When is it considered a good time to trade in?

[tomato]

Does anybody have any data, opinions or advice on when is the best time to trade in or sell a used car like the Yaris? Is it 1 year? 2 years? 5 years? Depending on mileage? Combination of mileage and years?

I know cars depreciate the most during the first couple of years but then after that, is the depreciation rate about the same for each passing year?

I saw that Tom (YarisOwnersDad) was telling us in his thread that he took a bit of a beating when he traded in his Cobalt because it was 'too soon after purchase'. So I'm wondering when would it have been the "right time" to trade in to get most of the value out of the used car?

I have a Yaris 2007 LB 2 dr, w/ about 56K miles. I purchased the car used, a couple of months ago at a dealership, in excellent condition inside out (minus little paint chips). I drive very little these days (probably 3K to 5K miles a year), because I live in an urban environment, and I try to take public transportation a lot and only use my Yaris just for errands and to get out of town on the WE's. So I guess the depreciation on my car would come from time passed rather than mileage (although the car already has a few miles on her).

I guess I'm wondering how long I should keep this Yaris.


I know there are a lot of variables that affect the value or used cars and stuff, but I'd love to hear all your ideas, opinions and data, if you have it, or trade-in stories.

Thank you.

[Loren]

Given your situation, I think you should keep the Yaris forever. Why would you bother trading in a car that you only drive 5k miles per year as long as that car is reliable and meets your needs?

But, to answer your question, you simply should never sell a car for less than you owe on it, or if you don't owe anything on it, you shouldn't sell it for less than it's worth. Trading = selling the car to a dealer. So, if you bought your car a year ago, you probably got a loan on it and you owe money on it. How much do you owe? How much is the car worth?

I can answer those questions on my car for an example. I owe less than $7k on it and I could probably get at least $8k in trade on it (low mileage 2007's are selling for anywhere between $9k and $12k around here). So, even though I've had it for only a year, if I wanted to, I could justify trading it.

Of course, if I look at it from a different perspective, I'd definitely be losing money to let it go for $8k, even though the loan would be paid off. I put $2k cash down on the car, and I've made $3600 in payments on the car. That's $5600 that I have invested in the car and I'd only see about $1000 of that if I sold it for $8k.

Best bet: Never trade in a car. Ever. Sell your car on the open market, that way YOU make money on the sale, not the dealer. (and while you're at it... never buy a NEW car, but a low mileage used car that's been well cared for)

But, whatever you do, you only have to answer to yourself. If you're comfortable with the deal and can afford it... have fun. Personally, my pet peeves are paying interest and getting a decent value for my money. I try to get the shortest and smallest loan possible to get the job done with minimal interest. My current car loan was $10,000 for 3 years at $301/mo... it's costing me right about $500 total in interest, and I'm okay with that. I paid $10,300 for my Yaris with 5k miles on it when new ones were going for almost exactly $2k more, I was okay with that, too.

Tom was in the typical "new car" situation. When you buy a new car (or pay too much for a used one from a dealer), the car depreciates immediately and isn't worth what you owe on it. With typical 5-year car loans, that situation usually does not equalize until the loan has been paid on for about 2 years.

[1NZYaris1]

that really depends on the current eco conditions , ie i paid $14,990.
driveaway for my yaris 2008 and it reatailed at $19,990+ taxes at the time
they are now retailing at $20,990+taxes for the 2009 3dr L/B 1.3ltr
2006 models 1.3 5spd 60,000km selling at $14,500 - $16,000
don't figure.

i was offered a straight swap 3 weeks ago for a 2009 1.3 5spd
but i was not allowed to remove my mod's so said no.

[thebarber]

cars depreciate the most within the first 3 years....so youll take a royal beating on trade-in value or selling price (especially vs what you owe) if you get rid of the car in that time frame...

but youre always best keeping a good, realiable car that fits your needs...

[MadMax]

The longer you keep it, the better return on your money you are going to get. The only thing that starts to factor against that is when the cost of maintenance starts to climb...

