Transactions needed for new car purchase without trade-in but later sold old car?

jryan32

I bought a car for $30k from dealer & paid cash. Instead of trading old car in for only $2k, I sold it privately for $5k a couple months later (no outstanding loan).

If I'd have traded the old car, I'd have paid $28k.
Instead, I paid $30k, but then took in $5k…so basically it cost me $25k.

Here's what I've done in Quicken but doesn't seem right:

-In Checking acct I have transaction for check I wrote to dealer for purchase price ($30k) and assigned a new Car asset acct as the category ([New Car Asset]).

-I then sold the old car & entered a Checking deposit of $5k with a category of "Misc Income".
At the same time, I added a Balance Adjustment to the Old Car Asset of $5k to zero it out.
I felt that wasn't right, but it seemed to work.

However, when I print year end Spending vs Budget report, it shows I had Expenses of $30k for the new car, and Income of $5k for the old car. While that could be ok, my budget was $25k and to me that's what I spent…but according to report I'm over budget.

What transaction(s) could/should I add so I see $25k of spending for the new car?

NotACPA

How, in Q, did you carry the value of the old car? Because, it seems to me, that the $5k should have reduced that asset with any balance being written off.

The 2 actions, simply, aren't related. That they were both for cars is immaterial.

q_lurker

You indicated the $5k into checking was categorized as Misc Income. I would have had it as a transfer from the old car asset account with an associated prior balance adjustment setting the old car account value at $5k. With the completion of the transfer, old car account would be at zero.

jryan32

I initially did that but wasn't seeing it reflected in the "Spending vs Budget" reports, which is why I went with "Misc Income". I just discovered I didn't have the asset acct selected for that report though. So now I've changed it as you suggest.
The report still shows the $5k as income, just under "FROM old car asset" instead of "Misc Income".

But the "Expenses" section of "Spending vs Budget" report, "Spending by Year" rpt, and even budget screens all show I had spending of $30k for a car. Which technically is correct I guess as the $5k I took in is considered "Income".

If I'd have traded in the car for $2k, my spending would show $28k only.

Where I'm confused is that to me I "spent" $25k on the car ($30k purchase price minus $5k sale), but the budget & reports show I "spent" $30k…so I'm over budget by $5k…when to me I'm right on budget.

jryan32

I had an Old Car asset acct. It showed a value of $5k, and then when I sold it, I did a manual balance adjustment of $5k (thus zeroing it out).

I have now removed that manual balance adjustment & changed my Checking transaction to have a category "[Old Car asset]" which also zeros it out.

q_lurker

If I'd have traded in the car for $2k, my spending would show $28k only. 

In my view, I see you having spent $30k on the new car. As a trade-in, it would have been $28k cash and $2k transfer from old car account to new car account. As done, it was $30k cash. The $5k sale of the old car was, as @NotACPA said, a separate event. If you sold $5k of stocks or your grandfather’s antique pocket watch to replenish your checking account, would you say you spent less on the new car?

NotACPA

" I see you having spent $30k on the new car. As a trade-in, it would have been $28k cash and $2k transfer from old car account to new car account. "

Concur

NotACPA

And you didn't see that $5K transfer as Income, because transfers AREN'T income. Income makes you wealthier (higher Net Worth, just as Expenses make you poorer). Your transfer merely moved $5k of value from one account to another … just as moving your wallet from one pocket to another doesn't change your net worth.

You can use a Cash Flow report to see how the transfers impacted your ability to spend … minus $30k for the purchase of the new car and plus $5k for the sale of the old.