This is a question that faces virtually every motorist together with choosing car insurance. Everyone obviously wants the best trade-in deal for their car, and so it’s important to know when the best time should be. Read on and you’ll find out.
TRADING IN YOUR CAR AT THE CORRECT TIME WILL SAVE YOU MUCH MONEY
There are many things to consider when you are wanting to trade in your car. CarZar is an online market for selling used cars. According to them, you need to ask yourself some questions first, before you wish to trade in your car.
ARE YOU THROWING GOOD MONEY AFTER BAD?
Your car may be costing you too much. No sooner has the garage fixed one problem, another one pops up. These extra expenses can be quite stressful. If repairs are major, then it’s time to consider selling. Second-hand cars usually start developing problems after 100 000 km, so that’s a good time to trade them in or sell them.
PERHAPS THE CAR COSTS TOO MUCH TO RUN
Possibly, instalments, high fuel costs and increasing insurance premiums may make it financially too difficult to keep the car.
IS THE WARRANTY OR MOTOR PLAN NEARLY FINISHED?
A car warranty or motor plan provides necessary protection of a car owner. Spare parts are generally expensive, seeing most, if not all, have to be imported. So, if your warranty or motor plan is about to expire, sell your car before its trade-in value significantly decreases. The most popular cars are those that still have their warranty.
SELL YOUR CAR IF IT IS TO BE DISCONTINUED
Don’t hold onto your car if that particular make is to be discontinued. Citroen is a case in point. A major issue may be difficulty in finding spare parts at a later stage. CarZar suggests that you sell your car as soon as possible, hopefully at not too great a loss. After all, who wants a discontinued car?
WHAT GUIDELINE CAN YOU FOLLOW WHEN WANTING TO SELL YOUR CAR?
Below is a guideline that can help you in your decision to trade in or sell your car.
PRICEY CARS DEPRECIATE RAPIDLY WHEN THEY GET OLD
The value of costly cars can suddenly fall when they start becoming old. According to CarZar, you can avoid this by selling them before their warranty or motor plan expires.
CERTAIN POPULAR CARS RETAIN THEIR VALUE FOR MUCH LONGER
Some popular cars such as the Toyota Taz, the Toyota Corolla and VW Polo keep their value for quite a long time.
WHAT IF I HAVE BOUGHT A NEW CAR?
Don’t keep a new car forever. CarZar suggests that a new car should be sold within three years of its purchase. This is because either the motor plan or warranty is still in force, thus boosting the value of the car.
MY CAR MAY BE QUITE OLD – WHAT SHOULD I DO?
Sell your car within two years if it is between three and seven years old. This also applies if it is out of a motor plan or warranty.
WHAT ABOUT CARS THAT ARE MORE THAN 10 YEARS OLD?
Cars more than 10 years old will sell for about half their book value, because car financing won’t be available.
KEEP A WATCH ON YOUR CAR’S MILEAGE
Mileage can seriously affect the value of your car. If mileage exceeds 250 000 km, or if your car has done too much mileage for its age and model, expect the car’s value to decrease significantly. The ball-park mileage used by motorists is 25 000 km/year. Anything more than that will cause at least a 10% decrease in the car’s value.
HOW QUICKLY DO NEW CARS LOSE THEIR VALUE?
The AA states that a new car depreciates the second you drive it out of a dealership. It will have lost 40% of its value after one year. At 16 000 km/year, the average car will have lost about 60% of its value after three years. With most cars losing their value between 15 – 20% per year, your car will only be half its original purchase price after five years.
Knowing the above, you will be in a much better position to decide when it’s the best time to sell or trade in your car.
This article was prepared by Eric Sandmann in his personal capacity. The views and opinions expressed in this article are the author’s own and do not reflect the views and opinions of Prime Meridian Direct (Pty) Ltd, FSP41040 (car insurance and life cover products). The views and opinions in the article should not be attributed to anyone but the author unless expressly stated. Nothing in this article should be relied upon as advice, this publication is presented for informational purposes only. No person should act or refrain from acting in reliance on any information found in this article, without first obtaining proper financial advice from the appropriate professional. The author makes no claims, promises or guarantees about the accuracy, or completeness, of any information linked from, referred to, or contained in this article. The author reserves the right, to edit and change the content of this article.