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Repair or Sell a Wrecked Vehicle

05.01.2012 by Matt Jabs //

The Question:

DFA reader Sara asked:

My car was just in the shop and likely will start needing maintenance due to its mileage and age. If I don’t fix the vehicle can it be sold as is, and how do I figure the trade-in value of post-accident repaired vehicle?

It’s a 2004 Lexus RX 300, with 120,000 miles. My deductible cost for the $7,700 repair cost is $1,000. The car is paid for free and clear. The private party Kelly blue book on this car in” good” condition is $13,000, the trade in price in ”fair” condition is $9,000.

Should I have the car repaired or take the $6,600 from the insurance company for use as a downpayment on another pre-owned certified Lexus?

The Answer:

Hi Sara, thanks for your question.

As I see it you have a couple options:

  1. take the $6,600 in insurance money, sell the vehicle as is, and put the money toward a new car.
  2. repair the vehicle using the insurance money and continue driving (or sell) it.

Let’s compare the two:

Do Not Repair The Vehicle

Before considering this option you need to see if your insurance company writes check to you or the vehicle repair company.

If they address the check to you, you can cash and use it how you like. If not, you’ll have to skip to option two – repair the car to keep or sell.

If they write the check to you you’re free to put the money toward another vehicle. If you can do this I recommend figuring out your selling options for the wrecked vehicle so you can best decide how much money and trouble going this route will be.

If the combined total of insurance money and proceeds from selling or trading in a wrecked vehicle are less than the total for selling a repaired vehicle, you should repair it.

Your options for selling a wrecked vehicle are limited. You can trade it in, call a salvage yard, or put it up for sale on Craigslist and other similar publications. Either way you’ll be disappointed in the price these markets bring, and I’m guessing none will not exceed $1,000. Added to your $6,600 this gives you between $7,000 and $7,500 for the wrecked vehicle.

Now let’s consider fixing it.

Repair The Vehicle

If you use the insurance money to fix the car you can keep it or sell it.

If the repair is complete and done well the KBB value isn’t really affected. However, if the buyers perform a title search (carfax), or you tell them about the accident as an honest seller, which I recommend, you’ll have to adjust the asking price a bit but not much since it’s in excellent working order. I recommend following the golden rule of doing unto others as you would have done unto you (see Matthew 7:12).

Repairing the car will cost you $1,000.

When it’s all said and done can you buy another vehicle for less than $1,000? Probably not, which is why I recommend you fix the vehicle and continue driving it.

Another solid option is to fix it and sell it for KBB value. This will give you a sum of money suitable to purchase another solid vehicle, but to me that’s a lot of unnecessary trouble.

Conclusion

I recommend you fix the car and continue driving it. Your second option is to fix it, sell it, and use the proceeds toward a new vehicle. Your least attractive option is to leave the vehicle wrecked while trying to sell it as is to add to the insurance money (if that’s even possible to get in your name).

Good luck, God bless, and let us know what you decide.

*******

Do you have a finance question?

Ask us about it.

Categories // Spending Tags // vehicles

Homemade Ultralight Backpacking Water Filter

04.26.2012 by Matt Jabs //

This is a photo essay of the homemade ultralight backpacking water filter I use.

Use What You Need

Don’t waste your breath telling me this filter isn’t enough for me – or anyone else choosing to use it – and we won’t tell you your over compensating for water filtration.

It’s a free country so leave everyone to use the filter of their choice.

I’m not a water expert so only take my advice if you’re confident it will serve your needs.

Step 1

Get a 1 Micron Singed Polyester 7″ x 16″ Filter Bag Felt Biodiesel Sock Size 1, open the sock into a  flat piece of cloth, draw as many 8″ circles as you can (we fit four 8″ and one 7″), and cut them out.

Step 2

Fold them into quarters and glue the seam (I use a hot glue gun).

Step 3

Create a protective sleeve to store your filter.

These biodiesel socks will catch a lot of dirt and natural material when you lay them on the ground. To combat this I sewed fiberglass screen material to fit over the filter as protection.

You don’t have to make this cover, but it helps keep the outside of your filter clean.

Step 4

Put it all together and give a few to your cheapskate, ultralight backpacking friends!

Enjoy!

Save Money

Effective water filtration at a fraction of the price.

What are your money saving tips for ultralight backpacking?

*******

Resources

  • OA Guide to Water Purification on Princeton.edu
  • Guide to Drinking Water Treatment for Backcountry Use on CDC.gov
  • PDF version of Drinking Water Treatment Methods for Backcountry on CDC.gov

Categories // Simplify Tags // DIY, save

Should I Pay Off Student Loans

04.23.2012 by Matt Jabs //

The Question…

DFA reader Barb asked:

I am 43 years old and have student loan debt of $17,000 after recently going back for my masters. We have $20,000 saved in a money market account. My husband is 44 and currently has $10,000 in student loans currently in deferment. He will graduate next spring. The minimum payment for my loan is $125/month and the interest rate is 6.4%.

How much of the money market savings (which we use as our emergency fund) should we use to pay off the student loan?

The Answer…

Great question Barb, let’s take a look!

  1. You have a total of $27,000 in student loan debt. Since we don’t know your husbands loan rates we’ll just assume they’re the same as yours – 6.4%.
  2. You have $20,000 saved in a money market account for emergencies; it is probably earning you around 1% interest.

Now we’ll discuss your options as I see them, and I will assume you have no other consumer debt since you didn’t list it.

God Will Provide

If you’re inclined to believe in God and His Word then you can trust what He said:

“Therefore take no thought, saying, What shall we eat? or, What shall we drink? or, Wherewithal shall we be clothed? (For after all these things do the Gentiles seek:) for your heavenly Father knoweth that ye have need of all these things. But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you.” Matthew 6:31-33

He promised to provide. When we believe Him he counts it as righteousness.

Emergency Fund

How much should you have saved for emergencies while in debt?

That is the million dollar question, and there is no one correct answer.

A popular strategy is to save only $1,000 and use the rest to pay off debt. Another option is to save enough for 1 – 3 months expenses. Betsy and I chose the latter, but everyone needs to make their own decision based on comfort levels, work situation, etc.

I recommend you go somewhere in the middle.

If your income is somewhat secure, save enough for one month’s expenses (let’s assume that is around $3,000) and use the rest to pay off debt.

This leaves you enough to pay off your student loans while still providing a level of emergency security.

Student Loans

As mentioned above, paying off your student loan frees us the $125 each month.

You now have options.

  1. Continue saving the $125 into the emergency fund.
  2. Take your husbands loans out of deferment and begin paying them off.

I only recommend deferment in desperate situations, so I would like to see you put it toward his loans.

The sooner you begin repayment, the sooner you’re free of the debt.

In Conclusion

Great job saving the money! Now leverage it to work for you by paying off your debt while saving enough for emergencies.

*******

Categories // Debt, Savings Tags // emergency fund, student loan

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Disclaimer

Content on Debt Free Adventure is for entertainment purposes only. Rates & offers from advertisers shown on this website may change without notice: please visit referenced sites for current information. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise. We respect your privacy. Privacy policy.

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