Is there an optimal window of time to own a car in terms of value?

As you probably know, cars are a poor investment on account of the rapid and relatively drastic depreciation of their value. I’m in a position where I can pay straight cash for my cars for the rest of my life, and I want to figure out how to do so with as little additional cash on top of the resale money for the previous car. I’ll be trading in a basically free car to start with, so I can defray the cost of my next car. But what I want to do is try to determine beforehand A) what age and mileage is the best value to buy, and B) what subsequent age and mileage is the best value to sell.

So for example: “buy a one year old used car with under 15,000 miles, and sell before it’s three years old and still under 45,000 miles”, or whatever.

I know this varies from car model to car model, differing resale values, etc, but just as a general rule, do you think there’s an optimal time to own a car? I’m speaking strictly monetary value. Brand new cars I know drop off like crazy the second you drive away from the dealership, so that’s out. But I’m wondering if there’s an age and mileage where the value falls off a cliff most drastically.

Basically the goal is like spend $20K or so on a car, and sell when it’s still worth like $15K (or whatever numbers, you get the idea) so I’m wondering how long that is. I’m thinking this might have to be a yearly flip to maximize value.

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Most Helpful Girl

  • So is there any reason why you can’t keep a car until zero value? Like do you have a newer seeming car for work or something?

    If not, I think you are better off buying a used, reliable car with about 25k to 35k miles on it and keeping it until it has little value left and does not cost you money (repairs).

    I have had three cars in my life and only one of them new. I have had a car for 25 years of my life, I have spent 40k for my cars and I drove about 15k miles a year.

    So unless you need to have a nice car, I would purchase more on reliability and cost than anything else.

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    • 6 d ago

      Well, I could keep it til zero value, and historically have, or at least for a sub-$1,000 trade-in. But in doing that, I probably pay more than the cars are worth in maintenance and repairs. And that also leaves me holding the bag to pay full price on the next car. So I’m wondering if it would calculate out to making more sense if I kept the cars for a shorter amount of time and flipped them over at a younger age.
      Like does it work out better to buy a lightly used car for $20K, flip it the next year for $15K, and then spend only $5K of “new money” on the next car; or to buy a lightly used car for $20K, keep it for like 8 years, run it into the ground, get the full $20K worth of usage but also assume a variable and somewhat unpredictable cost of repairs, fresh tires, etc on the back end of the life of the car, post-$100,000 miles. Like I wouldn’t be surprised if I spend $3,000, maybe even upwards of $5,000 a year on repairs, replacement tires and parts, and it’s a Honda, I can’t really complain with the durability. In fairness, I drive a billion miles for my job, I’m at 225K+, but even half that on a yearly basis adds up. My car before that, before this crazy driving job, that once cost me $900 just to pass inspection! So I’m wondering if it makes sense to buy like a year old car with 15-20K miles on it, keep it a year/15-20K miles, then trade it in before I need to do much more than maybe replace the headlights once and three oil changes.

      So it’s not too much about aesthetics. I’ve never owned a new car, and don’t intend to, unless I was extremely rich, otherwise I can find better ways to invest what I don’t spend and actually make money instead of piss it away, haha. I do want a respectable looking car and something that fits my needs, but I don’t need a Maserati. I’m probably going to buy a bike, we have a great bike highway system where I live, and I just want to generally drive less. We’ll see about my future with this job haha.

Most Helpful Guy

  • Pick up a black book. It'll give you everything you need to know

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What Girls & Guys Said

11
  • Uhh, if we were financial wizards we wouldn't be on GAG. Most of us I'm sure get screwed when we buy or trade in a car. All I know is the longer you keep a car the less it appreciates after a certain point, and as you know a lot of 40 yr old cars are worth 10 times what you paid for them in todays market. It all depends if you bought the right make and model.

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  • A couple years into a forever jobs.

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