside »

you'd save a bunch that's for sure

and don't forget -- if you ever 'need' and second car -- you can always rent one for the necessary time period...

we have started renting cars / minivans for our longer road trips ... less wear and tear on our daily drivers (1,000 mile + trips)
remember Enron?? I do
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