A lot of road trips can kill the value of your car. I had a conversation with a friend who was not a happy camper! He was trying to sell his car and was shocked to learn the vehicle lost $12,000 in value in 2 years. Why … a lot of road trips. He has a short commute to work, but he hits the road at least once a month for weekend stays.
He purchased a used car two years ago with 11,000 miles on it. He paid a little over $18,000 for the car. Today, the car had 91,000 miles and was appraised at $6,000. Wow! That’s a lot of value lost in 2 years. Should he have rented cars for all those road trips?
The question you have to ask yourself is, do you care about the value of your car? What type of car owner are you? Are you the type to buy a car and drive it until it dies? If you are, you probably don’t care about car value. One day you’re mechanic tells you it’s time to replace the old set of wheels. You call some nonprofit to tow it away and buy the next car. You don’t need the value on the old car to help purchase a replacement car. If this is you, go road trip crazy and drive your own vehicle.
If you plan to trade-in your old car, your car’s value is essential. Here’s what you need to think about. How many miles do you drive per year? The average American drives 12 – 15 thousand miles per year. Let’s use 15,000 (or 15K) as a nice round number. Miles driven is not the only factor in determining the value of a car, but it’s an important one. At the end of each year you own your vehicle, how many miles did you drive? If you added less the 15K, GREAT. You slowed the rate of decline in value. If you added more than 15K … OUCH! It’s like tying a brick to your car’s value. Bottom line … if your road trips will take you over that 15k mark in any one year; fly, take the train or RENT A CAR. Don’t make your vehicle’s value a victim of your travel plans!
Thanks for reading CAPM and More!