To know whether you’ll make more money on your car now or later, you’ll need to know the three Ms:
You’re the only person who can say whether you should sell your car now or wait. But you’ll need to consider the three Ms to find out what works best for you — market, mileage, and money (how much you owe and how much you want to make).
Basically, you get more money when your equity is higher and the market is hotter. But the real trick is finding the time when those two elements are working together.
If the market is hot, but you still owe a lot of money on your car loan, you may not make as much as you will once the market has cooled down and you’ve paid down the note.
Sometimes the market is so hot that equity doesn’t matter. Like this year. So far in 2022, people have been able to sell their used cars for more money than the original “new” sticker price, which is almost unheard of.
The price of recently sold used cars is the best indicator of what you can sell your car for. Google your car model to get an idea of your car’s going value. Similarly, you can check out what other cars are going for on our marketplace.
If you sell your car, you want to ensure you’re getting a competitive price. So take a look at what other similar cars in your area are being bought and sold for.
When buyers have many cars to choose from, they can pay less. And when sellers have lots of cars they need to sell, they’re willing to sell for less. When fewer cars exist, buyers are less picky, and sellers can charge more.
In addition, a reduction in new car supply can cause an increase in used car demand (which can then reduce used car supply and increase used car prices).
Once you know where the market is, or where it might be going, you can adjust for mileage and condition.
Finding the right mileage to sell your car is like Goldilocks and the Three Bears. “Just right” is usually somewhere between 60,000 and 80,000 miles, but that’s not always the case.
If you have a new loan on your car, you may be unable to pay it off with the proceeds from the sale. And you may need to drive it after the 80,000-mile mark.
Mileage helps a buyer know the condition of a car and how much money they can expect to spend on repairs.
A car with low mileage will need new brake pads, tires, and filters (hundreds of dollars). But a car with 150,000 miles may need a new transmission or steering column (thousands of dollars). And those significant repairs can end up costing more than a car is worth.
Mileage also helps paint a picture of how you used the car.
A three-year-old car with 80,000 miles on it may need more scrutiny than an average three-year-old car.
The lower the mileage, the higher the value. But selling with low mileage may not be the best option.
A new car loses the most value when you drive it off the lot and then again when the warranty expires. Those things typically happen below 30,000 miles.
If you buy a car and then immediately sell it, you’ll likely lose money without getting any use out of the car.
When your car has more than 100,000 miles on it, buyers will be a lot more critical.
A light knocking sound is much less problematic at 30,000 miles than 130,000 miles.
Cars stay in great shape past 30,000 miles, but that’s when their value begins to steadily decline year after year.
That’s when you need to decide if you want to keep upgrading to newer models every few years or if you want to get the most use out of your car before selling it.
The balance between maximum use and maximum resale value for most cars is around 75,000.
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Finding the perfect mileage to sell your car is a little like Goldilocks and the three bears. You have to decide what’s “just right” for you.
Before you decide to sell, you must know how much money you’ll make.
To know that, you’ll have to determine how much equity you have in your car. Your car’s value and how much money you’d make if you sold it are two different things. Let’s start with a definition.
Simply put, equity is how much money you can get paid for something you own.
So let’s find out how much equity you have in your car.
You probably know your car’s estimated value by now, so jot that number down.
If you still haven’t determined your car’s value, google the make and model, and maybe use an online estimate tool. Finally, adjust the number a few thousand dollars either way based on your current mileage.
If you still owe money on your car note, your loan payoff amount could be higher than your loan balance, depending on interest and early payoff penalties. Call the bank that holds your auto loan and they’ll be able to tell you exactly how much you’ll owe if you pay in full.
Since your lender is likely holding the title to your car until the loan is paid in full, you’ll need to pay this off immediately when selling your car.
Have you used your car as equity to take out any other loans like a title-for-cash loan? Check with that lender (or try to go ahead and pay the balance) to see how much it will cost you to pay off the additional loan. It will also have to be paid when you can sell.
Now for the math, but don’t worry. This is one of the easiest math problems you’ll ever have to do. Add up everything you owe, and subtract it from your estimated sale price like so:
Value – (Car Note + Lien) = Equity
If your car is worth more than you owe, congrats. You’ve got equity in your car, which means you’ll have money left over after the sale.
With a little bit of saving you may be able to sell your car and pay all your loans in full just in time to shop for a new one. Or you may want to wait until you’ve made a few more monthly payments.
Shameless Plug: Either way, when you’re ready to sell, we’ll make it easy.