[tinymilad]

NOW, with the economy, you can get a great deal. :)

[nemelek]

Buying and selling cars is expensive. Taxes and other fee will never be recouped. The longer you keep a car the more it pays for it’s self. I had a 88 Toyota truck I bought for 12k and sold 18 years later for 3k. The truck cost $500/year. (12 - 3 /18) A lot depends on the skill of the person doing the deal. Paying too much in the first place or wanting a new car so bad that a fair trade in value wasn’t achieved will cost a person money. Trading a car in will cost more than selling it on your own.

I have owned over 25 cars in my life time. When buying a used car I always looked for low miles. I would never buy a car that averaged over 10,000 miles/year. To me a car that is 4-5 years old with 40,000-50,000 miles is the best used car buy. Therefore the worst time to sell a car. I bought a 4 year old Honda DelSol and drove it 2 years 20,000 miles and sold it for $200 more than I paid for it. I bought my wife a 4 year old BMW Z-3 with 14,000 miles. Sold it 3 years later to a privet party with 29,000 miles for $1,500 less than I paid. Trading the car in would have cost 6,000 less than I paid.

I have traded cars in before. I traded in a 92 Lexus with a bad transmission for the Yaris. The transmission would have cost 3-4k to fix. I would have felt bad selling it to a privet party. In Colorado the difference between sale price and trade in is what we are taxed on. At 7.5% that can be a consideration.

The cost of transportation is expensive. Gas, deprecation, insurance, maintenance, purchase price, mods and things all add to the cost. Some people are willing to pay the price and drive a new car every 2 years. Others will buy used and hold on to the car for 10 or more years.

[brainless twit]

In my opinion, the right time to trade a car is when it's falling apart and you absolutely MUST buy a new one.

I drove my Honda Accord until I couldn't trust it to go more than 20 miles or so. No A/C, no speedometer/temp gauge, drinking oil, would only start when it felt like it... It wasn't uncommon to find myself stranded at the grocery store for a few hours until it would run long enough to pull out of the parking spot. Sure, I only got about $500 for the poor thing, but I hadn't had a car payment in seven years.

[voodoo22]

When it costs more to repair than it's worth, even then it might be better to repair it.

[tomato]

Originally Posted by Loren

Given your situation, I think you should keep the Yaris forever. Why would you bother trading in a car that you only drive 5k miles per year as long as that car is reliable and meets your needs?

Thank you very much for your detailed answer, Loren. I'm relatively new to the world of trading cars (Yaris was my first acquisition through a dealer) and reading about people's experiences helps a great deal to understand the process.

To answer your question honestly (hold your flames everybody ): because while I think the Yaris is a good little car overall (wouldn't have bought it otherwise), I think in the long term I'd feel more comfortable with a car that has just a tiny little bit more power under the hood.

Not that I'm drag racing or driving like a jack rabbit or anything, but in certain driving situations (like trying to merge in and out of a busy freeway or change lanes when @$$holes in far more powerful cars won't let you, or trying to get out of the way FAST if you have to for whatever reason) the Yaris lacks the acceleration necessary to do it and it makes me feel somewhat vulnerable on the road.

If I still lived out in a rural area, I wouldn't even think about another car right now because in my opinion, the Yaris is ideal for driving on backroads, but for this area with crazy freeways with merging lanes and all that other city driving non-sense, I don't know, I sometimes feel that the Yaris is a little borderline

So anyway, that's why I'm keeping an open mind about trading for other similar cars that may show up on the market.

I've always purchased used cars long out of manuf. warranty in the past, and was looking for a 2 to 5 year old car to replace my old 1987 Honda CRX HF, 5 speed, because she was starting to show her age and demand more costly repairs; but in this economy, people are hanging on to their good used cars so I ended up including dealerships in my search.

There are not very many hatchback, subcompact, manual transmissions out there, and that is the style I really love. I test drove the FIT (which was probably a better car for me) but the Yaris costs less and, I don't know, I had a connection when I saw her on the lot, I don't know how to explain it, probably visual appeal, so...

I paid off the Yaris right away because financing was too expensive at the time of my purchase so I don't owe anything on it. I'm a little jaleous of the people who can take advantage of the 0% financing they have right now, to be honest ;)

Trading in has one advantage: you get an immediate release of liability. The dealership gave me $500 for my CRX (I almost walked out the door when they offered me $100 so they upped the price a bit.) I may have gotten maybe $700 on Craigslist for the CRX but not much more, so no enormous loss, I guess.

