When you have just bought your car, you always find yourself staring back at it when you park it, or running a hand along it. This is because at this stage in its life, it is still very valuable and you are proud to be the owner of such an asset.
However, the value of a car depreciates rather quickly due to use as well as the release of newer and better models from the car manufacturer. It is, therefore, a conundrum trying to decipher the right time or stage in its lifetime to sell the car.
You could decide to trade in your car every five years so that you have a relatively new car over a span of 10 years. According to the information on Equities.com, this would lead to a greater loss through depreciation in the car value.
An alternative to this would be to keep your car for a longer period of, let’s say 10 years, because the rate of depreciation would reduce in the later five years. Even if an older car would require more costs as regards maintenance, the savings accumulated in the later 5 years would more than sufficiently cover this.
Financing or leasing
Leasing would require one to pay a lot more money because the lessor accounts for the depreciation that the car will go through and therefore charges you for it. At the end of the lease time, if you would like to keep ownership of the car, the lessor would charge even more to grant you said ownership.
On the other hand, financing is easier and less expensive in the long run. Getting a slightly older car is also a great option since it has depreciated and is thus affordable.
Maintaining a luxury car in the evening of one’s life can be costly and it is, therefore, more logical to trade in this car for a more affordable one.
