I got a head start on my 2010 goals Tuesday night: I sold the Bimmer. This happened faster than anticipated and not exactly according to plan. I was listening to NPR en route to work Tuesday when I heard a story about GM's "Fire Sale" to move all remaining new Saturn and Pontiac models from dealers' lots.
I knew I was upside down on the Bimmer and I knew I wanted to reduce my debt load. I spent a good part of my day researching the Pontiac G5. I'd driven the G8 several times. It's a sexy car - I even took it for a test drive and compared it to the Bimmer earlier this year, but picked the Bimmer at the time because of the uncertainty around the future of Pontiac.
Now that its demise is official, I did some research and decided I was comfortable buying a car from a brand that has ceased to exist. The G5 is identical to the Chevy Cobalt, which is still in production.
According to Edmund's True Market Value estimate, the $13,300 I paid for the car (after a fat $6,500 rebate from GM) is within a few hundred dollars of what I should have paid. On the other hand, I received $1,800 more for the Bimmer than I was offered by Carmax in October.
I debated the wisdom of taking the negative equity in the Bimmer and financing it with the purchase of the G5. In total I had over $5,000 in negative equity. That I could finance this - basically no questions asked- surprised me in light of today's credit markets.
My monthly car payment will be less than half what it was, saving me over $400 per month. At the same time my total debt load has been reduced by over $17,000. My plan is to keep paying what I had been paying, as well as applying any excess funds I have, in order to pay the car off ASAP.
Additionally, I will completely "write off" the value of the G5 in Quicken in 2010. This will affect my net worth calculation but I want to be super conservative, particularly considering the Pontiac brand is fading away.