Sales
Sales: Closed
Service/Parts
Service: Closed
“Should I keep my car or trade it in?” is a question every car owner will ask at some point during ownership. Most drivers who purchase a new vehicle drive it for about eight years before they consider upgrading to a newer model. Like most brands, both Buick and GMC strive to stay on the cutting edge of automotive technology and keep their vehicles modern with over-the-air software. Still, in five to eight years, new and improved technology systems are likely to become available to entice buyers. So, if you’re ready for innovative new features like Super Cruise and CrabWalk, should you trade in your vehicle?
The decision to trade in your vehicle involves a lot of factors, including its age, mileage, current equity, and so much more. Without all this information, it’s hard to determine if now is the right time for you to trade in your vehicle. However, we’ve compiled a list of things you should review before making the final decision.
Every vehicle depreciates, especially during its first few years in use. According to Kelley Blue Book and Cox Automotive, the average depreciation cost for the first four years off the lot is as follows:
If you’re basing when you should trade in your vehicle on depreciation and value, consider trading at a point during its lifespan when you can recoup the highest amount of your investment. This is a hard thing to balance, especially if you are like most car owners and you’ve financed your vehicle. If you trade in your vehicle during the first two years of ownership, the vehicle will likely be worth less than the amount you still owe on it, meaning you have negative equity. However, waiting a few more years for the depreciation rate to slow down and to build additional equity could make a trade-in more advantageous. If you wait too long, however, it will eventually drop to its scrap value or the amount you would receive if you were to sell it to a junkyard for used parts.
Most people in the automotive industry have accepted 12,000 miles as the average mileage most drivers put on their vehicles each year. Your vehicle’s mileage is a big factor when dealerships consider its value. If your vehicle has more mileage than it’s estimated to have at its age, that may negatively impact how much it’s worth. However, the opposite may be true if your vehicle has less mileage than expected.
The final major metric for determining your car’s worth is its condition. Service technicians at David Scott Lee Crestview Buick GMC will assess your vehicle for its mechanical condition as well as aesthetics. If you’re trading in a vehicle during its first three years on the road and you’ve adhered to its factory-scheduled maintenance plan, it’s likely still in excellent condition. After about five or six years, most models have minor cosmetic damage and are likely considered to be in Good but not Great condition.
You can use these factors to help you determine when the peak time to trade your vehicle is, or you can use car valuation software like our Value Your Trade tool. If the value of your vehicle exceeds the amount you still owe on the vehicle, there is nothing to lose by trading it in. At this point, it's completely up to your situation. On the flip side, it’s best NOT to trade in a vehicle that has a lower value than what you still owe on your loan. In the finance world, this is what’s called being “upside down” on a loan. You will either need to pay the remaining balance or roll it into your new car loan, instantly creating additional negative equity when you drive the new vehicle off the lot.
If you do decide to trade in your vehicle, it’s best to do so in the first quarter of the year. The vehicle will seem newer at the beginning of the year and thus more appealing to prospective buyers and dealerships.
Every situation is different, and if you’re considering trading in your vehicle, you should speak with an expert. Visit us at David Scott Lee Crestview Buick GMC for a more tailored analysis of your trade-in options.