Every year hundreds of thousands of cars change hands in Australia. You may also be wondering whether you should keep your car or sell it. In this article, you will find a decision aid!
Having your own car is extremely important for many people today – not only for leisure but often also for commuting. A personal vehicle ensures that we are more flexible and therefore we don’t want to be without a car. But the decision whether to sell or keep the long-standing, always reliable car is basically a difficult one, because over time our car becomes a companion we have come to love. Unfortunately, at some point, the ravages of time also catch up on the car and as soon as the first serious defects appear, it often no longer makes sense to continue driving the car yourself.
So the question is whether to keep the car or sell it at a certain mileage. But when is it really worth thinking about buying a new car and selling the old one? What do you have to consider when selling a car and when is it best to buy a new car?
How long a car should be kept depends on a number of factors. While in the past a car with a mileage of 80,000 – 100,000 km had its best days behind it, today’s models can of course do a lot more and car repairs are often worthwhile even after several years of use. The mileage of the car is still in the green range at 150,000 km and there are usually only a few visual defects.
So when should you, ideally, part with your car and consider buying a new one? You should definitely consider the following criteria when considering:
Cars are much more durable today than they used to be, so a car can easily be driven for up to 10 years now. In contrast to that time, this shows a clear technical change in the automotive sector.
At best, you should first draw up an exact statement of costs. Calculate how much money you have to spend each month on repairs and then compare the total with the costs for a new car. Not only the mileage of the car is an important point, but also the age determines the residual value. New cars lose around 22% of their purchase value in the first year, which is certainly one reason why most people drive their car for an average of six years. It also makes a difference whether your car has already been paid off in full. In the event that the car is already 100% in your possession, you can deduct the residual value from the purchase price for your new car.
What about security? Is your old car absolutely roadworthy? Are the tires OK? The exhaust system? What about the brakes and other wearing parts? Do they have to be repaired or replaced in the near future? Are there any safety concerns, such as poorly functioning seat belts or airbags? If you are seriously worried about your safety in your car, a new acquisition certainly makes sense, because a new car is of course much more reliable as a rule. In addition, it is usually better and more pleasant to drive.
If you decide to buy a new car, you should also pay attention to a few safety-relevant points here. When you buy, do you get a guarantee that initially covers all necessary repairs so that there are no additional maintenance costs?
Please consider: You can save a lot of money with regular maintenance work. Testing the fluid levels or regular oil changes keep your car in good shape and ensure that expensive repairs are avoided. Do you know someone in your immediate environment who can do this work or can you even do it on your own? Then of course you can also save costs here.
How regularly does your car have to go to the workshop? Have you possibly had a major and expensive repair recently carried out that will keep your car running for a while? Then at best you should keep your car. But if your car pulls the money out of your pocket with regular repair costs for small defects and these are perhaps even more expensive than the monthly payments for a new car, your bill clearly indicates that you should look for a new car .
Nowadays, new cars don’t have any weak spots unless they come from poor production. Fortunately, this is not the rule with most manufacturers, so that the question does not arise of whether to scrap or keep a five-year-old car.
When it comes to the question of whether you should keep the car or sell it, you can often use a guideline as a guide: In general, you should only continue to drive your old car if the planned and upcoming repairs are not more expensive than half the residual value of the car . A repair is only worthwhile if this is the case. If this value is exceeded, it is better to sell your current car, otherwise you can quickly fall into a cost trap.
When deciding whether to keep or sell your car, you also have to think about how long you should drive the car at all, because a car has a drop in value of almost 65% after registration. So you should expect a high loss if you sell a car in the first five years. In the following 5 years the residual value will drop again by around 25%. So if you decide at this point, you will lose 90%.
Therefore, it is worth driving a car of such an age to the bitter end. In any case, keep in mind that minor repairs will not increase the sales value of your car. If your car has a residual value of 400 dollars and you have the air conditioning replaced for around 200 dollars, that doesn’t mean that your car is worth 600 dollars as a result. The residual value of the car always remains the same, the only difference being that you have spent some money in advance – so again a loss!