This article has been updated from a previous version.
Your car has taken you everywhere, from family gatherings to work and every errand and journey in between. You may even have a nickname for your vehicle, which is why it can be hard to decide to part ways. But, when circumstances change, or the maintenance costs become too much, it may be time to upgrade.
The reason for selling your car may fall under one of these categories: starting a family, changing lifestyles, cashing in on what value is left in your vehicle, requiring a new car after a collision, or facing a mechanical failure. However, the process for finding a new car is relatively the same.
Start by determining what value your vehicle has and whether it may be worth keeping for a while longer.
According to Consumer Reports, vehicles typically depreciate by 64% within the first five years and some even faster. That means a car that once cost $34,000 would lose $21,760 in value over that period. So, would it be worth keeping? It depends.
If you have financed a large portion of the price of your car, there may be a fine line between when you can pay off the loan, the value that has depreciated, and the amount you can make by selling your vehicle. If you wait too long, your car’s value may decrease so much that you can’t use any of its value toward a reasonable trade-in or selling price.
Consumer Reports suggests that if the annual repair bill for your car exceeds a year’s worth of car payments, then you should start considering an upgrade. On the other hand, making a few large repairs may still cost less than a new car and can keep your vehicle roadworthy.
Your car’s resale value may vary from what you see online. Plug the make and model of your car into your search engine and compare the average cost of similar vehicles, looking at a comparable year, the kilometres on the odometer, and history.
If your vehicle has been in a collision, it would generally affect the resale value. Some companies can provide you with a report and documentation for your car’s collision history so that you can disclose it to a future buyer. You may also want to recommend the buyer has a pre-purchase inspection done on the car before they agree to the purchase.
You may want to get some money back for your car while it is still in usable condition. Most dealerships will offer you some money for a trade-in, but you may want to sell it privately if your car has some value.
However, trading in your car can save you the time and effort of finding the right buyer, and the money goes toward the purchase price of your new vehicle.
To get the best price for your trade-in from a dealer:
If your car is roadworthy but a little worse for wear, you also have another option. Many charities will offer you a sizeable tax receipt for your vehicle. It helps someone in need get from point A to point B, and you may see a higher return than you would from a trade-in.
When looking for a new vehicle, make sure to do your research. Here is a list of qualities you may want to compare when seeking your next ride:
According to iSeeCars.com, the Jeep Wrangler holds its value the best, only depreciating by 9.2% over five years. The worst, the Nissan Leaf, with an average five-year depreciation of 65.1%.
Car dealerships typically offer their salespeople commissions, which means there are usually sales targets. Here is how you can use them to your advantage:
Additionally, you may also save when the next year’s model hits the floor. The dealership will want this year’s model off the lot to make room for new inventory.
If you don’t have the time to wait for an end-of-year promotion, try shopping during the week instead of the weekend. The salesperson may have more time for you when the dealership is not as busy, allowing for a more personalized shopping experience and offering more time for negotiations.
Make comparing car insurance part of your vehicle purchase decision. New cars typically come with a hefty price tag, so you’ll want to make sure you’re fully covered, and there are no surprises. You wouldn’t want to end up with an insurance premium you didn’t expect after you’ve picked out your new car.
Compare auto insurance quotes to find the best rate on your new vehicle.