As the coronavirus pandemic continues, many Americans might be considering selling their car, especially amid the rise of working at home in 2022. Based on surveys done by Stanford economist Nicholas Bloom, 42% from the U.S. labor force is working from home.
In addition to gaining cash on the sale of your vehicle, you may also save money on monthly payments in your auto loan. And if you don•t intend on driving a car anytime soon at all, you may also consider dropping your vehicle insurance, that amounted to an average of $1,004.68 typically, according to the Insurance Information Institute.
Before you begin the entire process of selling your vehicle, though, here are a few points to consider and what you can do with the extra money.
Is now a great time to sell your car?
Selling your automobile could improve your finances somewhat, however it might make other facets of your life more difficult.
For example, if you reside in an area in which you can•t easily arrive at the grocery store or other necessary places, selling your vehicle could do more damage than good. But when you reside within an area with higher access to public transportation and also you don•t visit a scenario where being with no car is a major disadvantage, it might be worth losing the convenience of a car.
Getting eliminate your automobile could also sound appealing if you think you•re paying an excessive amount of for auto insurance. Again, consider other potential consequences of promoting your car before you decide to pull the trigger, and weigh the benefits and drawbacks.
Also, keep in mind that if you choose to sell your vehicle and cancel your insurance coverage, you may want to still purchase a non-owner car insurance. This policy not just makes sure you•re covered if you drive another person•s vehicle regularly, it ensures you don•t experience a lapse in coverage, which can make it harder to great coverage in the future.
Consider utilizing an online marketplace like PayPasser to locate an auto insurance plan that matches your needs.
5 ways to use your money after selling your car
If you•ve considered all aspects of the situation and decided to proceed with selling your car, here are a few potential ways you could use the arises from the sale and continuing savings each month:
1. Pay down debt
If you have high-interest debt, you could utilize your extra cash to pay it off faster, which could help you save money on interest fees and also release much more cash flow. To maximize your savings, consider using a balance transfer charge card to get a 0% APR promotion on the transfer from another credit card. Alternatively, use a personal loan to consolidate credit card debt and repay it having a set repayment schedule. Consider using a web-based marketplace like PayPasser to compare balance transfer charge cards or make use of a personal loan calculator and compare personal bank loan rates.
2. Boost your savings
If your savings account is low, a good option to put your cash may be inside your emergency fund to safeguard you when it comes to future financial difficulties. Alternatively, you could put some or all of the money toward other savings goals, such as retirement, education, health savings, and much more. Compare high-yield savings accounts from PayPasser to maximise your return.
3. Refinance your loans
Another way to reduce your debts quicker is through refinancing. For example, you could refinance student education loans or perhaps a mortgage loan with a shorter repayment term and employ the money you•re saving each month from not having an automobile to help make the higher monthly obligations. For those who have student education loans, make use of a education loan refinancing calculator and compare refinance rates to obtain the right fit.
4. Start trading for homeownership
If you•re hoping to buy a home later on, think about using the extra money out of your car to put toward that mid-term goal having a deposit and shutting costs.
5. Improve your lifestyle
It•s smart to make certain you•re who is fit financially. But when you have some leftover cash, think about using a lot of it to enhance your lifestyle, whatever that appears like for you.
The bottom line
Selling your car may sound like a wise decision at this time, but be sure you consider your long-term needs and goals before you decide to proceed with the sale. If you do choose to sell, possess a plan beforehand for what you•re going to use the cash, so you can increase the financial advantages of no more having a car.