People buy new cars all the time. It’s bizarre. No matter how you juggle the figures in your head, the conclusion is always the same – these people who can constantly afford to upgrade their wheels must be secret millionaires who basically go to work every day for something to do to pass the time. Eventually, however, you will decide that the people with new cars may just have a more mature approach to money management, and you decide you want in.
You’re going to need to budget, of course (which can be made all the more easy with this handy budget calculator). However, beyond having a little more money in your back pocket, how else can we be savvy about buying a new car? It begins with selling our old cars…
First Of All… Depreciation Really Is A Factor
Few people buy a new car to place it next to their old car on the drive, with the intention of keeping both cars. Selling old cars is part and parcel of buying new cars. The only problem is that depreciation is awaiting in the wings to scupper our hopes of selling for a reasonable price. In general, new cars depreciate in value faster than old cars (unless it’s a classic car). Speaking again in general terms, one-year old cars will have depreciated in value by 15% – 30%. Over three years, this depreciation can exceed 50% the original value of the car.
This is why any desire to sell a new car should be acted upon within two years, making the sale a financially sound investment towards funding your new vehicle purchase. If, however, you are driving a used car, this major chunk of depreciation will have already happened. In this case, you will be competing for sales in the used car market – make sure your car is clean and serviced to ensure potential buyers aren’t put off.
Simply throwing up a for sale sign and waiting for the offers to roll in isn’t going to work. When I was a child, I used to notice a vehicle parked along various nearby suburban roads, with a ‘for sale’ sign in the window. The owner would move the car around the area, hoping to catch the eye of residents. After a few months, the car appeared to be abandoned – eventually, with a flat tire and dirty windows, the car was towed. You need to sell in the right places at the right times.
Consider the season. Convertible cars sell better in spring and summer. Autumn favours 4×4 sales. There’s also increased competition worth attempting to avoid in September and March, as this is when new registrations come out (and people look to sell and upgrade). Good luck!