You may not know, but there is a right time to trade in or sell your car, just as there is a suitable time for you to purchase a vehicle. CarSmart can help you understand the intricacies of how to get the most value for your car. There are numerous factors to consider that affect trade-in and resell values. Exploring a few of these factors may help you prepare as you decide to trade in or sell your current vehicle.
Used Vehicle Mileage and Age
Image via Flickr under CC BY 2.0 by Crown Star Images
Mileage has always been considered a significant factor when determining your car's trade-in or resale value, but it may not be as pertinent today as it has been in the past. As a rule of thumb, your car's value drops slightly with every 10,000 miles, but there is no set mileage milestone where your vehicle's value will plummet.
When you have babied your vehicle with routine maintenance, exterior upkeep, and interior cleanliness, even the dreaded 100,000 mileage mark isn't as bad as you may think. Moreover, dealers have plenty of low mileage used vehicle options due to end-of-lease agreements, so they aren't exactly hurting for used vehicles with low mileage.
The age of your vehicle is more important than the mileage in today's world of reliable cars. If your vehicle is just a few years old, it may retain up to 70% of its total value, regardless of the miles you have put on it. However, once your vehicle gets past five years of age, it will have lost significant value no matter if you babied it or not.
If your car is in great shape, it will still hold a good bit of value for you to use as a trade-in or to sell. Dealers are more likely to resell older cars quicker than a new car, but older vehicles' trade-in values are substantially lower than a newer car, truck, or SUV. So if you intend to trade in your car, keep an eye on its age and be prepared to part with it before the five-year mark.
Is There a Best Time of Year or Month to Trade In?
Even though there's no easy answer to this question, the first two quarters of the year are more suited for trade-ins. There are more car buyers in the market in the first half of the year than in the second half. There is more demand for vehicles when there are more buyers, which can benefit you when trading in or selling your car. During the first half of the year, dealers will need a steady supply of quality used vehicles to meet the demand, and you can often get top-dollar for your trade-in.
Some buyers tend to focus on trading in their vehicles around holidays when special financing, discounts, and clearances are in effect, but trade-in values may not be at their highest during these types of events. When you make the decision to trade in or sell your vehicle, stick to the first two quarters of the year and get more money for your car. When you are ready to make a deal, visit one of CarSmart's convenient locations in Farmington, Missouri.
Best Time to Trade In a Vehicle With a Loan
If you still owe on your vehicle, the best time to trade it in is a decision that only you can make, but you will want to reach a certain point in the loan before this decision. The worst time to trade in while still owing on your vehicle is when you owe more than your car is worth. When you do this, you will become trapped in a vicious cycle where you can't seem to get a vehicle paid down or off. This is considered as being upside-down in a loan, and it can become a nightmare.
You can avoid this scenario by being diligent and seeking information regarding your loan from your creditor. For example, when you have a loan on your car and are considering trading it in, you will want to contact your creditor for the current payoff of the loan. You can then compare the payoff figure to the estimated value of your car when trading it in. If the value comes out to be more than what you still owe, you are in the green and can safely trade in without fear of becoming upside-down.
Do Certain Vehicles Hold Their Value Better Than Others?
There are no rock-solid statistics that can attest to what vehicles will hold their value better than others, but there are trends that you can follow. These trends have shown that specific cars such as SUVs retain their value better than sedans. When comparing brands, Toyota has the two vehicles that hold the most residual value: the Toyota Tacoma and the Toyota Tundra. You can just about bet that specialized cars such as Mercedes-Benz sports cars or the Ford F-150 Raptor maintain more value than most.
Other popular vehicles such as the Toyota RAV4 and Honda CR-V tend to present more value as they age than many other comparable vehicles. Factors that contribute to such trends are these vehicles' reliability and ease of reselling. The condition of the sedan, SUV, truck, or sports car in question still shapes the picture when determining the overall value. So be sure to take exceptional care of your ride, so you can get top-dollar when the time comes.
Taking these few factors into consideration when looking to trade in or sell your car will help you get the most out of the deal. Remember to take exceptional care of your vehicle, especially if you foresee that you will be trading it in or selling it in the near future.
Also, be wary of loan offers that seem too good to be true because they very well could be. You never want to find yourself upside-down and stuck in a loan where you owe more than your vehicle is worth. And finally, take advantage of the high demand for used cars earlier in the year. For more information regarding trading in or selling your current vehicle, contact CarSmart and let our knowledgeable staff help you get the most value from your ride.