Sweet Spot to Trade / Sell Vehicles?

[Fishindude77]

We typically buy new cars & trucks and trade every 3-5 years. They're not worn out by any means, we just get the urge for something new. We pay cash and don't carry any debt so it's not a financial strain.

Just wondering if there is a "sweet spot" or optimum time in terms of mileage, age, etc. to trade and get the most out of the used vehicle, or if there is a point after so many miles or years you may as well just hang on to it?

[TexasHusker]

We typically buy new cars & trucks and trade every 3-5 years. They're not worn out by any means, we just get the urge for something new. We pay cash and don't carry any debt so it's not a financial strain.

Just wondering if there is a "sweet spot" or optimum time in terms of mileage, age, etc. to trade and get the most out of the used vehicle, or if there is a point after so many miles or years you may as well just hang on to it?

I used to own a car lot. There is really no sweet spot per se. Obviously a new car depreciates the fastest in the first 36 or so months of ownership in terms of actual dollars, and then the line begins to flatten out.

If a $40K car depreciated $5K a year from now on, obviously it would be worth zero in 8 years, which is rarely the case. A good rule of thumb is that a car is going to depreciate at about 12 to 15 percent EVERY YEAR FROM NOW ON, with normal use.

That isn't the car's fault. The car's useful life is getting used up. If you put it in a storage barn and sold it in 20 years, it would likely be worth at or more what it is worth on sale right now at the dealership.

Buying a new car is always the most expensive way to own a vehicle, but with that extra expense there are certainly a lot of benefits - latest safety features, no big $$$ expense for the first 3-4 years, etc.

Certain cars depreciate much more slowly than others; a Toyota Tacoma pickup's depreciation curve is very flat. The flip side is that you pay big bucks for a Tacoma pickup.

This is another "pick your poison" scenario.

Although I can categorically say that anything Mercedes, Chrysler, Hyundai, or Kia is going to fall much faster in value than the rest. Those cars can quite literally be worth little to nothing in 15 years.

[disneysteve]

As TH said, the steepest depreciation is in the first 3 years, so I think the best time to buy is at the end of that period. Let the person who bought new eat that depreciation for you. You get a gently used vehicle at a nice discount.

Best time to sell? Personally I find that somewhere around the 150K mark seems to be when cars start needing some more costly repairs but still have plenty of life left in them if you don't mind doing the work.

We bought our current van 2 years old, my last car 1 year old, and my current car 6 years old but that was kind of an anomaly. We've had the van for 5 years so far. My last car I kept for 14 years. I've had my current car for 6 years so far.

[corn18]

The last car I bought was a 3 year off lease with a whopping 14,000 miles on it. New MSRP was $65k. I got it for $37,000. So the first owner paid a lot for those 14,000 miles. It is spotless and still under warranty.

So that is going to be my target when it comes time to buy for my wife in a couple of years. Three year old low mileage cars seem to be the sweet spot.

[Fishindude77]

Reason I brought this up, I have a 2.5 year old Chevy pickup that just turned 60,000 miles. Nothing wrong with it, and I like the truck. Guess I'll hang on to it for a while longer.

[disneysteve]

Reason I brought this up, I have a 2.5 year old Chevy pickup that just turned 60,000 miles. Nothing wrong with it, and I like the truck. Guess I'll hang on to it for a while longer.

I definitely wouldn't be getting rid of a vehicle that I liked and wasn't giving me any trouble that only had 60K miles (although that is a lot for 2.5 years). I'd expect to get at least another 3-4 years out of it. Pretty much any vehicle today should be good for at least 150K miles if it's well taken care of, and the better vehicles (Toyota, Honda) should be good for 200K or more. A woman I used to work with had over 330,000 miles on her Corolla when she replaced it.

[TexasHusker]

Reason I brought this up, I have a 2.5 year old Chevy pickup that just turned 60,000 miles. Nothing wrong with it, and I like the truck. Guess I'll hang on to it for a while longer.

I don't know that I have ever traded a car because it was giving trouble. I have only traded when I started hanging out at the car lots looking at all the new merchandise.

I am a car lover, and there are always cars in the back of my mind that I would like to own - at least for a time. Last week when I was in VA, I rented an Infiniti sedan of some sort and that thing was a little rocket and fetched about 27 mpg. I can see me owning that car someday.

