The right time to say goodbye may be after just a year of ownership.
Everything you need to know about buying, selling a car online
Here are some easy ways to determine how much your car is worth.
Problem Solved
- New cars can lose over 20% of their original value in just a year due to depreciation.
- Five years into ownership, a new car can lose 60% of its original value.
- Well-maintained vehicles have the best chance at value retention.
Selling or trading in your car can significantly contribute to the purchase of a new vehicle. The question is: when is the best time to trade in or sell your car?
Value retention and depreciation are heavily dependent on a vehicle’s age and mileage. If you’re looking to get rid of your car, truck, or SUV, the best time to capitalize on its resale value is within the first few years of ownership.
The best time to sell or trade in a vehicle
A brand new car loses around 20% of its value after one year, according to LendingTree, an online lending marketplace. It loses nearly 60% of its value after five years.
If you paid $32,000 for a car, truck, or SUV in 2020, its fair market value could be closer to just $12,800 after five years of depreciation. If you paid the same amount for a car in 2024, its fair market value could be closer to $25,600. If you’re looking to get the most money or trade-in value for your vehicle, the first year of ownership is the ideal time to consider making a change.
When does a car lose the most value?
Waiting to sell or trade in a vehicle after five years of ownership and accumulating thousands of miles can decimate your vehicle’s resale value. The newer a vehicle is, the more value it has (assuming it has average mileage for its age). The average driver travels roughly 14,489 miles a year as of 2022, according to Kelley Blue Book. A five-year-old vehicle will have accumulated around 72,445 miles based on that average annual mileage estimate, which is relatively high for a used vehicle.
A vehicle that has racked up over 100K miles could easily lose over 60% of its original value. So, if you own an older vehicle that has racked up significant mileage, it may be worth keeping instead of selling or trading in. Additionally, just because a car, truck, or SUV has depreciated severely doesn’t mean it doesn’t have value as a daily driver. Well-maintained vehicles with over 100,000 miles could last for years without encountering any major mechanical issues.
How to get the most value out of your used vehicle
If you intend on selling or trading in your vehicle past its prime, there are steps you can take to get the highest dollar amount possible for it. Ensuring that your car is in the best shape possible before setting a purchase price, or requesting a trade-in quote, can maximize its value.
https://www.youtube.com/watch?v=9Vqq0yNPsZc
Steps to take before selling or trading in your car
- Address major mechanical issues
- Get your vehicle professionally detailed
- Restore as many stock parts (original parts) as possible, modifications can reduce value
- Search for your vehicle’s fair market value using research sites like Kelley Blue Book
There are very few used vehicles that actually appreciate in value over time, so maintenance and repairs are important to retaining as much of a car’s original value as possible. Furthermore, “a clean car can help indicate to car dealers that the car has been well-maintained”, according to Bankrate. If you plan to sell or trade a vehicle in, the better its condition, the higher its value.
