When is the best time to sell your car?
’Tis the season of giving 🎁
It’s also the season of receiving, buying, selling and upgrading. Overall it’s the season that encourages change, in many aspects of our lives.
As this happens, naturally any new item that finds its way into our lives typically means something else has to move out to make room. Unfortunately, some things are easier to wave goodbye to than others. One of those tougher decisions? For many of us, it’s deciding what to do with our four-wheeled friend. We assume that a good deal and a speedy sales process are a given when it comes time to selling your car at this time of year, but as so many find out much later on - that really isn’t often the case.
The process of selling a vehicle is trickier than it seems. The result of the sale seldom lies in the hands of the seller. However, all hope is not lost once we’ve considered a couple of things.
*It’s important to remember that every disposal situation is unique, and varies from case to case.
1. Settlement Sweet Spot
If you bought the car with cash or if it is already paid in full then you’re free and exempt from this financial consideration.
If you bought your car for cash or have already paid it in full, then the great news is you’re free from this first point.
Financing your vehicle? take note. Your settlement amount is what you still owe the bank in repayments (instalments + the interest) in order to fully pay off your vehicle. However, there is always a break-even point; where what you still owe the bank and what your car is worth in the market, meet. That’s the indicator that tells you it’s time to sell or trade-in.
If you’re in a 72 month agreement, your break-even point is roughly around 45-49 months depending on your agreement. If you have the ability to increase your monthly repayments, you can find yourself bringing that Settlement Sweet Spot forward.
🗒️ Your Settlement Sweet Spot can vary, depending on your finance deal. Balloon payments, deposits and interest rates can all drastically impact where that break-even point is. Make sure you know and understand your deal.
2. Mileage Midpoint
The kilometres you’ve racked up on your wheels is one of the primary factors determining the value of your vehicle, and ultimately the wise time to sell.
Generally, the lower the mileage, the more appealing it is to potential buyers. And the more k’s on the clock, the chances of fetching a higher price begins to diminish, quite dramatically.
Just because your car has low mileage in comparison to its age, doesn’t necessarily mean that it is immune to damage. A comprehensive inspection is required before listing a vehicle regardless of this parameter. When your car is left stationary for too long, a host of mechanical and electrical issues can arise when you dare to drive it again.
Keep an eye on your odometer but don’t be unsettled by putting mileage on your car, after all, these machines are meant to be driven.
🗒️ The demand for high mileage cars is typically lower, but that doesn’t mean there isn’t a buyer for it. Many people are on the lookout for good deals and sometimes cars in these mileage brackets can become hot property.
3. Motor Plan Pinnacle
Most discerning sellers would be looking to get themselves out of their car either whilst their motor plan is still valid (making it attractive to buyers) or just as it ends (making it an attractive time to move on). Most plans are valid for 5 years, meaning that the 3-4 year mark is a good time to begin looking to sell your way out of your deal.
No matter the age of your car, if there’s a valid plan in place, it’s an attractive listing for any buyer that knows what they’re looking for.
It really gives the next owner peace of mind. They don’t have to consider purchasing an additional plan, or worrying about things that could go wrong, easing the anxieties associated with their next big decision. But it also makes the maths simple. No more added costs bolted onto the end of their deal for plans, warranties, guarantees etc. what they pay for is what they get.
🗒️ Remember that there’s a difference between a motor plan and a service plan. Whilst a service plan is still better than no coverage, a motor plan usually extends beyond just the servicing of the vehicle and covers parts, damages and warranties.
4. An honourable mention: Distribution Dead Stops
Much like any decision, selling your your car won’t come without its fair share of research. It’s important to understand the current state of the vehicle brand that you own. What its resale market is like, what types of people buy it, are there new models coming out etc.
Many manufacturers are in the process of introducing new models and variants, slowing down or halting altogether the manufacture and distribution of certain vehicles in certain countries. At this point, unless you’re behind the wheel of something collectable, it might be a good opportunity to make a quick move and maximise the money in your metal.
In most cases, the value of the brand and its models tends to depreciate at a fast pace when these decisions are made. Parts become scarcely available, service centres become difficult to source and potential buyers become few and far between.
🗒️ Brands tend to introduce new models and variants fairly often. These introductions can have negative impacts on the market, but the launch of new models can also mean that there are some great deals to be found in the second hand market.
When all else fails, sell in December when those who celebrate Christmas are searching for a gift. Alternatively, January is also a great time to sell; frantic parents start looking for safe, reliable and affordable first cars for their children who are soon to be off to university. (Read our article on the best first cars to buy if you fall into this category)
These are just a few of the factors you need to consider when selling, but these are all relative to the market and your own personal circumstances. If you looked at it from the other side of the market, these are the factors the potential buyers will be on the lookout for too.