How I made over $5,000 when I sold my used car
For over two years and 70,000 miles I drove my Volkswagen TDI Jetta. When I sold it, I profited over $5,000! Now, I'll admit there is some luck to this story, but even when you get lucky you still have choices to make that will either produce more luck or put you right back in the same situation you were in before. There is a compound effect to every decision you make.
If everyone remembers the large Volkswagen scandal, then you know what I'm getting at. I loved my Jetta because it served its purpose extremely well. I was living in Malvern, PA which is a suburb of Philadelphia. Almost every weekend I would drive over 300 miles one way back to my hometown of Clymer, NY to be with family and my fiancé.
So, as you can imagine I was putting a ton of miles on my car. It was great, I do all of my best thinking when I'm in the car. Plus I listened to just about every Bigger Pockets podcast under the sun and any other investment focused podcast I could find.
This was also when I was studying for the Chartered Financial Analyst exams so I had even recorded myself reading flash cards so I could have a way of listening and studying on my long drives home.
The Jetta was a perfect car for this because of its comfortable ride and extremely good gas mileage. It was a diesel, so I actually got about 50 miles to the gallon! That's hard to beat. About the only thing better would be if self driving cars were a thing during this time.
When the news broke about the Volkswagen emissions scandal I wasn't sure what would happen, but reading the details of the vehicles affected I knew mine was an affected vehicle. If you're not sure what I'm talking about, Google Volkswagen emissions scandal and you will be all caught up in 5 minutes.
I got a great deal on the car. I bought it for $14,000 when the normal going rate at the time for the same vehicle with the same mileage was closer to $17,000. My vehicle was R-titled, but I brought my brother along who is a motor head to inspect the vehicle and make sure it was clean. It was in a front end collision, but not that serious.
The car was just totaled for insurance purposes. Ultimately, they put a new bumper on and a new hood and everything was good to go. Over the two years I drove that car I didn't have a single problem with it.
I would buy another Jetta in the future. Someday I'll buy a much cooler car, but when your frugal and focused on personal finance like I am at this age then you will find the Volkswagen Jetta to be a perfect vehicle for your needs. Let me just say they are infinitely cooler than a Prius.
I waited several months to hear from Volkswagen as the story kept unfolding. Finally, one day I received an offer letter from them explaining what they would be offering. I had the option to either take a cash lump sum payment and allow them to "fix" my car for free or I could sell it back to them at a price that was based on a few factors such as mileage and age.
Ultimately, the lump sump payment was somewhere around $2,000, but I can't remember for sure. What I do remember, though, is that I could sell the car back to them for $19,000 when I only paid $14,000 for it!
Again, I drove the car for two years and a ton of miles, yet I still had this great opportunity to profit $5,000 from my car! That just doesn't happen these days. Everyone knows how vehicles depreciate.
I didn't even want to get rid of the car because I liked it so much, but that was just to good of a deal to pass up. Plus I was moving home from Philadelphia so I knew I would no longer have those long drives to worry about.
I sold the car back to Volkswagen in the summer of 2016 and then I purchased an old 2002 Cadillac Seville from my dad that he was about to scrap. I bought it from him for $1,000.
This car was in such rough shape he didn't even want to sell it to me, but I was adamant. My commute is less than a quarter mile to work, so I didn't care. I figured if it ever broke down I could just walk to work, which I had to do multiple times!
My point is I could have taken all that money and bought a nicer car or splurged on a lot of other things. Instead, I invested it and drove a car I owned free and clear. I don't care about impressing people I don't know in a car that is too expensive. I'd rather get rich quietly.
That tiny shift in thinking should apply to all of the financial decisions you make in your day to day life. Over time, the compounded effect of these actions will have an astronomical affect on your net worth. I drove the car for over a year and even took it on a long road trip to Georgia and Nashville where I got engaged to my fiancé, Meghan. So it was a great year and yes my car was the butt of many jokes from my friends, but in the end I'll be the one laughing when I'm rich.
It finally broke down one day in front of the barber shop. I could feel it coming when I pulled up to the shop. All the electronics quit working and it was making funny noises and my windows wouldn't budge. I was already having trouble getting the car to start so I tried to leave the car running while I got my haircut.
I came out an hour later and it was off with no chance of it starting again. Luckily, I own my own tow truck from my self storage business so I came back later that night and towed it home.
I had worked on it enough at this point that I was ready to move on. I got a ton of benefit from it, but I was ready for something a little more reliable.
I was looking for another diesel Jetta, but the market for them right now is quite small since so many of them were taken off the road as a result of the scandal.
Instead, I stumbled across a great 2015 Chevy Cruise that has been a great car. It only cost me $10,000 so I still ended up coming out ahead as a result and it allowed me to beef up my investment portfolio.
I'll call that a win in my book. That will probably be the only time I profit from a vehicle in my lifetime, but the point is to take advantage of opportunities when you have them!
A $5,000 profit doesn't seem monumental, but invested at 10% for 40 years, that small win translates into $226,000! That's also assuming I don't add a single penny to the investment over those 40 years. Compounding is a beautiful thing. What small wins are you making each day to help you reach financial independence?
#investing #financialindependence #driveacheapcar #investyourcarpayment #millionaire #money #cashflow #passiveincome #debtfree #liveyourpassion #personalfinanceblog #profits #capitalgains #coinstackfinancial #compounding #compoundeffect