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Thinking of selling or trading in your car? Deciding to part ways with a trusted vehicle can be a bittersweet decision, but whether you're upgrading to your dream car, downsizing or simply ready for a change, timing the sale strategically can make a significant difference. That’s why it’s important to know what to consider to help determine when you should sell your car, which you can find out right here with Savvy. Learn how to work out the right time to sell today!
What to consider when looking to sell your car
There’s a range of factors to consider that can help you determine whether it’s time to sell or trade in your car. These include:
The age and condition of your car
A car's age is a significant factor affecting its value. Generally, newer cars fetch higher prices than older ones when put up for sale. Industry experts typically recommend selling your car after no more than five years if you’re looking to nab a half-decent price, although the newer, the better.
However, the car's overall condition plays an equally important role. A well-maintained older car with lower mileage can be more valuable than a neglected newer model with greater usage, for example. Regularly servicing your car, maintaining a clean interior and exterior and addressing any minor issues promptly can significantly improve its perceived value to potential buyers.
The kilometres on the odometer
The number of kilometres on your car's odometer is another critical factor. Generally, cars with lower mileage tend to sell for more. This is because lower mileage suggests less wear and tear on the engine and other components.
There’s no hard and fast rule for the number of kilometres clocked up by your car that should trigger its sale, but in most cases you’ll find that the best way to attract a reasonable price and interest is to move your car on before it hits 100,000km, although less is more when it comes to mileage. Selling beyond this mark will likely see your returns decline.
The cost of repairs and maintenance
If you’ve had your car for a while and the cost of servicing is ever increasing, you might decide it’s worth it to cut your losses and make the switch to a newer vehicle.
This is especially the case if you’re coming up on a major servicing interval, such as five years or 100,000km. The cost of servicing will only go up from that point forward, so it’s important to consider whether that’s the right time to move on.
The time left on the warranty
Similarly, if time is running out on your car’s warranty, it might be closing in on the right time to sell it. Letting the warranty run out could reduce your car’s value, as there’s nothing to fall back on if it malfunctions.
If you’ve had problems with your car during your time owning it, it might also be a good time to get it off your hands to a willing buyer while the warranty is still active. Industry experts recommend having no less than 10% to 15% of the time remaining on your warranty before you sell.
Whether your car’s model is still being made
Car models which are now out of production become more expensive to maintain, as the accessibility of repairs and parts will reduce over time. If you’re aware of your vehicle’s manufacturer discontinuing your model in the near future, selling it promptly could be a good way to save you money on servicing in the long run.
The balance of your car loan (if applicable)
Those who’ve taken out a car loan may also have to contend with the outstanding balance whenever they look to sell or trade in their vehicle while under finance. Because the value of cars drop as time goes on, it may come to a point where your car is worth less than what you owe your lender. This is known as negative equity.
You should try to avoid negative equity if you’re looking to sell your car within the next few years, as this could leave you with a shortfall of thousands of dollars to pay out of pocket if your car sale doesn’t cover your loan. Because of this, it’s important to think about whether it’s worth waiting until your loan balance drops below your car’s value or taking the hit now.
The strength of your credit profile
Another car loan factor to consider is how your credit score is looking at the time of your sale. Bill Tsouvalas, Managing Director of Savvy, says selling your car at the wrong time could cost you on your next loan.
“All car loans are assessed based on a wide range of factors, but one of the most important is your credit score”, he said.
“If your score has dipped over the past few years, such as if you struggled to cover your car loan payments at some point, applying for a new loan then and there could see you attract a much higher rate than you had previously.
“Car loans can be a great tool for building up your credit, so waiting until your score begins to climb would be the best time to sell your car for the sake of your next loan’s cost.”
Cars and depreciation
As mentioned above, it’s important to consider depreciation if you’re looking to sell your car. Vehicles depreciate at a faster rate the newer they are, with Budget Direct stating that 10% to 15% of your car’s value is wiped immediately when you drive it away, with another 10% to 15% disappearing from its value after 12 months of use.
This could mean that, in a particularly extreme example, a brand-new car bought for $50,000 may only be worth $35,000 after a year, even if it’s well-maintained and hasn’t been in any accidents, with this number continuing to drop.
Not all cars depreciate at the same rate, however. This can change from make to make and model to model, with some holding their value better than others. More valuable cars may see a sharper decline in value due to their higher starting price and more expensive ongoing maintenance costs.
For this reason, selling or trading in newer cars within the five-year window will help maximise the return you get on your vehicle. However, if you have an older used car, depreciation becomes less of a factor as it levels out, so there may be less time pressure to sell if it’s still in strong working order and the mileage is reasonable.
The best times to sell your car
Car sales can also be impacted heavily by timing. The following are some of the best times to help you maximise your car sale returns:
- Spring: in the leadup to the summer holidays, there are more eyes on cars for sale. During the months of September, October and November, you’ll likely stand the best chance of moving your car on.
- Low-cost petrol environment: this is especially important for those with fuel-inefficient vehicles, as people may be more willing to stump up if petrol is cheap.
- Cater to your market: think about who you’re selling to. For example, if you want your car to be open to university students and high schoolers, listing in February and November is the optimal time. Convertibles are also more likely to sell in the warmer months.
When not to sell your car
There are also specific times to avoid when it comes to selling your car. These include:
- End of financial year: in June each year, car dealerships run end of financial year (EOFY) sales on their cars. With such a focus on clearing their stock before the start of July, car buyers are more likely to look for a good deal at a dealership than with a private seller around this time.
- Winter: if you live in a part of the country where winters are cold and wet, those looking to buy a new car may not be as likely to spend time looking for one as they would in warmer months. This is compounded by the fact that days are shorter, leaving less time to go out and about after work.
- Christmas and New Year: the period over Christmas and New Year typically sees a noticeable lull in car buying activity, with prospective buyers going on holiday or preferring to kick back during the break.
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