Can one sell a car without any depreciation in its value? How to make a profit in selling the car? When is it ideal time to sell a car? What factors should we take into account in determining the resale value of a car?
If you have these questions in your mind and want to know the answers for these then this is the right place for you.
Yes. You can make the most out of the transaction of selling a depreciating asset like a car. But one has to carefully decide when and whom he has to sell the car.
Unlike in the real estate business, where our invested money grows by leaps and bounds, the money that we spend in buying a car will not yield any profit. It is also a known fact that in whatever immaculate condition the car is kept, still its value depreciates over a period of time. Some car owners want to use their car for a long period and sell it for scrap. These are not bothered about making any profit on it. In spite of knowing the fact that the car value depreciates, many car owners would be exploring different ways to know how to sell a car without much loss.
For those who do not want to incur a loss in selling their car, here we have come out with a few but very effective tips to guide you in when and whom to sell your car. These tips make the process easier and fetch you a profit.
1. Is car valuation affected by COE?
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Many factors come into play to determine the valuation of a car such as the distance travelled by car, the year of make of the car, the pristine condition of the car, and how many were its previous owners were. In addition to these, one key factor that plays a crucial role in determining the valuation is the existing COE prices. At the time of selling your used car, if the existing COE prices are higher, then there are higher chances of getting a higher price for your car. The reason behind this is because of the further increase in COE prices, the new cars will be beyond the affordability of many buyers. The buyers will satisfy themselves in buying the used cars which fall in their affordability range. As the demand for used cars increases, their prices also increase. Hence, there will be high demand for used cars when the current COE prices are higher.
And also, two points which you have to keep in mind to make a profit are when you bought the car, its COE should not be higher than the current COE prices or the COE prices at the time of selling. It's better if you drop the idea of buying a new car, as again its COE price will be higher. So, it’s better if you buy a second-hand car. Then you will not be at loss in the overall transaction.
2. When will be Depreciation more?
It’s highly impossible to get a good price for your car in the very first year of purchasing it. Instead of buying a one-year-old car that costs almost the same as the new car, consumers prefer to buy a new car as they have to shell out only a few extra bucks and get a new car. It’s known to all that, when you own a car, every year its value depreciates and depreciation is the most expensive cost of it. But, in a span of 10 years, the rate at which the car’s value depreciates will not be the same. Usually, the rate of deprecation will be very high in the first three years and from the 4th year onwards it will not be very high and starts to stabilize. Unless selling the car is due to some unavoidable reasons, do not sell it in the first 3 years. From the 4th year to the 8th year is the ideal time to sell a car because the condition of the car will be still good, and a considerable amount of COE would be remaining. As the car gets older, some important parts of it will be wearing away and as a result, you need to bear huge repair costs for the replacements. According to some experts’ advice, it is better to start selling the car from the 4th year onwards where the depreciation rate stabilizes.
2. Whom to sell?
When you buy a car from a dealer or direct owner or consignment agent, each one has its own advantages and disadvantages. In the same way, you can sell a car through any of them and it also has many plus and minus points. But once you decide to sell your car, plan ahead to whom to sell or trade-in your car as you will have the chance to weigh the pros and cons of each way of selling and you can make the most out of it. It’s not worthwhile to wait for a longer time as the value of the car depreciates. You might be looking for the best way of selling where you would be getting most of your money back, then it is certainly to a direct owner. There will not be any hidden costs, commissions, or agency fees. But you have to spend a considerable amount of time, as you have to do all the paperwork, handle inquiries, viewing, etc.
Do you really have time and patience to do all these? If you have, then go ahead as you can make money on it. Otherwise, you can sell or trade-in through the consignment agent or a dealer who will do the entire paperwork, handle inquiries, etc., and this method is a faster, convenient, and time-saving process. There will be some cut-off from the sale proceeds as they would be charging some commission. So, be prepared to let go of that share of money as it saves you a lot of time. One more way of selling your car is an Auction Platform where the entire process will be done by them and you also will be making a good deal out of it.
However, as long as some shady dealers and consignment agents are there who want to exploit you by showing some lowball offers. All these methods have their own drawbacks and none of them gives you a foolproof guarantee that you would make a good deal out of it.
We at BRZE with our committed and expert staff would be able to guide you on which is the best time to sell your car so that you can make the most out of it, save your time and the entire process will be fuss-free.
Read More - The Pros & Cons of Trading-in and Selling a car