Finding $15k – $20k Liquid for a New Car

It’s (over) time to purchase an updated car. My current beater may be adequate for a gangbanger from the worst part of town, but it certain isn’t appropriate for a serious professional. In the next two months (after taxes are done and I confirm I don’t owe the government all of my money) I’d like to make a purchase of a new (used) vehicle. Based on my research I’ve determined that car will cost about $15k – $20k. I do not want to pay for this with a loan, so instead I’d like to figure out how I can make $15k – $20k liquid from my existing savings and upcoming income. This will be challenging because right now I have $400 in my checking account.

The biggest challenge is not in finding the cash to buy the car outright, but in making up for $20k of lost savings when my goal is to save $50k a year and I’m already behind! This means I’ll be relying a lot on bonuses this year (which I hate doing since they’re not a sure thing) and/or needing to look for second income opportunities. Regardless, I need to buy a car. I don’t need to buy a $20,000 car (and I probably shouldn’t with my sky-high SR-22 insurance costs), but I wanted to figure out how I could potentially access $20k by May 1 to make the purchase. I can work backwards and scale downwards in my car purchase price from there.

Goal: Buy a $15k – $20k Car in May with Cash
(below details a plan to have ~$17k liquid by May 1) 

*NOTE: The objective will be to find a car I like for a good value under $15,000. With tax, I’d like the car to be no more than $15k. However, I need to prepare for a $20k purchase based on my list of potential cars and their models/options (see below the fold.)

1. Sell Shares Currently in the Red at a Loss
(Total Proceeds $3888.95 /19%)

$3,445.67 – sell INTC shares
$443.28 – sell MSFT shares

2. Income & Existing Sources
(Total Proceeds $5100 / 25%)
$2000 – Est Bonus After Tax
$300 – State Tax Refund TBD
$1000 – March Income Savings
$1000 – April Income Savings
$800 – Savings Account

3.  Options
(Total Potential Proceeds $9000 /45%)

Put 401k Savings on Hold ($1000 extra per month x 2 / 10%)
Sell 15% of AAPL Stock (~$7000/ 36%)
Live Extremely Frugally in March/April (extra $1k? / 5%)

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7 comments

  1. hereverycentcounts ( User Karma: 0 ) says:

    I know. I currently drive a Toyota Camry which I bought 6 years old with 113k miles on it, I’m at about 200k now. I’d like something a little nicer. I know I don’t need it. But I figure I’m not going to buy a new car for $25k, I’ll buy a used, slightly nicer than basic car for $15k – $20k. Yes I can get one for $12k, but if I’m going to have this car for the next 10 years, and if it’s my last car before kids/family, I want it to be one that I like. That said, I may still end up with the $12k camry… I’m not decided yet.

  2. Just curious – have you looked at financing options? A lot of places out there are offering 0-1% interest rates at the moment. You could sell your “in the red” shares an take the tax break from your capital losses there, while having plenty for a sizeable down payment, then finance the rest locking in some super low interest rates.

    Of course, I say this having paid off our car loan last week (but that was sitting at 4% and it bothered me to be paying that much in interest on something that was depreciating).

    1. hereverycentcounts ( User Karma: 0 ) says:

      I haven’t found the 0-1% interest rates yet — are those all for “new” cars? I find that buying from a private party still ends up cheaper, so I’d rather buy from a private party with cash then used from a dealer at a low rate. That said, it might make sense to get a certified preowned car at 0-1% if that’s possible. Where would I find that?

      1. 0-1% are rates in the radio ads for dealerships around here. Could be promo rates, but worth calling.

        Just checked – our credit union’s best rate is currently 1.49% for a 3year loan. http://www.psecu.com/rates/?WT.ac=rates-topnav
        They structure their loans so you can use them anywhere – private seller, dealership, used car lot, whatever. You just need to have what you’re financing be under KBB to qualify for the best rates.

        You would have to be a member to get that rate, but I’d be willing to bet there are CUs near you that have similar rates and you would be eligible to join and get. As for PSECU, membership eligibility is pretty broad – if you have any family living in PA, you’re probably eligible.

        Hope that helps!

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