Maximize Resale Value: Best Time to Sell Your Used Car

A car is a depreciating asset and warrants a buying and selling cycle to maximise financial benefits from it. Selling a car at the right time is crucial to ensure you receive maximum resale value. What is the right time to sell your car then? Timing the sale of your used car wisely involves understanding many factors. These include depreciation, market trends, the car’s condition in terms of kilometres clocked and its aesthetic appearance. In this article, CARS24 explores the best time to sell a used car in India, with practical tips to maximise your car’s resale value.
 

Why Sell Your Car at the Right Time?

The value of your car starts diminishing right from the time it rolls out of the showroom floor. Add on time and usage along with factors like depreciation due to wear and tear, as well as market dynamics, timing the car’s sale becomes crucial. If you sell your used car too early, you may incur maximum depreciation while losing out on its long-term utility.

Sell your car too late and you might risk a drastically reduced resale value. The latter becomes of even more importance in Delhi NCR where the NGT rules dictate maximum lifespan of a petrol and diesel car. Knowing the right time to sell a car or trade it in for a new one, can significantly help in making a secure financial decision. Consider discussing your ideal time to benefit from selling a used car on the CARS24 auto community, AUTOVERSE, where there are more interesting automotive discussions taking place.
 

Factors Influencing the Right Time of Sale for Your Used Car

There are five key factors that contribute towards a car’s resale value. Taking care of these and accounting or preparing for them early on, during the ownership tenure, can get you a better resale value. These include –
 

1. Depreciation Curve
 

A car loses its maximum value rapidly during the first few years of ownership. Typically, depreciation is steepest in the first three years, with values dropping by approximately 15-20 per cent annually. By the fifth year, depreciation stabilizes but remains ongoing.

Selling your car during the three-five year window often yields the maximum car resale value, as the car is still relatively new but has lost its initial sharp depreciation as wear and tear of components has taken place over some time.

Time aside, the car’s condition in its time of use, further dictates depreciation and so does its manufacturer’s or the model’s reputation for reliability. A particular model’s frequency of maintenance, high cost of spares and the region or terrains that the car has been plied on will also factor in, to determine its depreciation.  
 

2. Market Trends
 

Market demand for cars always fluctuates throughout the year. This depends on the increase in purchasing power in some months while buyers restrain from spending in others. A car in itself, is considered a substantial purchase and isn’t frequent for most.

For instance, demand during festive seasons goes up substantially. Similarly, cars are more in demand during the end of the calendar year. Demand for cars typically goes down before monsoons or towards the end of the financial year as buyers wait for financial gains.

There are other factors like new car launches, tax revisions, or fuel price changes that influence used car prices. Thus, it’s essential to keep an eye on when the used car market is booming and that can help secure a better price for your car.
 

3. Condition of the Car
 

It’s vital to keep on top of car maintenance and having a low maintenance car is beneficial for resale. Cars with a clean servicing and insurance history i.e. non-accidental cars get better resale value. Similarly, well-maintained exteriors and interiors, recent servicing or fresh tyres, easily fetch higher resale value than ill-maintained or neglected cars.

In another instance, if your car requires major repairs before a sale, consider whether to sell the car in its current condition at a lower value or fix it for better value. Major repairs can be a red flag for buyers and will reduce your profits. Cars that have incurred rusting damage due to salty water (common in coastal areas) may not get good resale. 

A potential buyer will look to maximise the value they’re getting from the used car; thus the more value you can offer as a seller, the better margins you can command.
 

4. Mileage Considerations
 

A car with mileage under 50,000 km generally holds better resale value compared to a higher mileage car. Crossing 1,00,000 km significantly impacts its resale price as buyers factor in expenses in major services and replacement of worn out components.
 

5. Selling a Used Car in Delhi NCR
 

Prevailing NGT rules restrict a car’s RC renewal in Delhi NCR. A petrol car is only registered for 15 years and a diesel car for 10 years. Post this period the RC cannot be renewed in Delhi NCR and its validity will expire. Thus, timing a used car sale in Delhi NCR is also governed by this policy. A used petrol car closer to its RC expiry - a year before it’s required to be scrapped in Delhi NCR, will fetch very low resale value.
 

Signs That it’s Time to Sell Your Car

If you're aware of certain tell-tale signs that your cars will show from time to time, then it’s easier to ascertain the timing of sale for a used car. This will again help you get better value for your used car. The signs are – 

1. Rising Maintenance Costs - Frequent repairs and increasing service bills may signal that it’s time to sell the car and upgrade. Incurring high maintenance costs will offset the profits you can potentially gain from selling the car sooner.
    
2. Warranty Expiration - Cars under warranty attract better prices since buyers see them as low-risk investments. It is wise to opt for extended warranty packages for resale benefits and used cars too.
    
3. Depreciation Plateau - After five years, depreciation slows and remains steady. Selling during this period is ideal for getting better value for the car.
    
4. Changing Needs - If your family size or lifestyle changes, selling your car to upgrade to a new model can be practical. A car that’s better suited to your requirements will serve as a better investment vis-à-vis renting or purchasing another car. 
    
5. Fuel Efficiency Concerns - If newer models offer significantly better mileage, it might be time to consider selling your old car. Higher fuel efficiency cars help in lowering long term running costs. 
    

Tips to Maximise Value When Selling Your Used Car 

Keeping these five tips in mind to sell your used car can help you benefit in retaining a good resale value as well as maximising profits during its ownership –

1. Keep the Car Well-Maintained - Regular servicing, upkeep and minor cosmetic repairs enhance the appeal of an older car. Don’t neglect the interiors and sprucing it up before a sale will make it more attractive to a potential buyer.
    
2. Sell at the Right Mileage - Aim to sell your used car below 50,000 km if possible. If you clock higher mileage annually, then aim to sell it between 50,000-75,000 km irrespective of the number of years used. Lower mileage on the odometer translates to a less used car, thus fetching a better resale price.
    
3. Provide Detailed Records - It is wise to keep records of service as a maintenance history for the car. This offers transparency for the buyer, regarding the car’s condition, and helps build trust with them.
    
4. Time the Sale - Plan ahead for your used car sale as selling during high-demand periods can get you good profits. Ideal time to sell a car is usually around the festive season, marriage season or after the financial year ends.
    
5. Choose the Right Platform - Take multiple quotes from various dealers, individual buyers and online platforms like CARS24. This will help you assess the best offers and maximum value quoted for your car. This step is especially important when considering an exchange directly with the manufacturer of your new car.
    

Benefits of Selling at the Right Time

Selling your used car at the right time offers important benefits –

1. Get Higher Resale Value - Avoid selling the car during the initial period of ownership within the first three years. This will help you deflect the sharp depreciation incurred by all cars during that time. Selling the used car when demand is high thereafter, will minimise losses.
    
2. Save on Major Repairs - Offloading due expenses on major services saves costs. Most cars have major services scheduled between 40,000-60,000 km depending on the manufacturer. Thus, 50,000 km becomes the ideal mark to sell a car before spending on major maintenance costs. 
    
3. Upgrading Opportunities - Selling an older used car may have more benefits. A new car will help you in transitioning to newer technology, safety standards and better features overall while also potentially benefiting from lower maintenance and increased fuel efficiency.
    

Conclusion

Knowing the right time to sell your car is key to getting the best return on your investment. By monitoring a few important factors like depreciation, market trends, and your car’s condition, you can make an informed decision about the sale. Selling your used car at the right time not only maximises value but also ensures a smoother financial transition to your next vehicle. Keeping your car in good condition and maintaining proper service history can ensure that you get the best price for your used car.