In late 2018, I finally finished paying off my vehicle by making one last, glorious car payment. I had bought a brand new luxury SUV in 2014 (one of my bigger money mistakes), so the sting of depreciation and a higher-than-necessary auto loan had plagued me for years.
I have thoroughly enjoyed being car payment-free ever since, which has loosened up my monthly budget for other exciting money moves. However, as much as I don’t want to take on another car loan, I am now finding myself watching the odometer tick perilously close to the 100,000-mile mark. And although my husband would love for me to drive my vehicle until it literally falls apart, I can’t help but daydream about trading it in.
This milestone has me wondering: what is the best time to sell your car, and can you actually lose money if you don’t sell at the right time?
When is the best time to sell your car? 9 important considerations
Since I began researching these questions, I have learned that yes, there is actually a right time to sell your vehicle. The problem is, that time frame isn’t the same for everyone, or even for every vehicle.
Here are several considerations to keep in mind when figuring out the best time to sell your car.
1. Time of year
According to data from Edmunds.com Inc., an online resource of automotive information, the best time to sell or trade in a vehicle is usually in the first half of the year. During those first two quarters, used vehicles tend to retain more of their value than in the final two quarters of the year.
This could be because of a combination of factors. First, a vehicle can seem newer when it’s 10 to 12 months away from the next model year’s release, versus being only a month or two away. Used vehicle inventory also tends to dip early in the calendar year, which makes it easier to ask more for your vehicle than when the market is saturated.
Some experts even believe that with the holidays in the rearview (and often, with tax returns looming or in-hand), buyers are ready to spend more on car purchases toward the beginning of the year. This could affect how much you can realistically earn from the sale.
2. Your car’s mileage
Like many others, I have always believed that the 100,000-mile mark was the end of my vehicle’s resale value. This infamous milestone isn’t necessarily a monetary death sentence, however.
Yes, it’s true that your car tends to see a dip in value each time it hits a new 10,000-mile increment. And in some cases, reaching 100,000 miles may limit who is willing to buy your car and for how much.
- In some areas, auto auctions will not allow vehicles with more than 100,000 miles to be sold (or will categorize them differently). Because of this, many dealerships will avoid buying cars with 100,000-plus miles or will pay less for them.
- Some used auto loan lenders set mileage limits for borrowers. This means that a high-mileage vehicle may be more difficult to sell, whether you’re trading it in to a dealer or seeking a private buyer.
3. Your car’s condition
Obviously, the better shape your vehicle is in, the more you can reasonably expect to get from the sale. This not only means physical condition, though; it also includes mechanical issues.
If your vehicle has reached the point where you’re paying for multiple, major repairs, it might make sense to consider trading it in for something more reliable. Crunch the numbers and decide whether you’re pouring more money into fixing your vehicle than you buying something newer or with fewer miles.
4. Car make and model
Every vehicle will depreciate differently. For instance, luxury cars like BMWs tend to, on average, lose value faster than mid-class vehicles. And even when comparing the same make and model, you may find that certain model years depreciate faster than others.
It’s important to calculate how much your vehicle has already depreciated, versus how much depreciation it has left. Depending on how quickly your vehicle depreciates or how long it retains its value, you may decide that selling sooner (or later) is in your best interests.
5. Car warranties
Is your car still under its manufacturer’s original warranty? Do you still have many miles to go before an extended warranty expires?
If so, your car may be worth considerably more now than it will be a short while down the road.
Both car dealers and private buyers recognize the value of a used car that’s still under warranty. If you plan to sell your vehicle in the future, but are getting closer to your warranty’s mileage or age limit, consider selling sooner rather than later.
The peace of mind that comes with intact warranty protection is a great selling point, and might result in a higher net price for you.
6. Down payment savings
Selling your car isn’t always about its value and mechanical condition; it’s also about your personal finances and what you can afford. One of the first considerations is your down payment savings.
In some cases, selling or trading your old car in may be enough to cover the down payment on its replacement — but not always. Once you have an idea of the new(er) vehicle or price range you’re eyeing, do the math to see how much you’ll be required to save for a car.
If selling your current car won’t net enough for the down payment, you might need to save up the difference before you can begin shopping for a new vehicle.
7. Your credit score
A significant number of Americans buy their cars with the help of an auto loan. According to Experian, nearly 88% of new car buyers and more than 40% of used car buyers financed their purchases in 2020.
