My Worst Investment Ever. Period.

Some of you may know that I am in the process of selling my car. The particular car is a 2005 two door, sporty Scion TC. These cars are very popular among 'youngsters' as they are cheaper than their more luxurious counterparts, yet offer all the same amenities and features that the more expensive cars do. Not to mention that they look good as well. As part of any sales process it's important to come up with a selling price. I've listed mine at $13,250. This value is based on several sources and should be a fair market value that is obtainable. I was quite encouraged to discover during my research that these cars have held their value so well. Another fine Toyota product (scion is a subsidiary of Toyota). Since I'm a finance guy by trade I thought it would be interesting to evaluate the true cost of this 'investment' over its lifetime.

Original purchase price: $19,470.51
Miles Driven: ~26K
Time of ownership: 34 months

I won't go into detail on this post but I did (of course) build a spreadsheet for this analysis. Bottom line, including taxes, interest expense, insurance, gas, plates and registration, depreciation expense, and maintenance this rig has cost me a whopping $17,356 over it's three year life span. Oh, and did I mention that there's still $9,595 left to pay on the note that I obtained when I financed it? Assuming I paid it off today, in cash, the total tab for this hot rod would run $26,951. At most it's worth $13,250, thus a loss of roughly 100%.

Couple of things to consider....I converted the cost number that I came up with into cost per mile driven. It comes to roughly $0.67/mile. Thus, even my meager 4 mile round trip commute to and from the office costs me a cup of tea and a fresh baked raisin cookie at Mugs.

Secondly, a large portion (37%) of the cost figure presented above is solely attributed to depreciation (mind you, that this is on a car that was voted one of the least depreciating cars in 2007 by Auto trend). Thus, as consumers, wouldn't it make sense for us to focus more heavily on that component when we're making our purchases? Looks like we just dealt another blow to Detroit.

Lastly, I use to own an entire fleet of vehicles at one point in my life; several small Toyota pick-ups and an old International Harvester Scout Rally II (all at the same time). That was at a time in my life when my average annual income was around $12,000. All of them were insured, all of them ran. The cost of all of those, including the gas for the scout, wouldn't have come within a bumpers width of the cost of the 'off the lot' little gray sports car that I'm trying to sell today.

Anyone have a scout for sale?