According to Edmunds, selling your car between the 2-3 year mark and the four-year mark will generally yield the best value.
Understanding depreciation is key to determining the optimal time to sell your vehicle. Cars lose value the moment they are driven off the lot, but this depreciation doesn't happen at a constant rate. Based on data, there are specific points in a car's life cycle where significant drops in value typically occur.
These key depreciation milestones, as highlighted by Edmunds, include:
- A substantial decline in value during the first two to three years of ownership.
- Another noticeable drop in value occurs at the four-year mark.
- After the four-year mark, the next significant drop in value typically happens at around eight years.
Selling your car in the window between the initial drop (within the first 2-3 years) and the subsequent drop at the four-year mark allows you to avoid the steepest parts of the depreciation curve while the car is still relatively new and desirable.
While selling after the four-year mark is still possible and often necessary, being aware of the significant drop at around eight years can help you plan if you're aiming to get the maximum possible value before that point.
Ultimately, the "best" age is a balance between the car's decreasing value and its remaining lifespan and reliability. Selling before major depreciation events allows you to recoup a higher percentage of the original cost.
