SELLING A CAR
When is the best time to sell my car?
03 August 2023
The timing of a successful sale may depend on a few different factors. These can include the value and condition of your car and the current second-hand car market.
When to sell newer cars
You may have purchased one for its ‘new car’ smell, shiny exterior, or even the peace of mind of the extended warranty – but most new cars rapidly depreciate in value within the first five years. One key factor in knowing when to sell a newer vehicle is keeping track of its value over time.
Average rate of car depreciation
Source: Casey Research
It’s no secret that 10-15% of a brand-new vehicle’s value disappears within minutes of leaving the dealer’s showroom – then another 10-15% a year later. Then for the next four years most cars typically lose 15-20% of their value each year.1
Unless you plan to keep the vehicle long term, getting the most value out of newer vehicles may involve selling your car:
- every three to five years
- ideally with less than 100,000kms on the odometer, and
- with 10-20% of the new warranty period remaining.2
The above points may give potential buyers peace of mind and may increase the selling price.
Cars that may depreciate differently
While most cars will typically follow the average rate of vehicle depreciation, there can be some exceptions.
These may depreciate faster than mid-range cars due to high retail prices and much greater repair and maintenance costs.3
Electric vehicles (EVs)
As EV technology is still developing and electric models remain generally more expensive than petrol ones, these cars tend to depreciate faster. However, some models such as the Tesla Model 3 currently depreciate a lot slower than a lot of other petrol vehicles.1 As the technology advances and the market grows, future EV depreciation rates may improve.
A muscle car or a restored vintage may actually gain in value over time due to rarity, performance, or unique attributes.
Should I keep my car insurance until the vehicle is sold?
If you have Comprehensive Car Insurance on your vehicle, consider keeping it covered until the end of the day on which you hand over the keys. This means you’ll be covered if any damage occurs before the ownership is transferred.
If you’re a Suncorp Insurance customer and you’re trading in your vehicle for a new one, you can add your new vehicle to your current policy and keep the tenure and any Claims Free Driver Rewards* that may apply.
When to sell older cars
Once a car has passed its five-year mark the rate of depreciation tends to level out, so there may be less value in rushing to sell.
After this point, the value of the vehicle is determined more by its mileage and general condition than its age. And there is often a significant drop in value once the odometer goes over the 100,000 kilometres mark. This is for a couple of reasons:
- It’s often seen as a psychological barrier – there are usually fewer premium buyers and more bargain buyers in this pool.
- People often associate extra costs with these cars such as tyres needing to be replaced or mechanical issues – like timing belt replacements – popping up.
Selling a car before it reaches this milestone may lead to a quicker and more profitable sale.4
Another general rule of thumb is that once a car is costing more to keep running than it’s worth, then it’s probably time to sell.
When to cut your losses and sell a lemon
If you’ve had your car for a really long time and it’s in bad shape, you have the option of either:
- getting it fixed to a ‘fair’ standard to try and sell, or
- try to sell it in its current state.
The difficulty with the latter is that you may have to settle for very little profit to get rid of it.
Depending on the state, you may also need a roadworthy certificate before selling the vehicle. For instance, you won’t need a safety certificate before offering a registered vehicle for sale in QLD, but you’ll need one when disposing of a registered vehicle. An exception would be if you’re selling it a licensed dealer or disposing of it at a junkyard.
If you choose to sell your lemon privately, make sure to be honest and upfront about the real condition of the car. Intentionally misleading buyers may lead to fines or a potential lawsuit.
The seasons make a difference
Choosing the right time to sell often means keeping an eye on supply and demand changes throughout the year. Time factors such as seasons, holidays and even when your car was first registered can affect selling it.
People often look to purchase cars in spring and early summer when they’re likely to be used for road trips or family vacations. Family cars may sell better in spring and autumn months when statistically more babies are born. The slowest selling periods can often be winter and during holidays.
What is the best way to sell my car?
Selling your car privately
There are some benefits to selling your car to a private buyer:
- You can set your own price and there is potential for greater profit if your vehicle is in high demand.
- Negotiate directly. You can discuss the price directly with the buyer and also list your vehicle on a ‘best offer’ basis – which can invite more buyers to put forward an offer and increase your options.
However, the process does come with some additional work and risks:
- It can be time consuming. You’ll need to research which sites to advertise on, create your listing, find potential buyers, then sort through offers and meet buyers in person to seal the deal. This could take weeks or months of effort.
- More paperwork. You’ll need to obtain all the documents yourself like the rego and roadworthy certificate and transfer of ownership form.
- Risk from scammers. Meeting with strangers always comes with certain risks. Be cautious when receiving offers that seem too good to be true and bring along a friend or family member when meeting someone in person from online.
Selling through a dealer
The pros and cons of selling to a dealership are usually the opposite of selling a vehicle privately.
Vehicle sales through a dealer can be quick and convenient – the dealer can provide a cash quote, take care of all the paperwork, and sometimes even provide a complimentary towing service for your car.
On the other hand, you may receive a lower sales price and have less room to negotiate as the dealer needs to make their own profit.
Consider the pros and cons for both approaches before deciding how to sell.
Preparing your car for sale
There are some things you can do right now to improve your chances of selling your car faster and at a better price:
- Give your car’s interior and exterior a deep cleaning, either yourself or through a professional car wash.
- Keep your car’s logbook up to date with its service history.
- Take quality photos of your car’s interior and exterior (if selling privately).
- Consider renewing your vehicle registration if it’s almost expired. More buyers will consider purchasing your car if there are extra months left on the rego.
And if you’ve not been previously insured with Suncorp Insurance and you’re trading in your vehicle, you can use the link below to get a quote for your new vehicle in just a few minutes.
- How to prepare your car for sale
- Car Insurance renewal prices explained
- Electric cars in Australia: here's what you need to know
*You cannot have Rating 1 for Life and Claims Free Driver Rewards on the same car. Claims Free Driver Rewards is not redeemable or payable as cash. Refer to the PDS for details.
This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it.
The information is intended to be of general nature only. Subject to any rights you may have under any law, we do not accept any legal responsibility for any loss or damage, including loss of business or profits or any other indirect loss, incurred as a result of reliance upon the information. Please make your own enquiries.