I sometimes wonder if I should have gotten the Matrix or the Fit instead.

[nemelek]

Originally Posted by tomato

I think in the long term I'd feel more comfortable with a car that has just a tiny little bit more power under the hood.
:

There are people in this forum that with mods have gotten more power.

[KCALB SIRAY]

Neva!

[Ramblin yari]

I turned down 0 percent financing on an 09 sedan selling at invoice. No discussion as to what they would have given me for my 08 sedan with power package. That was probably the rub that would have rubbed me raw.

I'm convinced that I really want an automatic now. It's just not the right time for me.

[tomato]

Originally Posted by nemelek

Buying and selling cars is expensive. Taxes and other fee will never be recouped. The longer you keep a car the more it pays for it’s self. I had a 88 Toyota truck I bought for 12k and sold 18 years later for 3k. The truck cost $500/year. (12 - 3 /18) A lot depends on the skill of the person doing the deal. Paying too much in the first place or wanting a new car so bad that a fair trade in value wasn’t achieved will cost a person money. Trading a car in will cost more than selling it on your own.

I have owned over 25 cars in my life time. When buying a used car I always looked for low miles. I would never buy a car that averaged over 10,000 miles/year. To me a car that is 4-5 years old with 40,000-50,000 miles is the best used car buy.
...

The cost of transportation is expensive. Gas, deprecation, insurance, maintenance, purchase price, mods and things all add to the cost.

I'm with you!

Most people I talk to also say that I shouldn't have bought a car with so many miles.
I didn't think it mattered in my case because
1) it's a Toyota, made to last long, probably will go over 200,000 miles
2) she looks like she's in excellent condition and passed the mechanical inspection like a little champ
3) I don't drive as much as I used to, so I will not be adding a lot of miles myself.
4) Frankly for me, compared to the other cars I've driven and owned, 55K is very low!!

I figured that if I keep the Yaris a couple of years, then it would have the "normal amount of miles" for a car her age, but would still be in excellent shape because I don't drive her too much, so hopefully wouldn't depreciate all that much.

Of course, I might have reasoned differently if I still lived out in the Country, where I used to drive on average 50 to 100 miles a day.

I also thought of keeping my old Honda, too but I had started to spend some serious maintenance money already. It cost me close to $1000 in repairs in December (blew a radiator in traffic right on the Bridge going to SF and the cooling system had to be changed, among other things). The timing belt was overdue, plus she needed tires, had carburetor problems, and of course no guarantee that she would pass the SMOG test, so faced with that, and based on the fact that the economy is making it hard to find good used cars right now, I decided to take a chance w the Yaris instead.

I saw the later post suggesting modifications. I guess that's a possibility, too, but mods add up as well, like you said, and since I don't have the skill to do it myself, I don't know if it's a good idea in my case.

[tomato]

Brainless Twit, I have driven a few cars just like your old Honda Accord, and know exactly what you're talking about!
I sure hope someone who likes to "play" with cars is fixing up my old CRX right now and having as much fun driving her as I did
I know I talk about my old CRX a lot on this forum so here is a pic of what she looked like in case you're curious. Sorry, haven't figure out how to reformat the pictures to make them fit. She looked worse from the front, had duct tape on the nose, but from this angle, not too bad, no?

[tomato]

I had another question, too.

What other sites do you check to figure out the value of a new or used car besides

Kelly Blue Book
Edmunds.com

Thank you!

[nemelek]

For used cars I check Auto Trader, Yahoo Auto or Cars.com. You wont get a real value, however, you can see what others are selling their car for and get a feel for the market.

[tomato]

Originally Posted by nemelek

For used cars I check Auto Trader, Yahoo Auto or Cars.com. You wont get a real value, however, you can see what others are selling their car for and get a feel for the market.

Yeah, that's true, that would work too. Thanks!

Just to be clear, I'm in no hurry to give up my little Yaris!



Just trying to be a more informed customer so if a good opportunity knocks at my door, I know what to do.

I really appreciate all the input. Thank you all very much.