Selling? Follow these easy tips
ARE you thinking about selling your car? Fernando Pinheiro, joint MD of online used car marketplace CarZar, says there are quite a few factors to consider when deciding the best time to part with your wheels.
“If you hold onto your car for too long, you will lose a good sum of your money due to depreciation of the vehicle, maintenance costs and opportunity costs.”
Pinheiro suggests asking yourself a few questions before deciding on the right time to sell.
Is the car starting to cost you too much?
If the vehicle is old, and requires a significant amount of money to repair it, or it keeps breaking down, it is time to sell.
If the vehicle is too expensive to run and is compromising your personal finance - instalments have become too expensive, fuel spending is growing, insurance premiums are on the rise - it is time to sell.
If the warranty is about to run out, sell your car before it ends. This will allow you to hold on to the value of the vehicle. Once the warranty is finished, the value will drop dramatically.
Similarly, if your service/maintenance plan is about to run out, sell your car before it ends.
If you are aware that your current model will be discontinued or the car maker will stop distributing in South Africa (like Citroën did, for instance) sell as soon as possible, as you can expect a drastic decrease in value due to the brand no longer being in the country, which brings about difficulties finding parts to perform proper maintenance on the vehicles.
Popular models like VW Polos and Toyota Corollas hold their value much longer - this is however dependent on the way the vehicle has been maintained.
If the vehicle is brand new when you buy it, try to sell within three years, as the plans will still hold value. A warranty generally lasts five years and this will ensure the value of the car doesn’t depreciate as much.
If the vehicle is older (between three and seven years) and it is out of warranty and service/maintenance plan, try to sell within two years.
Vehicles that are older than 10 years sell for about 50% less than their book value.
This is for two main reasons: 1) they will need more frequent maintenance and repairs, which will become very costly; 2) they are not granted bank finance, therefore dealers can only sell for cash which reduces the price the dealer will pay you.
Mileage has a strong impact on the price of the vehicle. The value of the car drops drastically if the mileage is more than 250 000 km, as well as the vehicle having more mileage than the expected average for the age and type of car. Around 25 000 km per year is the expected average for regular models anything more, and you can expect at least a 10% drop in market value.
Visit www.carzar.co.za to receive an instant quote on the market value of your car.