I spend a lot of time in my car on road trips. As a result, I put a lot of miles on my car. With all those miles, when should I sell my car and upgrade to a newer one? After all, I don’t want my car to die on me when I’m 300 miles away … on a road trip.
The best solution to this predicament is the Maintenance Cost vs. Car Value Rule. Here’s how it works. At the end of the year (or on an anniversary you choose), add up all the maintenance costs you spent on the car for the past year. This would include any deductibles for warranty work. If the total amount spent on maintenance in one year is greater than half the value of the car, sell the car.
Here’s an example. Let’s say you did the following things to your car last year; oil changes, fluid changes, a new battery and new tires. You also paid a $100 deductible to replace a broken windshield wiper motor. (The warranty paid for the rest.) Add it all up and the total cost for last year was $1,100. You then go to Kelly Blue Book (or some other car value site), and you find out your car is worth $2,000. The $1,100 spent on maintenance is more than half your car’s value. Time to sell. The car is costing too much for its value.
Share if you know another rule for selling a car.
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