Today marked a big day for me… I sold my brand new car to fulfill my dreams of starting a homestead. I bought my 2013 Subaru Legacy a couple of years ago as I felt it was time to graduate from my 2001 Saturn L200. I had a job with a decent income, I was relocating to Colorado for work and wanted something with AWD or 4WD for snow driving, and I suppose I thought it would be a good investment – but the time came to say goodbye to fulfill bigger dreams.
For the blog post in a nutshell watch this video to hear my thoughts on selling my new car, but read the blog post for the juicy details of the outcome.
However, Jesse and I have a goal of owning our land and home outright, being debt-free, and having little financial overhead so that we could focus our energy and time on what we wanted to do rather than slaving away to make money and working jobs that rob our souls from us. We took a good hard look at our combined debt and combined expenses and it became obvious that keeping my brand new car was holding us back from achieving our goals, not helping us to achieve them quicker.
Details of The Car, Purchase & Finances
Back in 2013, I purchased my car for around $24,000 with $10,000 down and then took out a 4-year loan with a 0% interest rate. This left me with a payment of $285/month for the four years to follow. Prior to listing my car, I took a look on Kelly Blue Book and it seemed that it was still worth around $20,000. It took a bit of a depreciation hit but it seemed that I could still get a large percentage of my investment back if I were to sell it.
Over 27 months I was able to pay down my loan quite a bit. Even though I only had around $5,3000 to pay off, there was a lot of equity in the car ($14,000 or so) that we could use to buy our land, buy materials to build a barn for our trailer, install a septic system and/or install a small solar power system. Once we have our land paid off and own our dwelling (even if it’s a travel trailer for the time being) our overhead would be reduced significantly not to mention we would be pretty free an our need for money would be less.
The Challenge: Card Depreciate & Window to Sell Was Small
If I didn’t pull the money out of my car, the car would continue to depreciate. Also, as I knew it was unlikely to get a full cash offer on the car, I thought that someone would likely need to get a loan and banks don’t like to loan money on used cars that are more than a few years old. I figured I would have a year or two to sell it before banks would no longer be interested in lending on it.
I Didn’t Drive This Expensive, Brand-New Car
To put a cherry on top of my decision, we also make our income online while homesteading and assume we should be able to continue to do so for the foreseeable future. I’ve been self-employed and location-independent for 18 months now and I drive my car 2-4 times per month… mostly to town and back. With my insurance payment I was spending close to $350/month for a new car that never leaves the driveway. When we leave the house we are usually in Jesse’s Forester as we are frequently picking up supplies or if we go on road trips, it has much more sleeping room and more ground clearance for the dirt roads we frequently find ourselves on.
I was left with two decisions: I could continue to pay $350/month for this car I never drove only to have it depreciate over time, or I could pull out the equity and use it to help us transition to the lifestyle we desire.
Decided to Sell Car ASAP
I listed my car on Craigslist and a couple weeks later had a nice woman contact me that wanted a used Subaru Legacy with low mileage that was treated well. I met with her to let her test drive the car and three days later (today!) we met her at my bank to completely the transaction. After Jesse gave her a short lesson on how to use the fun features on the car and helped her connect her phone via Bluetooth, she was off and I had an extra $14,000+ in my bank account.
It couldn’t have worked out better. Right now, it seems that everything is falling into place exactly as we had hoped. My car sold for the highest price we could reasonably get for it, we are in the middle of selling Jesse’s business and that should be wrapped up within two weeks, we should close on the property within 5-10 days, we purchased a pickup truck, we are ready to pick up our trailer, we’ve put in our 30 day notice to our landlord, and we are planning on arriving on our homestead in Idaho within the next couple of weeks.
After the past 18 months of complete chaos, it would be a pleasant surprise if our transition goes as smoothly as planned, but we definitely aren’t in the clear yet and aren’t counting our chickens before they hatch.
Temporary Letting Go of Material Possessions to Accomplish Greater Goals
In a nutshell… one must look at the things in their life and determine if those things are helping them achieve their goals or holding them back. It is hard to let go of things that are holding us back because we are programmed to constantly buy new things and to “upgrade” whether it is a new car, bigger house, etc. and that is simply to keep us as chronic consumers and to be slaves to our debt. I’m not saying we will never own a new car again or that we won’t strive to build a very nice home because likely, we will! We love nice things! But we are temporarily parting with some of our things and putting our money where it will help us most.
We constantly need to remind ourselves that things never make us truly happy like freedom and doing things we love does.
With that said, we are yet another step closer to getting settled on our land in Idaho. We are optimistically eager to see what the next week brings. Stay tuned!
One Year Update: How Did it Work Out? Do I Have Regrets!
I just wanted to update this blog post to let any new readers know how this decision has played out for us over the past year!
I probably don’t have to tell you, but we closed on our land shortly after writing this blog post, we moved to Idaho within a couple weeks of writing this post, and we used the $14,400+ to fund the initial development of our property.
While we haven’t yet started construction of our home, we were able to get in a septic system, buy a four wheeler to get around our property and do property chores, build a simple shelter for our RV as well as a cabin addition, build a wood fired cedar hot tub, build a lovely deck overlooking our beautiful property, and we’re primed to start construction of our timber frame home in spring.
Now that we’re living the homestead lifestyle, I’m so happy I don’t have a brand new car anymore. We’re happy we have a car that we aren’t afraid to get a little dirty, and we’re so happy we only have one car payment on a car that we bought used. We’re happy we own our truck outright even if we have to do occasional maintenance on it.
When we’re simply enjoying our property, I really feel a sense of freedom and hope for my future. I feel that building a home cash and living debt-free is possible, and now that we live in nature, we really don’t miss the material possessions we clung to in the city. Once the band-aid was ripped off, we never looked back.
We like to think now that every dollar we spend is going towards increasing the permanent value of our property… no money is spent on things that just deteriorate and depreciate over time as my new, expensive car would have done.
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