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The average person spends 4.3 years in their car! Purchasing a new car is a serious life decision, as is deciding to part ways with a trusted vehicle. Not only is this an important endeavor, but there are serious financial considerations to take into account as well. If you were shopping for a car in 2022, you may have noticed new car prices had soared and are around 9.2% more expensive than in 2021. Recently, newer car prices have been lower than they have been in the past year for 3 consecutive months. When it comes to selling your car, there are a myriad of options available. Some consumers may choose to sell their car privately, trade in their vehicle, and put the money down as a down payment on a new car or sell their car to a dealership.
If you are considering purchasing a new vehicle, one of the foremost thoughts on your mind is likely, “Is now a good time to sell my car?” If you are debating selling your vehicle, there are a few items to keep in mind and consider before making any moves:
Consider the current mileage on your odometer. While you can technically sell your car at any mileage, the value of what you will get for your car greatly diminishes after your car hits 60,000 miles. There are several reasons for this. One of the foremost reasons is most manufacturers' powertrain warranties expire at around 60,000. After 60,000, the money that you will spend on replacement parts, or the amount that any dealership will give you based on this, decreases. For your own knowledge, it is important to reflect on the type of mileage that you have on your car. City miles cause more wear and tear on your vehicle than highway mileage. Think about the type of driving you do most often and what your commute to work looks like.
Before selling, it is a good idea to review your finances and see how much you still owe on your car. If you still owe money on your car, you will want to take into account that your current loan must be paid off before you can reap any profit from the sale of your vehicle. This includes your original financing as well as any title loan you may have taken out on it.
Timing is everything! It is a good idea to sell your car before the new year’s model debuts. Once that happens, your car is just another year older and looking dull next to the new shiny penny of a new car model. In addition, think about the season. Most people tend to want to purchase a car in the summer or spring, ahead of any summer travel, road trips, or vacations. Especially if you live in a climate with harsh winters, no one wants to have snow and sleet all over their new car! Along with the season, you want to consider your own personal timing as well. A tried and true tip is to sell your car when you want to, not when you need to. If you wait until you are in a situation where you must sell your car, you do not have the luxury of waiting for the best deal. By planning ahead and selling before you need to, you have the power to be picky.
As a result of the pandemic and supply shortages, new car inventory has hit an all-time low in the past few years. However, new car inventory is rising in 2024. While low inventory can make purchasing a new vehicle difficult, this is a favorable situation for those looking to sell their vehicles. Although inventory is slowly rising, the current market is still at a historical low.
While interest rates don’t have a huge impact on the selling of your vehicle, you will want to take this into consideration when purchasing a new car. Make sure you are in a financial situation to afford the current trend of interest rates. Recently, the interest rates on the average car loan reached close to 10% - a historical high! Consider how much you will make from the sale of your new car and if you can handle the payment (with interest!) on a new vehicle.
There are many important factors to consider when selling your car! This important life transaction needs to align with not only the market and condition of your vehicle, but with your own personal life goals and finances in mind as well.
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