When should you sell?
Selling a car is often a subjective choice, with some wanting to dispose it of within two years, while others want to retain it for 20 years if it’s still in working condition. If, however, you are keen on getting a good resale value for your car before you buy a new one, what should you do? When should you sell it and how should you ensure that it fetches you a good price? Here are 4 situations under which you should consider selling.
When maintenance costs are low
Experts point out that the best time to sell a car is after 4-5 years or within 1,00,000 km of running. Most cars also come with warrantees of 5 years, beyond which resale anyway become difficult. An easy way to decide if it is the right time to sell is to find out the current value of your car and the immediate or expected repairs and maintenance in the next six months or a year. If the costs add up to more than the car’s value, retaining the car will not do you much good.
When resale value is high
Importantly, the car depreciates in value by around 50% after 4-5 years, and if you want to get a good resale price, you should sell it before it slides down further. Most people do not want to buy a car that has done more than 50,000-60,000 km or is older than 4-5 years as it will incur a higher maintenance cost.
When affordability falls
If your income has fallen in tandem or can’t keep up with the soaring fuel prices, it would be a good idea to dispose of your car and get a more fuel-efficient option such as a CNG or an electric one. State governments offer a range of cash subsidies on purchase of electric vehicle (EV) which include exemption from road tax and registration fee, as well as lower public charging fare. These exemptions are besides the 5% lower GST and income tax break of Rs 1.5 lakh on interest under Section 80EEB, if you take a loan to purchase an EV.
When should you scrap it?
If your car has run its due legal permissible working age in your state, you can opt to either sell it in another state where the expiry date is longer, or scrap it as you will not be allowed to use it beyond this period. To avoid the hassle of selling a car in another state, you can have it scrapped. This is besides the 25% rebate on road tax and registration fee waiver on 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 selling companies, which have a huge network of dealers. They carry out the valuation, inspection, legwork as well as paperwork for you and ease the process of selling. It is, however, a good idea to compare several websites before agreeing to a price. You should also ensure that your car is clean, serviced, well-maintained with all the service records and other documents in place before starting the resale process.
Transfer insurance & benefits
After selling the car, you will need to inform the RTO about the transfer so that you are no longer liable for any misuse or illegal activities involving the car. You should also inform the insurer, especially if you are passing on the insurance. If not, inform them about the cancellation of the policy.
When to scrap
A car can be scrapped if it suffers severe damage in an accident or remains unused for a long time and is not in working condition, or exceeds its expiry date and the registration certificate (RC) or certificate of fitness are not renewed by the RTO. The expiry date varies across Indian states. In Delhi, for example, you cannot drive a car that is over 15 years old if it is a petrol car, 10 years if it is a diesel car, whereas in other states, the expiry is determined by fitness of the vehicle and can even go up to 20 years.
How to scrap it
You need to locate and go to a government authorised scrapping facility or recycler. Going to an authorized scrapper is crucial as only he will provide the certificate to be used to deregister. To go ahead with the dismantling, certain documents need to be submitted.
What price will you get?
The price is determined by weight of the vehicle to be scrapped and is typically Rs 15 per kilogram of metal parts. If the car is in working condition and its parts can be sold, you can get a higher price for the vehicle.
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