The Art Of Selling A Car At The Best Time

You've been driving your car for a couple of years and you reckon it's time to think about selling it to upgrade to something better and newer - but when is the best time to sell your car? Are there certain things to consider and are these the same for all cars? What is more important in determining your car's resale value: model year or mileage? Would selling your car have tax implications? Is it better to hold on to an old car for years to save money, or should you be replacing your car every few years? There are so many questions and the mere thought of wading into the unknown makes you apprehensive. Let us shed some light on a few of these issues to help you more easily answer the questions to determine when is the best time to sell a car and how to go about it.

There could be many reasons why you could decide that your car's number is up and it is time to move on. Here are a few to help you decide when is the best time to sell that car:

• Safety. You're realizing newer cars have important safety tech that your older car doesn't, whether that is the airbag count or blind-spot assist. Your older car may also have a relatively poor crash rating. Or you welcomed your first child and you need something safer with child car seat attachment points. A lack of safety features can make any time a good time to sell a used car. A 2021 model Honda Civic offers more safety features and a higher star rating than a 2011 model Hyundai Sonata, such is progress, even though one is a compact car and the other an (older) mid-size car. Check the IIHS and NHTSA websites for safety reviews on all the manufacturers' vehicles and on the cars you consider. Safety comes first!
• Maintenance. It's becoming increasingly hard to find car parts for your model and maintenance is starting to cost an arm and a leg, considering the value of the car.
• Compliance. Legislation varies between states and counties, but you might live somewhere where, for example, your old car fails its emissions test as mandated by local laws.
• You don't trust it. It is getting on in life and there is always something wrong with it. Once you fix a problem, the next crops up. You simply don't trust its reliability anymore. A fail on the reliability report card can be damning when it comes to the safety of your family and it might be worth your while paying that down payment on a newer car in exchange for reliability.
• Practical reasons. Maybe your family is expanding, or you need a workhorse over a sedan, or you go camping regularly and your old car simply cannot cater to these needs, so you need something bigger or more outdoorsy. Or you've relocated to an area where the weather or terrain necessitates buying a different type of car. Perhaps your children are grown up and have moved out of the house, so you don't need a Chrysler Pacifica anymore.
• Money. You find it would make economic sense. You have saved up enough for a big down payment on a newer car, so you don't have to finance a large amount. Or it doesn't make sense to overcapitalize on an old car that is almost worthless and the maintenance and repairs cost more than the car - or it guzzles gas. Perhaps you've fallen on financial hard times and you simply need the money, so selling your expensive CLS-Class Merc makes more sense in favor of something more budget-friendly.

Is there an optimal season or month to sell your car? It varies from country to country, but in the US, certain patterns suggest that there might sometimes be an optimal time of year when it's ideal to sell your car. For what it's worth, March and September have been identified as two months during which the number of used cars available on the market experiences a noticeable surge - but only in the USA. More cars available on the market means more competition and lower prices, so you might consider these as months not to sell your car, if you want a good price. It is also quite obvious that if you are trying to sell a convertible, this should be done during the summer months. In fact, trends show that most prices increase in spring and summer due to demand, so most cars are worth somewhat more from March through August. However, it can be easier to sell a 4WD vehicle or SUV in winter, especially if you live in a snowy region of the US, as people realize they need such vehicles. Lastly, for US buyers, state and IRS tax refunds are usually paid out any time from February to April/May, so during these months, people may have a bit expendable income that they can use for buying a car.

Many things can affect how long it takes to sell your car. Even for professional second-hand-car dealers, the average time to sell a car in the US is two months. The average time to sell a car privately could be significantly longer, especially if it's your first time doing it. That is why your timing and planning must be meticulous. If you make sure everything is in order before you put your car on the market, you can significantly reduce the time it takes you to find its new owner. But be aware that there are scammers out there that will try to take advantage, especially if you are in a rush to get rid of your car. Learn more about car selling scams and how to avoid becoming prey to a con artist here.

Decide from the outset what the minimum price is that you are willing to settle for. You can use resources such as Kelly Blue Book for an accurate appraisal of what your car's true market value is. Irrespective of whether you are looking for the prices of Chevrolets, Fords, Volkswagens, or Hondas, they are all there, from A to Z. Make sure the maintenance is up to date, that no important car repair is outstanding, and that the car has been serviced and checked by a professional mechanic. The tires should also be in reasonable condition. Lastly, give the car a thorough detailing. Spending a hundred dollars or so here can add a lot more to the overall price.

Compile a file of the necessary paperwork:

• The title (free of salvage records or liens)
• The vehicle history report
• The owner's manual and service manual
• The warranty details (including transferable warranties)
• Up-to-date vehicle-inspection or smog-compliance certificate (state-dependent)

This is how you can sell your car fast - or at least as fast as possible. Don't leave the preparations too late, or you might end up wasting too much time, be pressured to sell, and settle for less.

In our minds, our cars reach certain milestones, and perhaps the 100,000-mile mark in one such a milestone. Indeed, when people enter mileage limits when searching for used cars online, 100,000 miles is a typical one, and if your car has more than that on the odometer, it may not show up in such a search. It doesn't even matter that your 100,000-mile car is still in good shape. It also tends to be a psychological barrier, because we feel a car is 'old' when it has passed this mileage mark.

But, there are actually a few other mileage milestones, the first one being as soon as it hits 36,000 miles, which is when some cars reach the mileage limit of their factory warranties. Around this time, the first set of tires may also need replacing. However, this may be too soon to sell your car, unless you really have to. The next milestone is anywhere from around 60,000 miles when more expensive items become due for replacement, like a cambelt change and other more serious mechanical replacements. This is generally a good time to sell your car. It should be between three and four years old and you should not owe much on it anymore.

According to the IRS, any personal vehicle is regarded as a capital asset and if you sell your car for more than you paid for it and therefore make a profit on it, you have to declare it on your tax return and will have to pay tax on selling that car. If you sell your car at a loss, which is sometimes the case, you don't have to declare or pay anything in terms of taxes. There is a certain way in which you have to calculate your tax liability:

• Subtract from the original purchase price any taxes associated with that purchase, such as wheel tax or sales tax.
• Add the costs of any improvements you made to the car, like fitting a tow hitch or sound system. This excludes normal maintenance.
• Use this adjusted price and subtract the price at which you sold the car from it. If this is a positive number, you must declare it on your tax return on Form 1040, using Schedule D ('Capital Gains and Losses').

For a comprehensive overview of vehicle taxes, read our Car Taxes blog here.

Never make the decision to sell your car in a hurry. If your car has become unreliable and requires frequent repairs, it might be false economy to keep it, because that money could have gone into a down payment on a newer car. However, if your car is of a very reliable brand and your trusted and knowledgeable mechanic gives it a clean bill of health with no imminent large expenses, you might be able to hold on to it for a few more years. If you are selling, always do your homework and be sure you know what your car is worth before advertising it. Keep in mind that you will get less for it when trading in, rather than selling it privately, although this is easier because you get the money straight away, and you don't have to go through the arduous selling process. The best time to sell your car to a dealer would be if there are time pressures and you don't mind settling for less.

We cannot keep our cars forever and, sooner or later, we are all going to have to make the decision when and how we are going to sell them. This is one of the most frequently asked questions, so, you're in good company if you find yourself wondering.