To get approved for a car loan — especially one with a competitive interest rate and terms — you’ll likely need a healthy credit score. If your credit history is sparse, or you have negative items on your credit report, you may have trouble getting the auto loan you need.
In this case, waiting until you improve your credit score, getting a co-signer, or just saving enough to buy a car in cash may be your best bet.
8. Interest rates
The cost of financing a vehicle purchase is determined by your auto loan’s interest rate. If rates are fantastic or you have an opportunity to buy a vehicle with a promotional, 0% APR offer, it could sway you into buying sooner than planned.
Conversely, high interest rates may be a good reason to hold off on selling your car and buying another. High rates may be due to the market, your personal credit score, the repayment terms chosen for your auto loan, and more.
You may also find that a period of higher interest rates can deter some buyers, which could lead to a lower asking price when you try to sell your car. If the market is hot and buyers are aplenty, it might be the right time to sell.
9. Your budget
Obviously, your personal budget plays a large role in when you should sell and/or buy a vehicle. It might be the right time to sell your car (and ease up on your monthly budget) if:
- You need to reduce your monthly payments by buying something more affordable.
- You need to decrease your car insurance rates with an older or less valuable vehicle.
- Your current vehicle is costing too much in repairs, maintenance, or gas.
- You need to access the equity in your car’s value.
If you plan to get a new(er) vehicle once you sell your existing car, consider the budget impacts it will have. Even the best car insurance policies will likely charge more for newer and/or more valuable vehicles. You may be taking on a new or higher monthly payment with your next car purchase, and you might find that things like gas costs or personal property taxes (in certain states) will also increase.
Where to sell: 3 options
So you’ve decided that it’s the right time to sell your car? Now you need to determine where.
1. Private sale
Generally, a private auto sale will net the highest sales price, making it the better option if you want to squeeze every possible penny out of your car’s value. The caveat, though, is that the sale may take longer and you will have to work harder.
A successful private sale might rely on word of mouth or advertising, in order to help connect you with potential buyers. You may choose to post your vehicle on local social media marketplaces, in the newspaper classifieds, or by placing a sign in its window. No matter how you find your eventual buyer, though, you’ll get the most money faster by putting in some work.
You’ll also be responsible for providing information to interested parties, facilitating test drives and inspections, negotiating the car sale, and, if all goes well, handing over the keys in exchange for payment. Depending on your car, the local market, the time of year, and your asking price, this process can happen quickly or could take months.
2. Dealership sale
Selling your car to a dealership — either as a straight sale or as a trade-in — is usually a simple process. Whether it plans to resell your car on the lot or take it to an auto auction, you can typically expect to get an offer of some kind from a dealer, even if you don’t plan to buy your next car from there.
It’s important to note, though, that working with a dealer won’t earn you as much on the sales price. Dealerships have plenty of overhead to consider and need to make a profit on your car, so the price you’re offered will likely be below fair market trade-in value.
If you’re looking for a quicker and easier way to sell your car, though, the local dealership could be a good place to start.
3. Sell online
These days, you can also sell your car online, from the comfort of your own home. Although some online selling platforms are more like digital classifieds — think sites like Autotrader — others use AI to make the process simpler than ever.
Through companies like Edmunds, Kelley Blue Book, and Carvana, you can research pricing and sell your car at any time, day or night. After providing some basic info (including your vehicle’s identification number and/or license plate number), you’ll be given a no-obligation cash offer that you can take or leave.
In the case of Carvana, it’ll send someone out to inspect the vehicle, pick it up, and hand you a check. Edmunds’ cash offer is good for seven days, during which time you’ll need to bring your car in for an inspection in order to get your payment.
Through Kelley Blue Book, you can get an instant cash offer for your pre-owned vehicle while also viewing the fair market price for both private and dealership sales. If you accept the cash offer, you’re able to take your vehicle to your choice of local, participating dealers to receive a check (even if you don’t buy a car from them).
The bottom line
It can be hard to perfectly pinpoint the best time to sell your car. In many cases, the answer will be different from one driver (and vehicle) to the next.
Some owners want to sell so they can squeeze the most value from their vehicle, before it depreciates even further or breaks down. Others need to sell so they can reduce monthly expenses, or get into a more reliable car that doesn’t need major service. And some folks simply enjoy driving newer cars every few years.
Whatever your reason, it’s important to do the math on your specific vehicle and situation. Some general words of wisdom: be sure to sell just before — or long after — big depreciation dips to get the best price for your car; sell when the market is hot and active; and opt for the auto sales channel that works best for your specific goals.