QuestionHello - Our 2004 Range Rover needs a new Drive Shaft, Differential, etc., 2 months after our 70K mile service. This is our 3rd RR. Main reason? The Tax Depreciation advantage. We are now considering purchase of a Mercedes Sedan and skipping the Tax Depreciation because the offset appears to be 1). Reliability and 2). Resale/equity - We would be upside down if we trade in our RR. Keeping it, and continuing to pay TWO car loans to avoid taking the "trade in bath" seems a bit ludicrous as well. Any thoughts?
AnswerHi Marsha,
Well, I certainly understand the tax depreciation advantage reason, but it sounds like you're now and weighing all of the factors in making your next decision; this is a very good idea.
Ok, let's consider your two options. First, making two payments is, using your word--ludicrous. You would be throwing money at something that wouldn't return you any real value.
Now, although being upside down on your loan isn't much better, it at least provides you a way out; how soon depends on how upside down you would be.
Here's an alternate plan to consider. Buy your Mercedes, but sell your RR yourself. Dealers take vehicles on trade at or below wholesale: they plan on making a ton of money when they sell them on their pre-owned lots. By selling your RR yourself you stand to make a lot more money on the deal which, depending on how much you still owe on it, will at least minimize your losses.
Do a little research on one of the many car sites on what the trade-in vs. private seller price would be for your particular model. It takes a little work, but should be more than worth it.
I hope this help you, Marsha.
Regards,
Ron
