Sell, Lease, Rent or Kill: 2000 Hyundai Elantra Wagon
Boring. Small. The automotive equivalent of an advanced econ class. That’s pretty much what a 2000 Elantra Wagon was in the auction world back in 07’. You know that the automotive fashionistas won’t be knocking on your door… and three years ago you wouldn’t get much more than the extraordinarily cheap and chancy taking another glance at it. Hyundai still suffered from the stigma that came with making second-rate cars in a world where sub-prime buyers could buy far better vehicles with a pulse and a paycheck. To put it kindly, this one was a tough sell.
If I sold it, the price would be $2995. It had around 130k and no serious defects. The tires were Wal-Mart cheap and the back seat was obviously used for carting small kids along given the fabric indents. This had been one what I referred to as a ‘Barney’ vehicle. A young family transporter since day one. There had been no stains on the carpet or seats. Not even the faintest scent of typical baby ordeals, and so I was pretty sure that the prior owner took care of it fairly well. I had bought it at a Carmax auction for $1800 plus fee, and so I was looking at around $1000 profit overall if someone could look past the name and the unpopular wagon configuration.
If I financed it, the price would have been $700 down and $60 a week for 15 months. Thankfully, I was not anywhere near the finance business at this point in my life. Dealing in cash made me ten times happier and less stressed, and the supply of good cheap cars was still quite plentiful at the sales. As a loan ranger in this business, I sold over 150 vehicles that year and still had time to do a few auctions and annoy Robert Farago. Did I mention I was a strident dissident back in the day?
The finance arrangement may have the best mathematics. But it’s a pain to stay on top of people. Emergencies happen in life and I have never penalized folks for being late so long as I get called. But then you have the 10% or so who think that they should be given every entitlement without so much as a thank you.
The rude people. The passive aggressive. The ones who just don’t feel like paying after they have moved and/or disconnected their phone. You also deal with people who seem to suffer from every affliction; from hemorrhoids to hurricanes. There are times when I think the best thing to do is the ‘2 and 2’. Miss two payments with no contact, and the car gets picked up, and they can start over again with their own two feet. More than a few of these cars get abused by their abusive-oriented owners and as much as I would like to help, I just can’t respect folks who have no respect for my property.
Rental? That may be the best avenue as well. But back then I wasn’t playing in that world. Several Hyundai models had a reputation for having transmission issues at about the 100k to 120k mark, and the powertrains weren’t considered to be anywhere near robust. I would have likely spent several hundreds on maintenance just so I could avoid those issues. Actually, I would have just not rented at all. Rentals have an even bigger variance of quality customers than finance deals, and back then I had ‘philosophical issues’ with financing.
Like the Chrysler LHS, this one was bought for $1000. A red, automatic 4 door model with power nothing and an aftermarket radio system. Florida, land of a million rentals was flooded with these vehicles ten years ago, and why not? It is an honest and decent piece of transportation that can go well north of 200k with proper maintenance. This particular one was bought at 150k with no paint fade on it. A very surprising plus for a car from Hotlanta. But the rear seat cushion has the usual ‘smile curl’ where the ends peak upwards due to excess sun exposure and let’s face it… this one is a parts bin special.
If I sell this vehicle I will probably get around $1800. Maybe $2000 to $2200 if I save it for tax season which comes in a couple months. A good version of these vehicles is often swarmed on Craigslist and Autotrader with hundreds of others that were abused to varying degrees. Cheap tires, cheap oil, and not so cheap financing arrangements for sub-prime finance customers are ‘the life’ for many of these sleds. This better kept version represents an unwanted rarity for the cash buyer. Many will test drive a couple of dogs and just give up on the idea of buying one. A wealthier or more credit worthy person will typically consider the far nicer competition that has a price premium to match it. But still an $1800 price represents a very healthy profit with little effort.
Renting this vehicle may be the best choice. I had a 1998 Pontiac Sunfire that had been financed a few months back. Although the parent was supposed to be the driver of the car, it was obvious that the 16 year old son became it’s owner with predictable results. An overdose of street racing, Lucas additives and non-certified oils blew the motor. I took the vehicle back and found a wrecked donor car with a good engine and transmission for $350. The Sunfire was fixed and since then it has seen consistent rental duty for the last several months and 7,000 miles. I have plenty of spare parts for the Cavalier should I choose to keep it.
Financing this vehicle would likely yield $500 down and $50 a week for anywhere from 50 weeks to 15 months. Economical vehicles have a red hot demand at the moment and if the cost of gas spikes past $3.50 next summer, you may likely see these vehicles come within a hair lick of a Crown Vic’s profit at the buy-here pay-here lots. The Ford may be far more durable. But the Cavalier is cheap and when a big chunk of a working person’s pay stub goes toward the gas pump, the gas guzzler gets replaced. I get several tons worth of trade-in’s during the July/August period from folks looking to better balance their commuting costs. Cavaliers, Sunfires and Saturns go for very good money during those times.
So should I sell it for the quick and easy profit? Rent it for a long-term return? Finance it for the same reason? Maybe a combination of scenarios would be the best way to go. What says you?
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Wait until tax season comes around and dump it on someone looking for a frugal ride. That'll probably be your best bet to get the $1800-$2000 you're asking for.
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