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I've written before about selling my car when I pondered the idea that a paid-for vehicle could be sold for quick cash in an emergency situation. While this would not be as ideal as having the same amount in cash, that isn't always a reality for everyone.

Because my family and I will be moving in a few months – likely to a place with parking limitations – I am again thinking about selling a car and becoming a one-vehicle family.

The first question is, which vehicle stays?

We have two paid-for vehicles: a 2005 Chevy Cobalt and a 2008 Ford Escape. The small sedan has 130,000 miles on it, while the SUV has a few less. The older car is beginning to enter the darkness of old age. I just replaced all four knees and I need to put in a new A/C. The Ford seems to be okay.

Since we are moving to an urban area, we will likely have to rent parking spots in a garage or lot, but because we are moving to an urban area, I can take public transit to work every day. This means that for the first time in 16 years, since I started driving, I won't need a car.

But that still leaves the original question: which vehicle stays?

The small car has the advantage of greater fuel efficiency and is easier to park in tight places. But it was a base model when I bought it, meaning it lacks some features like cruise control. I drive it 400 miles a week now and believe me, my right hip aches from pressing that gas pedal to the floor. Which brings up another problem – it's losing any semblance of pep, and the acceleration is becoming weak. This is not what you want when you are getting dumped from an on-ramp going 30 mph into four lanes of 65 mph. With that being said, I must mention that the car has never had any engine trouble or malfunction, it's just doing what engines do when the body falls apart around it.

The Ford Escape has the advantage of being younger and it still can accelerate rapidly if floored. And it has air conditioning, and cruise control! It has a taller cabin so the kids, well one of them, can stand up. It's not much bigger than the car so it could still be parked most places, though it is not as easy to see what you are doing when you are parking.

Comparing them side by side, each car has its pros and cons for where we are going to live. But the Ford Escape has the potential to last longer, and doesn't face repair needs totaling almost $1,000 like the Chevy. I believe that the Chevy will be easier to sell because it has a lower price tag, near $3,500 as compared to $9,000 or so for the truck.

We wouldn't even be in this position if we drove vehicles with upside-down loans. If we were in that scenario, we would have to add another $100/month to our debt load to rent a parking space to keep a payment for something we no longer need. This is how debt traps us and inhibits our freedoms. We even considered including this in our debt consolidation plan. Luckily we have lived with paid-for vehicles for more than a year, and that $700/month goes into our pockets.

I've written that an expensive car is the fastest way to get to the poorhouse. We've all seen cars parked in driveways of homes that were barely worth more than the cars. It is one of the few places where Americans collectively agree that we are going to demand and spend more than we need, an Anti Wal-Mart Attitude. People no longer blink at $30,000 loans for cars worth $23,000 as soon as they leave the lot.

The Financial Samurai has posed the 1/10th Rule for Car Buying, offering that your car purchase should be no more than a 10th of your annual salary. If you make $50k, you get a $5k car. This seems a bit tight, but I think it is close. To abide by this, you must accept that cars aren't that cool, and that you will probably never afford a BMW.

Sam's rule does create an interesting dynamic – it forces people to publicly display their income through the car they drive. I'm sure that rich people are getting annoyed that someone making $39k thinks he's a baller driving a Mercedes. It's getting to the point where these cars aren't pure status symbols. The 1/10th Rule would put people in their economic places.

Evil or Asset?

Eight years ago I bought a new car and probably spent almost $25k on it over its lifespan. Same for the other car. That's fifty thousand dollars in lost opportunities. But cars are a part of American freedom, and they allow us to live where we want to live and move by our own choosing. I've never owned a fancy car (unless you count the used Buick Riviera I drove in college that had a moonroof and tan leather), and I don't aspire to.

So if we are moving to a place where cars aren't needed, why not sell both? To be honest, that would be a big step that we aren't ready for yet. Though we could still take the train back home to see family, we'd be completely dependent on family to pick us up and drive us around. I suppose we could rent a car one weekend each month, but that would probably be more expensive than keeping a car in a garage. Plus, with two kids, it's easier to keep them corralled and safely transported in a vehicle when making daily trips to soccer practice, etc.

I guess that makes cars a necessary evil, but I am warming up to them again. Financial God once wrote that he envisions a future where cars are the mass transit solution, and talks about a giant fleet of driverless cars weaving about the thoroughfares of America. This struck me as an interesting picture, and as cars become more efficient. Is supporting something like this a guarantee that high speed rail will never catch on in America?

Sell the Cheap One

So I've decided to sell the cheaper car. It will be an easier sell and leave us with a vehicle that should last a few more years. It is nice to know that if something changes in the next few months, we could sell the one with more value.

One thing that has been bothering me is that I don't have a car replacement fund. I am not setting aside a specific amount each month to save for a new car. Instead I am just saving cash in a general savings account. Maybe I'll just gamble that the Ford Escape will last me until some point in the future where I am more able to do it.

The fact is, driving is a debt that is almost impossible to pay off. Even if you live somewhere that you don't need a car, the cost of living will more than make up for any savings.

If any twentysomethings are reading this, take it from me: a nice car isn't worth it. Resist the urge. Push your junker to the limit. Buy him some new shocks and struts. Change his oil. Save your money.

On a side note I recently saved some money on car insurance and have started creating a list to share that I will continue to expand to help some of our visitors save also.