I have a bike that I usually commute with that is worth around $1,500. With poor weather lately, I've had to take the larger car, which of course gets far worse gas mileage. After some reflection, we have been discussing selling the bike to pay towards the debt (which would pay it off faster) and then purchasing a small hatchback for less than $2k after we are debt free, paying cash of course.
So I decided to run some numbers.
Scenario 1: Keep it, continue to commute. Given I ride about 3 out of a 5 day work week due to weather, etc, and my mileage (I won't list all the numbers here), 3 days with the bike and 2 days with the car will cost - assuming $3.00 a gallon - about $575/yr in gasoline. However my wife and I often carpool to work, maybe twice a week.
Scenario 1a: Keep the bike, continue to commute 3 days a week, carpool 2 days a week. Now my gas only costs $172/yr.
Scenario 2: Sell it, commute with car only. Sell the bike, it goes into the debt. $1,500 is taken from the sale. This will cost $1008/yr in gas. So my net from the sale of the bike is only $492. But often my wife and I share a ride to work, because we work fairly close to one another and depending on when we need to be there, we'll drive there and home together. Lately we've been doing that 2 times a week.
Scenario 2a: Sell it, commute with car, carpool twice a week. Total cost in gas for me is now $604/yr, compared to the other carpooling option which was $172 that's a difference of $432.
This doesn't include maintenance on the bike and other associated costs that are a little pricey. If I take scenario 2a, I still end up with about $1,000 extra that has gone into the debt after a year. By that time our debt will be well paid off (we're currently projecting a payoff date of April, 2008) and we will be starting on building our savings goal of $33k by the end of 2009. Of course, the bike will probably be sold anyway after the debts are repaid and replaced with a hatchback for commuting.
The bike will probably go on sale this weekend. Or am I missing another option?