Wondering whether you should trade in your old car? Although a new vehicle with all the bells and whistles may be tempting, a trade-in could mean losing more than you gain. Here are five reasons to stick with the car you have.
You Won’t Get a Lot of Money
Trading your car in is always a better arrangement for the dealership than for you. Think about how much you’ve already invested in your car. The original purchase price, repairs, maintenance and cleaning add up over the years, and you don’t recoup any of it. All you get is what the dealer decides your car is worth.
After sending you home with a pricy new vehicle, the dealer will turn around and sell your trade-in for a significant profit. You can’t blame them – they have to make a profit to stay in business. But you lose out in the end, especially if the car you trade has a lot of good miles left in it.
Your Monthly Budget will Decrease
If you’re wondering when not to trade in your car, consider how the payments could affect your budget. There’s no way to avoid some debt unless you can pay the entire cost of a new vehicle up front. Whether you lease a car or get financing, you’re out hundreds of dollars every month for several years.
On top of payments, you’ll have higher insurance costs. Getting a car with modern safety features may save you a little, but it won’t cancel out expenses like collision coverage. Overall, your annual insurance bill is likely to be a lot more than what you’re used to.
Your Other Costs are Higher
Sometimes answering the question, “Should I keep my old car or trade it in?” is as simple as doing a little math. Research what payments would be on a new car over a given lease period. Compare this to maintenance costs on your current vehicle for the same number of years. The cost of maintenance is likely to be similar or even lower.
A new car will also depreciate faster than the one you have now. According to NerdWallet, a new vehicle can lose 20% to 30% of its value in the first year. By year five, the number jumps to 60%. For a $30,000 car, that means a loss of $12,000 in value over five years – money you’d be better off holding onto for something else.
You Won’t Have as Much to Save
If you’re making payments on a car that’s losing value and shelling out more for insurance, your savings will suffer. Look at your current budget. Rework it with your estimated car payments and other costs taken out. A new car doesn’t look so appealing now, does it?
Imagine what you could do if you saved all that money instead of buying another vehicle. You’d certainly have enough to make any necessary repairs on your current car. There might even be money left over to do something fun, like take a vacation!
You Could Miss the Memories
Does your car have a special place in your heart? Do you feel nostalgic every time you get behind the wheel? Keep it. If there’s nothing really wrong with it, there’s no reason to let go of those memories just yet.
A car isn’t just a metal box that gets you from place to place. It’s fine to be a little sentimental and enjoy reminiscing about all the good times you’ve had driving your current vehicle. And while you’re at it, why not plan a road trip and make some new memories?
What to Do Instead of Trading in Your Old Car
The car you have now could serve you well for a long time to come if you take care of it. Instead of spending money on a new vehicle or locking yourself into a lease:
· Take regular trips through a touch-free car wash
· Clean and vacuum the interior often
· Get occasional professional detailing (Book Online and save $45.00!)
· Set up a regular maintenance schedule with your mechanic
· Have any serious problems fixed right away
Forming these car care habits now will not only keep your vehicle looking and running great but also prepare you to properly maintain a new car should you decide to get one in the future.
So, if you can get more use out of your car, hold onto it! A small investment in cleaning and maintenance pays you back with thousands more miles of enjoyable driving. Don’t get distracted by the big promises car dealers make about the latest models. Stick with the vehicle you know you love, and keep more money in your pocket.
About the Author Theresa “Sam” Houghton is a writer, speaker and health coach from Troy, NY. She’s a regular contributor to NutritionStudies.org, and her work has appeared in the Honest Weight Food Co-Op Coop Scoop, Natural Awakenings Magazine and the NutritionFacts.org 2017 Daily Dozen calendar. She has been a featured guest on Focus on Albany, WMAC’s Food Friday and the Just Ask David podcast. When she's not writing or cooking, Sam likes to read and study the Bible, cook tasty plant-based food and knit socks. You can find out more about Sam at GreenGutWellness.com.