This online feature may include questions adapted from my weekly live chat. It’s also an opportunity for me to answer questions I couldn’t get to during the discussion. I may also respond to questions you send by e-mail to firstname.lastname@example.org, Twitter (@SingletaryM) or Facebook.
The following question came to me via e-mail and addresses an issue I get asked to weigh in on a lot: When is it time to let go of an old car?
Q: My husband and I recently moved to another state and made the mistake of not registering my husband’s car within 30 days of moving. We had family visit us, and we moved his car to the street so our visitors could park in his spot. His car was towed because it had expired tags and was parked on a city street. His car is currently stuck in a tow lot. We have to register it, pay a fine and pay an impounding cost before we can get it out.
We are having trouble registering it because it has a salvage title (it was totaled several years ago and my husband repaired it). To register it, we need to pay an inspector to come look at it in the tow yard and have the title transferred. This will take several days, and the tow yard is charging us extra fees daily. The car is 16 years old and has 200,000 miles. It runs great, but at this point the fines and fees are going to be about what the car is worth. We estimate that it will take about $600 to get it back.
My husband uses it but doesn’t depend on it to get to work. We like having it as a backup to my car, which is also older and has high mileage. We are wondering if we should abandon the car in the tow yard. If we did, we would muddle through with one car. We would miss it, but could probably get by without it. We are currently focusing on building our emergency fund and paying down student loans, so we would not replace it. We hate to give it up, but we don’t know if it’s worth the money to get it back. What do you think we should do?
Singletary: I would pay the $600 to get the car out of the impound lot. And here’s why: You have a car that works and that’s worth more than the $600 resale value. What if your other car needs to go into the shop or breaks down? If you get this car out of the impound lot, you’ll still have a workable vehicle -- and, by your description, a pretty good one — so you wouldn’t need to spend for a rental. Your second car is older, too, with high mileage. So there’s a chance that car may need to be put out to pasture, and you’d still have the car you rescued from the impound lot.
But let’s say your second car holds up well for years to come. Let’s say that you really don’t want or don’t feel you need the car in the impound lot. Certainly you could use the $600 you would have paid to keep the car to pay down debt or put into an emergency fund. However, there’s a larger good I would like you to consider. You could pay to rescue the car and then donate it to a charity. That way you could at least get the tax break for the donation and you’d help someone who needs reliable transportation.
You could also give the car to a relative. That’s what my husband and I do when we are ready to purchase another car. We fix up our used vehicle to make sure it’s reliable and safe and give it to a relative. We never trade in or sell our old cars. We give them away to a family member in need.
When it comes to an old car, especially one that still runs well, look at more than just the book value. This car has a lot of value beyond that.
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