Unless your car is an intricate part of your adventure, such a road trip, then the answer is most likely, yes, you should sell your car.
We can all get attached to our cars. I certainly have loved two trucks in my life. However, even if you’re car is your baby or you had your baby in the front seat, the best financial decision is likely to sell it.
Here are the reasons why you should sell your car.
Car payment – If you have a car payment, then you don’t want to take that debt on the road. Sell the car, and pay off the difference if needed. In fact, you should look to get rid of all of your consumer debt before you travel.
Cars cost money to store – If you are traveling without your car, you’ll need to store it somewhere. Perhaps you can stash it for free in a friend’s or your parents’ driveway, but if not you’ll need to pay to store it somewhere. Storing a car could cost you $5o per month at a cheap mini-storage.
Cars depreciate in value – Even if you don’t have a car payment and can store your car for free, you’re car is worth more today than it will be in a year or two. With the exception of some classics, cars depreciate in value over time. If you hold onto the car, you are losing money. Instead, sell the car and invest that money into an investment that earns money, even a low yield savings account is better than keeping your money in a losing asset.
Cars cost money to own – Though you may not be putting gas in the tank, you may be obligated to pay annual fees for registration tags, plates, and insurance. Maybe you can avoid these annual registration fees by turning in the plates, but you’d have to purchase new plates when you’re ready to drive again. Depending on your local tax code, you will pay property tax whether you drive the car or not.
Cars deteriorate when not driven – Even though you aren’t putting miles on your car, a dormant car and engine can lead to major mechanical issues. Sensitive moving parts within the engine can seize. Oil can turn to corrosive sludge. Tires can rot. Leaving your car to sit for a year or two is not the same as preserving it. It is highly likely that you will have problems when you return to start your car again.
You can buy a better car when you return – If you keep your car, it will be older, worth less, and potentially more prone to problems when you return. If you sell now and put the money into a savings account or perhaps into an investment that grows your money while you travel, then when you can return you can likely purchase a new, better car with a sharp eye for a deal.
Bonus tip: Your lifestyle could change – You don’t necessarily know that you will need your car when you return. If you travel for a year or more, it is likely that your perspective and habits involving consumption will change. When you return, you might find that you relocate to an area where you don’t need your car. You might increase reliance on public transportation. Or perhaps start cycling. Don’t bet on being the same person with the same habits when you return.
No compelling financial reason to keep your car while traveling
If you want to keep it because of sentimental value or you’re fine with losing money, then I suppose you could keep the car.
Aside from some rare exception in which you own a classic car that is appreciating in value, I don’t see a compelling financial reason to keep your car.
Getting cash for the car now is the best financial option.
If you’ve got a great reason why keeping the car is a good idea or more reasons why it’s a bad idea, let our readers know in the comments.
Updated 2022: Selling the Car and the Boat
Since we returned from our adventure in 2016, we acquired new cars and a large fishing boat. Heading into our 2022 adventure, my logic from 2016 for selling the car before our RV adventure still holds, and now it applies to the very emotional decision to also sell my prized boat.
When we move to Chile, we are going to have to purchase a car while we are living there for a year. To fund that car purchase, we are going to sell my wife’s (Katie’s) 2020 Volvo XC90. It’s a pretty car, and she deserved it when we bought it, having driven around the same 2007 Chevy Tahoe we used to tow the Airstream around America.
When my 1996 Chevy Suburban finally bit the dust after an unfortunate 4-wheeling accident, I assumed the 07 Tahoe as a daily driver and we upgraded Katie. We’ll sell the Volvo (hopefully for a gain given the used car market in the pandemic), and we’ll keep the low value Tahoe beater around so we have transportation when we return form Chile. Upon return, we’ll purchase a new-used car for Katie (hopefully at a lower prices if the used car market cools).
It is unfortunate in an emotional sense that my logic to sell the car before an adventure also applies to my boat. I’ve waited my entire working life to purchase a boat, waiting until finances were especially strong to allow me to get into one of my passions, offshore fishing. But logic does win out over emotion, and it makes complete financial and practical sense to sell the boat now.
If the boat were allowed to sit dormant for a year, it would likely deteriorate in condition and lost value. Also, insurance is wickedly expensive. On top of that, I don’t want to be wondering if a hurricane in the forecast is going to sweep away the boat when I’m living on the other side of the globe. The boat has to go. I’ll invest the cash from the boat in a real estate deal, and in a few years, when that real estate deal comes full cycle, I’ll be back in the offshore fishing hobby (hopefully).