With the price of used cars reaching an all-time high this year, you may be wondering if it’s a good time to sell your car. According to Kelley Blue Book, the average price for a pre-owned vehicle in July 2022 was 11% higher than it was in July 2021 and 40% more than two years ago at the same time.
Is it a Good Time to Sell Your Car?
Vehicles are often seen as depreciating assets, so the high demand and soaring prices could make it a great time to sell your car, and dealerships are fighting to keep a full selection of used cars available on their lots, so they are paying top dollar.
Read on to learn if you should your car now or wait.
You Work Remotely or Retired: Sell Now
If you are one of the millions of workers who transitioned to working from home or gave up working entirely, you may not need a car. Without your commute to work, a car could just be something that drains your bank account. Getting the most for your car while the market is hot could put you ahead.
Of course, if you rely on your car for more than work, like getting groceries or taking the kids to school, you might find that selling your car without replacing it with another one would be a bad idea.
You Moved or Recently Retired: Sell Now
Where you hang your hat today may have drastically different transportation needs than where you used to live. If you live in a city where you can walk, bike, or take public transportation, it might be a great time to part ways with your current ride.
Once you get rid of the hassle of fueling and maintaining a car for other forms of getting around, you may never go back to having a car payment again.
It’s Time to Downsize: Sell Now
If you plan on selling your current car to replace it with another vehicle, you may not make any money on the deal. The exception is if you are planning to downsize to a smaller and less expensive vehicle. For example, maybe you no longer need your minivan or large SUV. These in-demand vehicles could sell for a high price and make it easier to buy a nice sedan.
You Have a Tight Budget for Your Next Car: Wait
If you don’t need a new car right now or you have a tight budget, it may not be the best time to sell. While used cars are selling for a ton right now, your replacement car Is also going to cost more. That means you may end up with a higher payment for a similar make and model.
If you don’t need a newer car today, it might be best to wait until inventories increase and the price of cars comes down. Used cars may not make you as much money, but you won’t lose out on your next car.
Why it May Be the Right Time to Sell Your Car
If your lifestyle has changed and you don’t need a car, it may be worth it to sell now. You’ll put some cash in your pocket (less what you still owe on it) and you’ll be rid of the burden of gas, maintenance, and insurance—all of which have risen substantially in cost.
But if you’re hoping to leverage your old vehicle toward a new car, it’s worth holding off until the new vehicle market stabilizes.