Right now I own a 2010 Toyota Landcruiser, Amazon Green. I have worked hard to keep it in "like new" condition. It has 105K miles but it will go 500K with no problem at all. It is a very rare color - there are only about 3000 LCs sold per year in the US, and only about 30 of those are Amazon Green. I still really like it so I'm keeping it for a good while yet.

[Fishindude77]

In our business we would run pickups for approx. 10 years, 250,000 miles with very little problem, so no concern about it crapping out on me. I've overheard folks in the past say things like .... once they pass XX,XXX miles the value really drops. Doesn't sound like that is the case here.

[disneysteve]

I've overheard folks in the past say things like .... once they pass XX,XXX miles the value really drops. Doesn't sound like that is the case here.

Well there is a difference between the resale value and the practical value, so it depends what they were referring to.

[TexasHusker]

In our business we would run pickups for approx. 10 years, 250,000 miles with very little problem, so no concern about it crapping out on me. I've overheard folks in the past say things like .... once they pass XX,XXX miles the value really drops. Doesn't sound like that is the case here.

That is a myth. Back in the day when a car was pretty much used up at 100K miles, you saw more of that - a dramatic dip in value at certain points.

Cars today, with exception of Chrysler, Fiat, Hyundai, Kia, and Mercedes, are good for 250K miles minimum, with the Japanese makes good for 400-500K minimum. The Toyota Landcruiser is engineered for a life span of 30 years in a third world country.

As a side note: Ironically, Mercedes was at one time the longest-life vehicle in production, and its resale value was exceptional. But consider this: In 1990, an entry-level Mercedes sedan was priced in the low $30s. Today, it is still in the low $30s. That means Mercedes made some substantial compromises during that time; much of the guts of a Mercedes is now cheap parts from Korean and Chinese manufacturers. There isn't much German to it. The Mercedes is now considered a "throw away" car; lease it until the warranty expires, then ditch it. Most Mercedes are now lease vehicles.

Anywho, depending on the model you choose (aside from the aforementioned makes), you can plan on a 10 to 15% decrease in value each year from now on, assuming normal annual mileage.

That's big dollars in the first few years, and small dollars in the later years.

[LivingAlmostLarge]

So is the sweet spot three years? I bought a 2 year old car at the end of 2017 that turned "3" in 2018. It seemed a good deal. $28k for a car that is $45-50k new.

I'm hooked. I think from now on that's where I am landing around 2-3 year old cars that have some depreciation. Granted it's depreciating now as well, but I figure if i even keep it for 5 years then it will depreciate but not as badly?

I'm really terrible about figuring out the car thing. I sort of want the car i want.

[greenskeeper]

We typically buy new cars & trucks and trade every 3-5 years. They're not worn out by any means, we just get the urge for something new. We pay cash and don't carry any debt so it's not a financial strain.

Just wondering if there is a "sweet spot" or optimum time in terms of mileage, age, etc. to trade and get the most out of the used vehicle, or if there is a point after so many miles or years you may as well just hang on to it?

Sounds like you'd be the perfect candidate for leasing since you trade them in around the length of a lease.

[greenskeeper]

Cars today, with exception of Chrysler, Fiat, Hyundai, Kia, and Mercedes, are good for 250K miles minimum, with the Japanese makes good for 400-500K minimum. The Toyota Landcruiser is engineered for a life span of 30 years in a third world country.

200k is reasonable for the majority of vehicles with proper service. Most drivers want something new or get tired of driving the same vehicle long before the vehicle is worn out. Ask yourself....how often do you see a vehicle disabled on the side of the road?

30 years in a 3rd world country wouldn't even be 50k miles

[disneysteve]

Ask yourself....how often do you see a vehicle disabled on the side of the road?

Pretty much every day. What's your point?

The average age of cars on the road in the US today is nearly 12 years, the highest it's ever been.

[greenskeeper]

Pretty much every day. What's your point?

The average age of cars on the road in the US today is nearly 12 years, the highest it's ever been.

It's been years since I've seen a vehicle disabled on the side of the road, and I live in the philly suburbs

My point is that vehicle and fluid technology is so advanced that practically any vehicle will last a LONG time before failure, and most drivers get tired of the vehicle and trade it in with lots of life left