Downsizing to One Car

Yesterday, my wife and I sold our 1990 Toyota Celica. We are now a suburban rarity: a family with only one car (a 2002 Toyota Camry).

Actually, for most of the past 20 years, I have only had one car (the Celica). I bought it in 1990, after I graduated college. I always either worked near my home or took the train downtown, so I never drove much (the Celica only had 110,000 miles when I sold it yesterday).

In 2005, we got the Camry because we were expecting my son, and needed a four-door car. Also, with an infant, my wife could not drop me off at the train station early in the morning. We bought a 2002 Camry for cash because, based on the longevity of the Celica, we learned that it is a waste of money to buy a new car (especially with a loan).

Today, we don't really need two cars. My wife doesn't work, and I now work from home - so the Celica was mostly parked on my driveway. By converting the car into cash, I figure that I have trimmed more than $50 per month in expenses (insurance, license plate fee, maintenance, gas, etc).

I put an ad on Craigslist Saturday morning, and sold it on Sunday. I listed the car for $2100 and managed to get $1550 (I disclosed the power steering leak). My wife thought we should have gotten $2000, but most of our friends thought I did well selling a 20 year old car for that much in the current market.

This experience demonstrates the depreciating nature of cars (as opposed to houses):

I bought the Celica for $18,000 in 1990 dollars. I paid more because I had a five year loan at about 13% (I paid it off in 2 years).

I sold the Celica for $1,550 in 2009 dollars.

I think I made out well because I kept the car for 20 years. But, to me, the experience reinforces my view that one should never buy a new car.