Selling the car is often a subjective choice, some want to get rid of it within two years, while others want to keep it for 20 years if it's still in working condition. However, if you want to get a good resale value for your car before buying a new one, what should you do? When should you sell it and how should you ensure that it fetches you a good price?
When should you sell?
When maintenance costs are low: "The best time to sell a car is 4-5 years, or within 1,000,000 km of running, as it starts to give problems and requires maintenance after that," says Vikramjit Bakshi, CEO Pineview Technology Private Ltd, one of the four government approved vehicle scrapping agents in Delhi/NCR. "Also, most people have taken loans and extended warranties for around five years, which makes it the best time to sell after this," he adds.
An easy way to decide whether or not this is a good time to sell is to find out the current value of your vehicle and any immediate or expected repairs and maintenance in the next six months or year. If the costs add up to more than the car’s value, it doesn’t make much sense to retain it.
When the resale value is high: More importantly, the value of the car depreciates in value by 50% after 4 or 5 years, and if you want to get a good resale price, you need to sell it before it slides down further. Most people do not want to buy a car that has driven more than 50,000-60,000 km or is older than 4-5 years as it will incur a higher maintenance cost.
When usage drops significantly: In a post-Covid work scenario, where many organizations have decided to implement a work-from-home policy permanently, you could be better off selling the car at a good price rather than letting it idle or retaining it for minimal usage, and have it depreciate in value. Also, if you're moving to another city or state where your car's use is minimal, it may be better to sell it.
When affordability falls: If your salary is unable to keep up with the rising prices of petrol or diesel, as has happened in the past few months across the country, it might be a good idea to dispose of your car and get more fuel efficient option such as CNG or electric one. You can get many benefits and tax breaks when you buy an electric car. State governments offer a variety of cash subsidies for the purchase of electric vehicles that include exemption from road tax and registration fee, as well as a lower public charging fare. These exemptions along with a 5% GST on electric vehicles and a tax deduction of Rs 1.5 lakh on interest under Section 80EEB, if you decide to take a loan for buying an electric car.
When should you scrap it?
If you have kept your car for as long as its legally permissible working age in your state, you have two options. You can sell it in another state where the expiry date is longer or scrap it as you will not be able to use it beyond this period. For instance, if you are in Delhi, you will not be allowed to drive a petrol car for more than 15 years, but in states like Andhra Pradesh, you can drive longer if it is in good working condition and if you can obtain a certificate of fitness for your vehicle from the RTO.
To avoid the hassle of selling a car in another state, you can have it scrapped. “You can also get a 5% discount on a new car purchase if you provide a scrap certificate from a licensed scrap company,” says Bakshi. This is besides the 25% rebate on road tax and a waiver of registration fees when buying a new car, if you scrap your old car.
Best way to sell
While you can sell your car directly to dealers or manufacturers, even through mechanics or social media, the best option these days is online car dealers, who have a large dealer network. They carry out the valuation, inspections, legal paperwork and as well as paperwork for you and ease the process of selling. However, it is a good idea to compare several websites before agreeing to a price. You should also make sure your vehicle is clean, maintained and well maintained with all service records and other documents before you start the sale.
Transfer insurance & benefits – After you sell the vehicle, you will need to inform the RTO about the transfer so that it is not liable for misuse or illegal activities involving the vehicle. You should also inform the insurer, especially if you are passing on insurance. If not, inform them about the cancellation of the policy.
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