The Best Time to Sell Your Car

A car is an asset. It literally pays to think of it that way. Let me explain how.

Contrary to popular belief, it often is a better use of your money to sell your car at the right time rather than drive it until it's dead. Yes cars depreciate, but there are better times in a car's life to sell.

I always tell my clients, that while cars depreciate, they don't depreciate at a regular pace. Check out my handy dandy chart below:

A Warranty Has Value
New cars come with a warranty from the manufacturer, usually for 36,000 miles. This warranty gives peace of mind that is worth something to the next buyer of your car. So, if for some reason you do have to get rid of your car early in its life (or are looking for a change), it's best to sell it before the warranty expires. This way you can get maximum value for your car.

Banks Get Picky
Most people require a loan of some sort to buy a car. Banks prefer to give loans on newer cars. Specifically, those with fewer than 100,000 miles. You may find it harder to sell your car once it's past the 100k marker, since your potential car buyer pool will have shrunk to those who don't need bank financing.

I find too many people come to me with a car that has just over 100,000 miles - this hurts them because the car is worth noticeably less thank it would have been if they had just come in six months sooner. While you can still get money for your car, if you are debating selling your car - do it sooner rather than later.

One Last Reason to Part Ways Before 100k
While it's nice to go without a car payment (trust me, I sympathize) there comes a point when car maintenance can be as (if not more) expensive as a monthly car payment. After a certain point, you are putting more money into your car than it has value - did you ever see that movie "Money Pit"? What's worse is that those expenses come irregularly and the numbers dollar signs can get pretty big when they happen.

In my experience, I've seen it's a less expensive proposition to sell your car while it still has value to others. If you hold on until it's last dying spurt, then you have to finance your new car from scratch instead of applying trade-in dollars toward a new down-payment.