The purchase of my first car was an epic adventure. It involved six months of research, flying halfway across the country, and learning how to drive stick. In that time I went from clueless (and could-care-less) about cars to a gear-head. Or, more specifically, a Miata-head.
MIATA. Miata. Is. Always. The. Answer. I bought into it, figuratively and literally. I can identify every Miata on the street– what year it is, what edition and trim. After the First Time Car Buyer’s Wild Ride, I was a proud owner of a Copper Red Mica 2009 MX-5 Miata Grand Touring 6 speed with a power retractable hard top.
This week, after a mere two years of ownership, I watched it drive away.
My friends who knew the story from the beginning had this to say (in many different variations):
“Nooooo. Why? You worked so hard to get it!”
I had a hard time verbalizing the why until I realized it all boiled down to cost and benefits. Some of the costs are intangible and hard to explain, while others can be figured out easily by tallying up bills. Did the benefits make the costs worth it?
In order to explain why I sold my dream car, I listed out all the tangible and intangible costs and benefits.
Intangible Benefits of Owning a Car
Just as every article raved, the Miata is a joy to drive. It turns tight corners, handles well, and accelerates quickly. Shifting up from a red light never failed to bring a smile to my face.
Technically “our” first car is really Mr. Mechanic’s. I wanted to be mobile on my own terms rather than always feel like I was borrowing someone else’s car.
Tangible Benefits of Owning a (Second) Car
The main reason to own and maintain a car is to get you one place to another. Certainly there are other methods such as public transportation, biking, or walking, but owning a car provides the flexibility to travel on your own terms. Owning a second car really boiled down to convenience.
Whenever I proposed selling the car, Mr. Mechanic and I would trade examples back-and-forth about that one time when it was really nice to have a second car:
- When Mr. Mechanic was out of town I drove myself to an urgent care center for medical treatment.
- I could drive separately when we had errands on opposite sides of town.
- I could drive myself to meetups while he had the other car for work.
Intangible Costs of Owning a Car
Full Mental Plate
Many things we own require regular maintenance and care. We approach purchasing them like an all-you-can-eat buffet, thinking that in small portions we will be able to handle the load. However, each thing takes up space in our thoughts. If you are like me at a buffet, you get to your table with a burgeoning plate you can barely stomach.
Thinking about car maintenance took up an inordinate amount of space on my mental plate. Any time something broke or squeaked or leaked it was more time spent diagnosing, watching Youtube videos, or calling up local shops to collect quotes for a fix.
Everyone knows that a car loses value the second it drives off the lot. But what about the loss of value as it sits in your driveway? According to Black Book, depreciation of used cars varies between 15-18% per year. An online calculator for car depreciation totalled the approximate value lost in the two years I owned the car to be $3,078.
There were no bills showing up at my door, but I knew as time ticked by that the car was slowly losing value.
Lost Opportunity of Growth
In addition to depreciation, I was also losing out on gains from investing the money. If we kept to one car, we could put the money to work in the market. In the short term these gains might be small, but over time they increase and compound to be significant assets.
Tangible Costs of Owning a Car
Then there are the physical costs that you can actually sum up. According to the 2018 AAA Your Driving Costs survey, the cost of gasoline, maintenance, insurance, license and registration, loan finance charges and depreciation totals a staggering average of $8,849 per year. This means the average person in the US pays nearly $9,000 every single year simply for the privilege of driving.
That number seemed rather high to me, so I tallied up all of my costs.
My total annual cost is much lower than average, likely due to the Miata being a smaller car that I bought outright. However, I felt the hit of every insurance payment. The regular oil changes. Small things breaking over time. Big things breaking (like the time I clipped the curb and ripped the skirt off of the car). I fixed a bunch of things myself, which brought the cost of maintenance down significantly. However the cost of maintenance would certainly go up in the next few years when I needed to replace tires and address other scheduled maintenance as it hit 70,000 miles.
Together, the annual cost ($1655) and estimated depreciation (~$1200) come out to $2,855 per year. Ultimate convenience did not seem worth it, especially when I factor in the fact that I almost never drove the car. I worried about damaging it as I knew that I would likely resell it. There was extra pressure to keep it in excellent condition. Every time I drove it I felt like I was wearing a prom dress to a baseball game. All told, I put two thousand miles on it in two years. At that point, maintenance and depreciation alone make quite a steep price to pay when an Uber ride or some planning in advance would do.
The costs outweighed the benefits, so I sold my dream car. The initial effort and time spent researching and buying the car was a really great learning experience. However, if I decided to keep the car just because of all of that effort I would be succumbing to the sunk-cost fallacy. Who knows, maybe down the line we will need a second car and I can buy a newer(depreciated) model Miata using the gains from investing the amount I sold it for!
To fill the fun factor I plan on bouldering after work and investing in other hobbies on the weekends. As for convenience, we intentionally moved closer to work/school so we can both commute by bike. I bought a road bike and listed the Miata on Craigslist.
I originally bought the Miata two years ago for a base cost of $10,700, which amounted to $12,000 after factoring in travel and shipping. All of my careful planning and knowledge of the Miata-market paid off when I listed the car.
I put it up for $13,200. I was in no hurry and was receiving plenty of interest, so I stayed firm when interested buyers attempted to negotiate. The second interested buyer agreed to buy it at full asking price and it sold within the week.
While I felt a pang watching it drive away, I also felt the weight of the intangible costs lift off of my shoulders. My mental plate felt less crowded. Every morning I bike to work with a smile on my face– the same smile that used to be spurred on by the spritely Miata. I enjoy the wind whishing by as I cruise down a hill, hair whipping around like it used to with the top down. I find the same happiness in new ways, with a smaller price tag.