That was the question on Neha Krishnan’s mind when her brand new sedan turned 5. She still remembers the day her promotion was announced, and how she had secretly decided to upgrade from her second hand hatchback to a shiny new sedan.
Cut to the present, and her shiny new sedan is 5 years old. While the car has mostly been trouble free all these years, her last annual service cost her Rs.25,000. Some vital organs have started needing repairs, and some others need replacement. ‘Is this the right time to sell?’, she wondered.
Does that sound like a familiar predicament?
When is the right time to sell your car? While there can be no ‘right’ answer that suits all, most car owners part with their cars after year 3 or year 5. So is it 3, or is it 5? Or should you look at the odometer readings? 60,000 kms, 75,000 kms or 1,00,000 kms? Isn’t it prudent to keep a depreciating asset like a car for at least 10 years?
Like they say, ‘it all depends’. But on what?
The following are the key factors that must influence your decision.
Odometer milestones
1 year / 10,000 kms: This is when a car depreciates most. Definitely not a good time to sell! Your car depreciates anywhere between 20 to 30% depending on make and model, in the first year.
3 years / 30,000 kms: Most warranties will expire at the end of 3 years or 30,000 kms. This is the time when you can expect more than just the regular oil change, air and oil filter replacements. Replacement of brake pads, and minor running repairs can also be expected. A good time to sell if you’re looking for a high resale value.
5 years / 60,000 kms: By this milestone or a little after this milestone, you’ll be spending on major repairs and replacements like a clutch overhaul and new tires. Depending on how well you maintain your car, you will see one organ or the other failing with predictable frequency. Periodic service bills typically shoot up after the 5 year / 60,000 kms milestone. If you want to sell your car at a decent price, sell before this milestone.
7 years / 100,000 kms: This is the stage when the car’s health hugely depends on how it was maintained in its younger years. Badly maintained cars would have turned barely roadworthy, while well maintained cars can continue to run will fairly high levels of reliability. If selling was on your agenda though, remember that most used car buyers filter out cars that cross the 7 years / 1,00,000 kms milestone. Chances are that your car will not be spotted at all in online searches.
In addition to odometer milestones, you must also consider the following factors:
Manufacturer’s service reputation: How easy or difficult is it to service your manufacturer’s cars? This research can easily be done online. A quick call to Wheels Wisdom can also help answer this question, since our core business is servicing cars.
End of Life: Has your manufacturer stopped making the model you own? Or are they about to? If the answer is yes, sell! Serviceability and availability of spares become extremely challenging after EOL, and bring down the selling price of your car drastically.
After you have considered all of the above, if you’re still undecided and want our ‘can’t go wrong’, advice, here goes: Sell anytime between the 3 to 5 year milestones. It is a good middle ground between not losing out too much on depreciation due to a very early sale on one hand, and not ending up with a car with too many maintenance issues due to old age on the other.
Have fun and drive safe!