Did you know that the timing of when you sell your car is one of the key market conditions that can significantly affect its value and your ability to sell it?
Surprising as it may be, most people don’t consider timing when planning to sell their vehicles. While there are many strategies to ensure a quick sale at your desired price, one often-overlooked factor is the time of year.
Just a few months’ difference can greatly impact how quickly you find a buyer and how much money you take home.
So, when is the ideal time to sell your car? To simplify matters, the best time of year is typically when your target market is most likely to be buying. Deciphering this, however, involves understanding a few critical factors:
Petrol Prices
Fuel prices at the time of sale can have a significant effect on your car’s marketability. When fuel prices rise, larger, fuel-hungry vehicles are harder to sell, while smaller, fuel-efficient cars become more desirable.
While you may not always have the luxury of waiting, fuel prices often fluctuate within a month or two, so holding off can sometimes help.
Sell in Spring
Spring is the season when Australians transition out of their laid-back hibernation and into a mindset of productivity, this includes buying cars.
It’s the same reason the real estate market tends to heat up during spring. In contrast, summer holidays, particularly around Christmas and January, see the country slowing down, making this period less favorable for car sales.
Target Market Behaviour
Understanding your target market and their motivations can help pinpoint the best time to sell. For example, convertibles and sports cars see a spike in demand during the warmer months.
Vehicles popular among students, on the other hand, tend to sell well in November, as parents often purchase cars for their children at the end of the academic year.
Similarly, February marks another peak as the new school year begins, with many families looking for reliable transportation.
The end of the financial year is a critical period for dealerships, as they ramp up promotions and discounts to meet their revenue targets.
During this time, many buyers are drawn to the deals on new cars, which can reduce the value of used vehicles like yours.
However, if you’re trading in your old car for a new one, this period can work to your advantage. Dealerships are often eager to secure sales, making them more likely to offer you a better trade-in value.
Anytime Other Than The First 3 Years
Depreciation is the most significant financial factor to consider when selling a car. A new vehicle loses approximately 11% of its value the moment it leaves the dealership, followed by an annual loss of 15–25% over the next five years.
By the time a car is five years old, it’s typically worth about a third of its original price. This makes the first three years the worst time to sell, as depreciation is at its peak.
If you’re also financing your car through a loan or lease, selling during this period often leaves you in negative equity.
Ultimately, the best time to sell your car will depend on the type of vehicle you own and your target market.
By using the guidelines above to avoid unfavorable months, you’ll increase your chances of selling quickly and maximizing your profits.