The right time to say goodbye may be after just a year of ownership.
Everything you need to know about selling your car online
Below is an easy way to determine how valuable your car is.
The problem has been resolved
- A new car could lose more than 20% of its original value in just one year due to depreciation.
- Five years after ownership, the new car could lose 60% of its original value.
- A well-maintained vehicle has the most chance of retaining value.
The sale or transaction of a car can greatly contribute to the purchase of a new vehicle. The question is, when is the best time to trade or sell your car?
Value retention and depreciation are heavily dependent on the age and mileage of the vehicle. If you are considering removing a car, truck or SUV, the best time to take advantage of its resale value is within the first few years of ownership.
The best time to sell or trade on a vehicle
According to Lendingtree, an online lending market, in a year, the new car will lose about 20% of its value. After five years, we lose almost 60% of its value.
If you pay $32,000 for a car, truck or SUV in 2020, its fair market value could be just around $12,800 after five years of depreciation. If you pay the same amount to a car in 2024, its fair market value could approach $25,600. If you want to get the biggest money or trade-in value for your vehicle, the first year of ownership is the ideal time to consider making a change.
When will a car lose its most value?
Waiting for a vehicle to be sold or traded after five years of ownership, or accumulating thousands of miles, can destroy the vehicle’s resale value. The newer the vehicle, the more valuable it is (assuming there is an average mileage for age). According to the Kelley Blue Book, the average driver travels around 14,489 miles a year as of 2022. A five-year-old vehicle accumulates approximately 72,445 miles based on its average annual mileage estimate. This is relatively expensive for used cars.
A vehicle that earns more than 10,000 miles can easily lose more than 60% of its original value. So, if you own an older vehicle that has earned significant mileage, it may be worth keeping it in lieu of a sale or transaction. Moreover, just because your car, truck or SUV is depreciated so badly does not mean you are not worth it as a daily driver. A well-maintained vehicle that exceeds 100,000 miles can last for years without encountering major mechanical issues.
How to get the most value from a used car
If you’re going to sell or trade your vehicle past that prime, there are steps you can take to get the best amount possible for it. Before setting a purchase price, you can maximize its value by ensuring that your car is in the best possible shape or requesting a transaction estimate.
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What to take before selling or trading your car
- Addresses major mechanical issues
- Make your vehicle professionally detailed
- Restoring as many stock parts (original parts) as possible may result in reduced value
- Use research sites such as Kelley Blue Book to search for fair market value for your vehicle
Few used cars actually value their value over time, so maintenance and repairs are important to keep as much of the original value as possible in your car. Additionally, “A clean car helps car dealers to show that the car is well maintained,” Bankrate said. If you plan to sell or trade a vehicle, the better it is, the more valuable it will be.
