Knowing when to upgrade to a new car can be difficult. Should you drive your current vehicle until it breaks down to get the most out of it or sell it before it starts needing frequent and costly repairs?
In this article, we'll go over a few signs that it may be time to move on from your current vehicle. Let's get started!
1. Your car costs more to keep on the road than it's worth
As your car ages, it may cost more to keep on the road than it's worth. To see if this is the case, start by estimating your car's value with a site like Kelley Blue Book (KBB).
Next, determine the condition of your car. According to Tiger Okeley at used car dealership Oak Motors, "It's worth paying for your own professional inspection as most buyers are going to request one anyway. So you might as well know what they're going to hear if they get their own inspection."
From there, consider the costs of keeping the car on the road, including upcoming repairs, maintenance, gas, etc. If these costs are more than the actual value of the car, you may want to upgrade. At the very least, you'll have a more informed outlook on what car ownership is costing you.
It's also a good idea to research common failures for your car model and at what mileage they occur. For certain makes and models, it's not uncommon for transmissions to fail, and sometimes can cost more than the car's worth to fix. If you're coming up to the mileage when a big failure often happens, it might be wise to sell the car while it's still worth something.
2. Your car feels unsafe to drive
Regardless of your car's value, if it feels unsafe to drive, you may want to upgrade. Car safety features have improved dramatically over the years, and outdated cars may be more dangerous.
Some modern safety features include adaptive cruise control, automatic emergency braking, lane-keeping assist, blind spot detection, rearview cameras, parking sensors, and more.
3. Your needs change
Changing needs may also prompt a car upgrade. For example, you may want a larger vehicle if your family is growing, a commuter car if you get a new job that's farther away from home, or a pickup truck if you recently moved to a rural area with rough terrain.
4. Car parts become expensive or hard to find
As your car gets older, it may become difficult to find parts or they may become more scarce and expensive. In the worst case, the car manufacturer could go out of business and the car part could become obsolete.
If you're worried about not finding the right parts for car repairs, you may want to upgrade.
The best times to sell
Let's say you've decided to sell your car, but you're not sure when is the best time. Here are a few factors to consider:
Car depreciation. It's no secret that cars depreciate over time. However, the rate of depreciation fluctuates. A car will lose 11% of its value the moment you drive it off the lot, 20% in the first year, and 15% every year after that until it's five years old. Consequently, selling a new car in the first five years may not be the best time to sell. The sweet spot may be after five years when you won't take as much of a depreciation hit, but before the car gets so old that few are interested in buying it and repairs become more frequent and costly.
Mileage. After a car hits 100,000 miles, many buyers won't be interested in it. Many filter out cars with over 100,000 miles when shopping online. So consider selling before you hit this mile mark.
Season. Demand for used cars tends to go up in summer and spring (which is also tax refund season). Consequently, these may be ideal times to get the most for your car.
Other economic factors. Sometimes demand for certain car models increases when the manufacturer of new models gets hit by a supply shortage. Other times, the price of public transportation goes up. These and similar economic shocks can cause the demand for your car to go up so you can command a higher price. Follow economic trends to know when you'll get the biggest payout for your car.
The bottom line
At the end of the day, choosing when to sell your car is a personal decision. There are a lot of factors that go into it. But now that you know some of the most important ones, you're better equipped to make an informed decision.
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