QuestionI need help in determing the price of a car.
I bought a Toyotall Corolla for $18,000 in 2013.
monthly payment is $400/month.
I pay off 18 months already. That would add up to $7200. I am giving the car to my parent, They will continue to pay off the payments that are left. But of the 18 months that I pay for the car and used it,
1. How much do I hope that my parent owe me for the 18 months payment? I am thinking $7200
2. If the car is payoff in 4 years. How much will the car be worth to sell at (max) price or what the Toyotall Corolla would be worth?
AnswerHello,
Because your situation is unique and the answer would only apply to you and your parent, it is a difficult question to answer.
I suppose this would depend on the relationship you have with your parent and how close you are to them.
You state you have used the car for 18 month and have paid $7,200.00 and parent would take over payments for the next 4 years. The first question I have here is that you state you were going to "Give" the vehicle to your parent. Then you wonder what you should charge parent for your 18 months of use of the vehicle of which you paid in $7,200.00 to this point and you are thinking parent should pay you $7,200.00.
Why should parent pay you anything for the use and enjoyment of the vehicle you had for the 18 months? Secondly, the vehicle depreciation was on your watch driving the vehicle off the show floor.
Personally, I think parent would be better off trying to purchase a comparable vehicle from a different source. Parent is getting no deal if you expect everything you paid into the vehicle to this point.
Possibly parent would take over your payments because they may not be eligible for financing, I do not know, but I know if it were my parent because I was extremely close to both, I would not expect a dime from them for my useage and would just have them take over payments, but that is me.
As for the maximum value you could get selling it in for years, I thought you were giving the vehicle to your parent, yet it seems like you are taking the vehicle back after the parent pays off the vehicle?
There is no one that can predict what the value this vehicle will be worth in 4 years. There are far too many variables that can happen in 4 years. You have no idea as to what the mileage will be. You have no idea as to any events that may happen to the vehicle in 4 years. There is no way to predict the economy in 4 years. The car could be totalled in that time. Maybe a catastrophic event such as a safety issue could devalue the vehicle similar to what happened with the Prius years ago. There simply is no way to look into the future 4 years in advance to know what this vehicle will be worth at that time.
As stated, I do not know your situation with your parent, but I do not think it is fair to expect them to pay you $7,200.00 the amount you have paid for the car so far, for the 18 months of use and enjoyment of the car over that time, but it is your car and if your parent thinks they are getting a good deal (which they are not in my opinion) then y'all might as well do it. With this thinking on your part though, then on top of the $7,200.00, you might as well charge for the maintenance costs and the insurance money you paid in as well.
Look, I am not criticizing you, but when you stated you think the parent should pay you what you have paid on the car so far, the deal sounds like a win for you and parent is expected to pay all of your costs on the car from you using it for 18 months and as stated before, parent would possibly be better off buying like kind vehicle for less money from a third party.
My parents were very good to me sacrificing over the years to raise my siblings and myself. I would never had tried to profit from them, but that is m situation.
Think about this. Maybe charge $500 to the parent, not $7,200.00!
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