5 Reasons Why You Should Sell Your Car Today (And 1 Reason Not To)

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Have you looked at auto prices lately? If you have, you may have noticed that most car lots have a pretty low inventory. Not only that but what can be found tends to have a much heftier price tag than what you may be used to seeing.

The auto industry has been on a roller coaster since the start of the pandemic. With quarantine orders going into effect in March 2020, people started staying at home and buying everything off of Amazon (including the essentials such as toilet paper). The number of car buyers dropped sharply and auto-makers soon stopped new car production.

However, in 2021, with vaccinations coming out and stay-at-home orders easing, car buying rebounded quickly. In fact, it came back quicker than car companies were expecting. The auto industry has since struggled to restart production while dealing with supply chain issues such as a global shortage of computer chips.

This has led to a shortage of available vehicles. All of a sudden, used cars are sought after and are worth much more than they were a year ago. This may go on for a while. An article from cars.com estimates the vehicle shortage will continue into 2022. Click here if you want to read their article about the cause and implications of the vehicle shortage.

Some folks may want to take advantage of current market conditions and sell an unneeded vehicle while prices are high. If you are interested in doing so, I have laid out 5 reasons to consider selling that extra car today. I will also bring up 1 very important reason to not sell your car.

Why Sell

  1. Attractive Prices: Above is a chart from the Federal Reserve showing the average price of a car from 2019 to today. Not to bore you with economic data, but look at the massive spike in car prices recently! The average price of a car has increased 45% from its low point last summer through June 2021. That means a car that would sell for $10,000 last year should be worth nearly $15,000 today. If you are looking to make some extra money, getting paid one and a half times what something was previously worth is a good way to do so!
  1. Selling Now Fits Your Long-Term Goals: Getting that extra cash could also help you achieve some personal goals. The money could be part of a down payment on your first home, seed money for your business idea, or used to help your child have the wedding of their dreams.
  1. Reduce or Eliminate Ongoing Costs: Cars take money to keep running. The cost of insurance, registration fees, oil changes, parking fees and maintenance can be a steady drain on your pocketbook. Selling your car might help tighten up your budget.
  1. You Can Help a Friend or Family Member: Instead of selling your car to the dealership, you might consider selling to someone you know who needs a vehicle but is having difficulty acquiring one. This could include a teenage driver ready for their first car, new parents who need a larger ride to hold car seats, or a friend who was in a wreck recently and lost their car.
  1. Efficient Public Transportation: This option may be more geared to our non-Amarillo readers. Many large cities have invested heavily in public transportation such as buses, rail lines, or a subway system. The right transportation system may be cheaper to use and get you to your location quicker and gives you the flexibility to ensure that your extra vehicle is truly an unneeded car. If you are interested in this option, be sure to do your homework first and make sure that your city can actually deliver on those promises.
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Why Not Sell

While there are some good reasons to sell your car, there are also some important reasons not to. It’s important to consider your future needs. It doesn’t make sense to sell your car if you think you will have to replace it in the next couple of years. Don’t just think about your situation today. Try to think about your situation down the road (no pun intended). You may have a teenage child who will start driving soon. You may be considering moving to a new state. You might even be thinking about a cross-country road trip in the future. As the old military maxim goes, “if you fail to plan, then you plan to fail”. Don’t make a difficult situation for yourself in the future just to make some extra cash today.

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Summing it Up

Covid has turned many parts of our world upside down, including our economy. The resulting shutdowns and supply chain issues have created a unique car shortage in the United States. The result of this is that you can likely sell your extra vehicle for a premium. While there are many reasons to consider doing this, don’t sell your car if you think you might need it in the near future.

Some parents may consider putting the cash from a car sale aside to save for their child’s future college expenses. If you are considering this, you may want to read our article on whether a 529 College Savings plan is right for you. You can find that article here.