How do you know when the time is right to trade in for a new car? What are the signs that your current car is on its last legs? How does your personal financial situation figure into your decision to get a new car? Should you trade in an older car for a new model and new car payments? If your car is paid for what are the considerations in choosing to trade in for a new car?
Value Your Car before you Trade in For a New Car
First you need to determine the value of your existing car. How old is it and how many kilometres does it have on it? These are the most critical factors to what you will get for your car in a trade in for a new car. If your car has high mileage and low age you better trade it quick, as it will have already depreciated greatly.
If it has low mileage but is high in years you should trade it, as you will get good money as a trade in.
The typical situation for most people is high mileage and high years or medium mileage and medium years.
Do you have equity in the car? Most cars depreciate as soon as you drive them off the new car lot. If you have equity in your car then this is a great time to trade in. You have equity when you are still paying off the car, but it is worth more than you owe. This is the best time to trade. It is not good to trade if you owe more than the car is worth because that extra will be added to your new car loan.
Condition and Repair Costs
What is the condition of your car? Are you racking up a bunch of high repair bills, or do you know for certain that you will need a lot of repairs in the next six months? This tends to occur at around 80,000kms and these repairs can make your car cost more than you want to spend to keep it. If you are paying more to repair it, or if you are budgeting for more than a new car’s monthly payment, now is the time to trade in for a new car.
Can you afford a new car? If you are not making any monthly payments on your current car, can you afford the payments on a new car? Do the maths before you start looking at new cars and new car financing. Should you purchase or lease? Do your homework and know what different dealers have to offer in both the trade in and the financing options.
This might be the most important factor in your quest to know when the right time to trade in for a new car is. If your car has reached a point where it is no longer safe or even beginning to show signs of this then trade it. Remember you can always replace old tyres or worn out breaks. It is much more expensive to replace the transmission, the drive chain or the power steering. When these start to go it is time for the car to go.
The right time to trade in for a new car is when you have equity in your car, you can afford a new car, repairs cost more than a new car’s monthly payments and/or your car is no longer safe.
Once you have decided to trade in your car give us a call and one of our experts will discuss your options with you.