Are you thinking about trading in your car? Similar to buying a car, there’s an art to the timing of a trade in. Here are a couple things you consider when you’re ready to say goodbye to your vehicle.
The trade in value of your car has less to do with mileage than you think. In fact, it almost doesn’t matter at all. Your car will depreciate a little bit with every 10,000 miles you drive; however, if your car is in good shape, you can still get a good amount of money when trading it in.
How old is ‘too old’ when it comes to trading in your car? While a lot of buyers are looking for newer models, this is not always true. Your vehicle’s value will drop the most dramatically in the first 5 years after it’s released. That being said, if you’re not planning on trading in your car before the five year mark, you don’t need to rush. The difference between a car that’s 6 years old and one that’s 8 year old is pretty insignificant.
Time of the Year
Is there a specific time of the year that’s best to trade in your car? An article written by Ryan ZumMallen for edmunds.com states, “Values are higher in the first two quarters of the year, with larger drops in the final two quarters. Obviously, the longer you have a car, the more it will depreciate. But there are other valid reasons that keep values afloat early in the year. First of all, there are more buyers in the market early in the year and dealerships need more cars to feed the demand. Also, a used car feels more new when it is eight or 10 months away from turning a model year older rather than just two or four months away. These are good things to keep in mind when you’re looking to either time your trade-in or negotiate with a salesperson in March instead of October.”
Generally speaking, you shouldn’t be considering a trade in when you still owe money on your vehicle. If you’re planning to trade a vehicle you still owe money on, you could easily be underwater on the loan. Trading a vehicle under these circumstances is a recipe for a financial disaster! If you’re serious about trading in your car, the best way to go about it is to call your lender to find out what you owe. Then, go to kbb.com and find out what your car is worth. If the trade in value is higher than what you owe, you’re good to go! If not, work to pay off your vehicle or pay down your loan more before trading it in for something else.
Get the most out of your vehicle by trading it in at the opportune time. Use the information above to help you get the most value out of your car.