My daughter just graduated from college and took a job about 60 miles from home. She plans to stay here in town and commute. She bought a nice used car with 30K on it. She expects to drive 25 - 30K per year. Should she consider selling the car after a year (with 60K) so it still has good value and buy another nice used car and repeat the process annually?
Selling a car yearly after paying tax and license and depreciation is usually not economically sound. Much depends on the economy, the type of car etc. You can check values on Kelly Blue Book. Selling a car with 80=90k miles makes more sense. It still has value but you have also got use out of it.
〉 Answered on Nov 29th, 2010 by Patricia Algier , Owner at Valley Dealer Exchange Inc
She and you are the only ones who truly know the answer to this question. If she has no loan on the vehicle and wants to upgrade after a year maybe this is a good idea. If however, she financed the vehicle over a long term it is rarely a good idea to trade after one year because she will probably owe more than the vehicle is worth and she would carry any negative balance over to another loan putting her even more in "the bucket" on the next vehicle. If the vehicle is reliable and suits her needs let her drive it a long time. A vehicle is never an investment but an expense and only depreciates.
〉 Answered on Nov 29th, 2010 by Jessie L Thatcher, F&I and Sales Specialist at Reynolds and Reynolds Company (Retired)