When Should You Trade In A Used Car?
It's often a very difficult decision, choosing whether or not to trade in a used car that is still functional. Older cars may become money pits and need constant repairs. They may burn oil, get terrible gas mileage, or just looked dinged and beaten from years of use.
On the other hand, if they are basically solid and have been well maintained, they could run well, but you may long for a newer vehicle with the latest technology. There is the matter of acquiring a new car payment, which may overshadow all of the practical reasons for a used car trade-in, but there are times when it should be done.
When is it necessary to trade in a used car?
Despite the dread of a new car payment, there are situations where you should trade in your vehicle. These include:
- Multiple breakdowns.
In addition to being inconvenient, breakdowns are also unsafe, and on highways they can be fatal. Sitting in an inoperable vehicle on the side of the freeway or in a rural area with poor cell phone service is not much fun either.
If a new car payment is beyond your budget, a part time job may be the answer. At least you will be confident in being able to get home from both jobs with a newer vehicle, and not wasting money on an old one.
- Changes in family size.
Some reasons for a used car trade in are forced upon you. If you now have too many family members to fit into your vehicle, you must trade up to a larger vehicle. Current safety laws require everyone to be belted. This means no kids bouncing around in the back of the station wagon as in the past.
Downsizing your vehicle is more a matter of choice. Empty nesters whose kids have moved out may no longer need a huge SUV or minivan, and will have more disposable income to purchase their dream vehicle.
Trading in a used car
If you decide to trade in your used vehicle, you may want to consider a newer used vehicle rather than a completely new car. New vehicles depreciate greatly after the first year of ownership, so you can buy a much more expensive model of vehicle for the same price. Newer used vehicles are also often still under warranty.
Be realistic about the trade in value of your car. There are multiple websites that will give you approximate values of what your trade in should be worth, but used car sales representatives will probably offer a much lower price. You will get more for your trade in if you purchase a vehicle that is more expensive or has more luxury options. After all, used car dealers need to make money on some aspect of the sale.