Drivers are keeping their cars longer than ever before. The average age of all cars on the road is over 11 years, up from eight years in 1995. Motorists who buy a brand-new car typically keep it for about six years, up from about four years in 2006. Cars today can last much longer than the 11-year average age. They won’t have the latest technological advances, however. Cars without side airbags or antilock brakes may still be running, but they won’t have the latest standard safety features.
New cars also have the newest technology, which comes with a price. Built-in Bluetooth, a standard feature in new cars was much less common 10 years ago. The average price of all new vehicles is about $35,000. And that expense contributes to the overall debt load of the average American. Americans owe about $1.2 trillion in outstanding auto debt.
Studies show people are keeping their cars 11 years on the average before trading them in.
The quality of cars has improved considerably in the 21st century, which makes it easier to wait longer before replacing old with new. Even used car owners hang onto their cars for an average of five years, up from three years in 2006. Some car brands command more loyalty than others. Toyota/Lexus has six of the top 10 most committed original owners. The top 10 is rounded out by Honda with three models that feature committed owners, and Subaru with one. Most of these are crossover SUVs or minivans.
When buying a new car, you should never expect to be able to get your money back. Carfax says that as soon as a new car buyer leaves the lot, that car has lost 10 percent of its value. By the end of its first year, the car has lost another 10 percent.
Most cars continue to lose value at the rate of 15-to-25 percent each year for the next four years. There are lots of variables, including fuel mileage and options. Popularity waxes and wanes. A car that’s popular now could lose favor in a matter of months.
That’s why when you buy a car, you need to consider what will work for you for at least the next five or six years. Consider your family size, your commute and other factors when buying a car you expect to own for a while. You don’t want to buy a sports car and have to sell it in two years because your family size has grown.
How Long to Keep Your Car
Remember that cars are not an investment. If you’re thinking about trading in your car, compare the costs of your current car with that of the new one. Sometimes it’s worth it to hold on to your car a little longer and save money toward a new car.
You will almost invariably lose money when you trade in your car. A dealer will offer you wholesale or less for your car. For many, the convenience of trading in a car is worth not having to sell the car privately. Some states will also give you a break on the sales tax of your new car, taking the value of the trade-in off the tax on the new car.
What is Your Car Worth?
Educate yourself on what your car is worth. If you’re car shopping, ask the dealer what he or she will give you for it. It's best not to give the dealer a figure. Make sure your car is clean and shiny if you want to trade it in.
Factors to consider when to trade in your car are market conditions, the condition of your car and your own circumstances. Some say spring and summer are good times to sell, but you may want to make sure the markets aren’t flooded with the model of car you’re giving up.
Cars tend to lose value when they hit 60,000-to-70,000 miles when things like timing belts need to be replaced.
Best Time to Trade In
See what your bank or credit union will offer you on a car loan before you go car shopping. When you're looking to trade your care in, look for year-end deals, or shop at the end of the month when dealerships need to hit sales quotas.
Research your options. Again, make sure when you buy that the car you choose is the car you want for at least five or six years. Consider all the safety features. Consider the fuel mileage and factor in the potential for increases in gas costs.
When you get your new car, savor it. Don’t let that new car feeling wear off, and you may enjoy your wheels for many years to come.
- Autotrader: Buying A Car: How Long Can You Expect A Car To Last?
- CNBC: Car Owners are Holding Their Vehciles For Longer, Which Is Both Good and Bad
- CNBC: Americans Holding Onto Their Cars Longer Than Ever
- Forbes: Passing the Test of Time: Cars Owners Keep for a Decade or Longer
- Carfax: Car Depreciation: How Much Value Will a New Car Lose?
- The Insider's Guide to Car Buying: Car Dealership Trade-in Process Tips and Secrets