Tuesday, May 15, 2012

A Sale, A Purchase, A Debt Erased

And we're back for the second time this month!  This time with feeling!

While we've been making good progress on our debt snowball we felt that we could be doing more.  We also felt that driving two cars that get average to below average gas mileage wasn't the best thing, and considering used car values are higher than normal now, we decided to sell Kristi's car.

A bit of history on her 2004 Subaru Impressa TS.  It is Turbo Sport (hence the TS) with a 2.5L engine and, of course, All Wheel Drive.  In 2010 she purchased it for $8,500 from a guy who drove it over from Boston (coincidentally she now sings in the same choir with him!).  He listed it below blue book because of some cosmetic blemishes and because he just wanted to sell it quickly.  The car had just 35K miles on it.  She happily purchased it and has loved it every minute since then.  Except for the gas mileage.  She gets about 23 MPG combined city/highway, and about 28 just highway.  Not bad, but not great.  Still, in 2 years she put 46K miles on it.  Riley did some cosmetic damage on the interior (he chewed up the stereo and the turn signal lever), and we carted the dog/cat/gear around in it.  Needless to say, we used it and drove it hard.  It went to Utah, to California, to Idaho, to Washington, and all over Oregon.  It has been a great car, but it was time to downsize and help push us toward our Debt Free goal.

She listed the car at a ridiculous price on Craigslist, $9,995.  Blue book had the car $7,500 for private party in Good condition.  The Dealer Price in the same condition was around $12,000, so she picked a spot somewhere south of the middle.  The interest was very high, which surprised us considering the price.  However, most people flaked or wanted to pay closer to blue book, which wasn't surprising.  We figured we'd hold out for a little while and then drop the price to about $8,500 and see if we could sell it for that.  If not we probably would have just kept the car.  But, luckily for us, the interest was still there and we found someone to buy the Subaru for $8,700.  We probably could have held out for $9,000, but it wasn't really worth the hassle.

While Kristi had the car up for sale we were also looking for a suitable replacement.  We wanted to stay in the $2,500 or less price range.  It didn't make sense to sell the car and then buy a car that didn't leave us enough money to pay off a student loan, which was the whole point of this whole thing.  We were aiming for a Geo Metro or something similar.  However, the prices for Geo Metros are all much higher than they should be because the gas prices have gone way up ($4.19/gallon at the moment and rising).  Honda Civics, Hyundai Accents, and other similar small cars are all selling much higher than their KBB value because of their gas saving value.  We checked a few cars out, but they were not in great shape or they were just overpriced.  For example, this Geo has a KBB around $2,300 from a dealer, and it's going for $4,900.  Crazy, right?

So Kristi contacted Scott, Ben's roommate, who was selling his 2000 Ford Focus.  The original idea for selling the car came from seeing his Focus was for sale anyway, so she decided to see if he still had it.  As our luck would have it, he did!  So we set up a time to see the car and take it for a spin.

Kristi fell in love.  We talked it over and bought the car.  We bought it for $1800.  Buying from someone we know has been nice as there have been a few questions after the purchase we've been able to get answers to.  The car came with snow tires installed, but we had to purchase regular tires (about $380), so we're still in under our budget for the car.

Using the rest of the proceeds from the car we were able to pay off my last remaining Gate Loan of $4,830!  We have one of Kristi's student loans left before we tackle the Last Loan.  There's a chance we can pay off Kristi's loan next month because of her two paychecks, but we might hold off to make sure the summer isn't a disaster.  What's the point in paying off a student loan if we're just going to charge up a credit card because we have no cash?

We also decided to get a new mattress, which we have been putting off for a few years.  We found a King Size Malm frame in the IKEA As-Is section and snagged it and everything needed for the setup (slats, midbeam) for $155.  The whole setup new would have been over $350.  So, with frame in hand we set out to get a new mattress.  We tried a few mattresses out at Sleep Country and then went with a memory foam mattress from Costco that has great reviews and was only $900 (compared to a similar model at Sleep Country being $2,500).  We'll be getting the mattress in a few days and we'll see how it goes.  We're not worried because Costco has an awesome return policy, so if we don't like the mattress it won't be an issue to return it at all.

Wow... this has turned into a long post, so I'll draw it to a close.  We've mowed down another loan, taken care of a pressing need, and have lowered our total student loan debt to just a hair over $28,000.  After next month we'll be below $25,000.  If we can stay focused we'll be Debt Free in time to celebrate our 2 year wedding anniversary, which would be quite the celebration indeed.

1 comment:

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