If you no longer use your car that is in decent and functioning condition, you may consider selling it. However, if your car needs extensive work or repairs it is probably in your best interest to keep it and fix it up before selling. 

Having a car is very important to many people’s financial security. There are approximately 282 million registered vehicles in the United States.1 Car ownership gives people the freedom to travel where they want whenever they want to go. But you may still be asking yourself, “Should I sell my car?” And if so, there are a few things to keep in mind.

Whether You Should Sell Your Current Car

Owning a car means having expenses. But, every budget has limits. If your current car fits either of these scenarios, then you may want to consider putting the “For Sale” sign on your windshield: 

  • Your Car Is Too Expensive — If your car is worth more than 25% of your salary, chances are you are paying tons in insurance and maintenance. An expensive car can continue to be expensive even after paying in full due to the make and model of your car, as well as your driving record. 
  • Your Lifestyle Has Changed — Everything from new jobs to newborns can change the way you think about your transportation. As you grow, you may need a bigger or cheaper car than what you’re currently driving.  
  • Your Car Always Needs Repairs — Take a look at the list of car repairs you made over the past few years. Then, look up the current value of your car. If you’re starting to spend more than that value in repairs, your old car may be more trouble than it’s worth.  

What To Consider When Buying a New or Used Car

There are a lot of factors to consider when deciding between buying a new car or a used car. Take a look at some of the key differences below to help you make a decision:

FactorBuying a New CarBuying a Used Car
CostGenerally more expensive upfront in the car market.Less expensive upfront, offering better value for money. The average cost is about $26,510.2
DepreciationHigher depreciation rate, especially in the first few years.Lower depreciation rate as the major depreciation hit has already occurred.
WarrantyComes with a full manufacturer’s warranty.Limited or no warranty, unless it’s a certified pre-owned vehicle.
ConditionBrand new condition with the latest technology and features.Condition varies; may require thorough inspection and may lack the latest features.
Insurance CostsTypically higher insurance premiums due to higher value.Generally lower insurance costs.
FinancingOften comes with attractive financing options, sometimes with lower interest rates.Financing rates might be higher; however, the overall loan amount is usually lower.
Choice & CustomizationWide range of choices and options for customization.Limited to what is available in the market; less room for customization.
ReliabilityHigh reliability with no wear and tear.Reliability depends on the car’s history, age, and mileage.
Environmental ImpactNewer models are often more fuel-efficient and eco-friendly.Varies greatly depending on the model and year; older cars might be less eco-friendly.
Resale ValueLower resale value due to rapid depreciation in early years.Better potential to retain value over time, depending on the model and condition.

Getting a Car Loan: What You Need To Know

Whether it’s a used car or a new car, you’ll likely need a loan for your next vehicle. If you’re after a new vehicle, you’ll want to know how a car loan works. An auto loan is an installment loan from a direct lender, explicitly borrowed for buying a car. You repay an auto loan in equal payments that are due monthly.

As a secured loan, your auto loan uses your car as collateral. While you’re making payments, the vehicle’s title belongs to the lender. After you pay off the loan, the lender will transfer the title to your name, which will make you the legal owner of the car.

Car Loans and Your Credit Score

Your credit score affects your auto loan options and costs like many other loans. Credit bureaus collect data about consumers and use a credit score algorithm to determine their creditworthiness and rating, as shown below.

  • Poor — 300 to 579
  • Fair — 580 to 669
  • Good — 670 to 739
  • Very Good — 740 to 799
  • Excellent — 800 to 850

The riskier the borrower, the higher the interest rates for lending. Generally speaking, the higher your FICO Score, the more access you have to low-interest auto loans and lines of credit. If you have less-than-perfect credit, quick cash loans can provide financial relief regardless of your score. 

People often think that high scores mean they can qualify for better cars or homes. However, other factors also determine your ability to repay a loan. Strong payment history and debt-to-income ratio are essential for any bad credit loan, so it doesn’t necessarily take stellar credit to get the new vehicle you need.

How To Manage Your Monthly Car Payments

If you have paid off the auto loan for your old car, you already understand how important it is to make your loan payments. And most importantly, you avoid adding extra expenses with late fees and penalties.

Here are some of the best ways to handle your monthly car payments.

Pay on Time

Making your monthly payments on time is the best way to get your debt paid off faster. 

Sticking to your payment schedule is beneficial on a few levels. For starters, making your payments on time means that you’ll finish making payments sooner or later. Additionally, regular payments can improve your credit score. 

Pay More Than the Minimum Due

It may seem challenging, but even the most minor addition to your payments can go a long way. 

Let’s look at a simple example. Your car loan payments are $200 every month. If you add an extra $20 to each payment, you will end up adding an extra month’s worth of payments a year! 

Understand the Fine Print

Not every loan is created equal. Because of that, you must understand the terms of your loan. For example, while it may seem like a great idea to finish paying your loan early, the lender could hit you with financial penalties.

Precomputed vs. Simple Interest

The benefit to early repayment comes down to the type of interest that you have.

When a loan has precomputed interest, the lender adds a fixed amount at the beginning of the loan agreement. Like sales tax on a retail item, precomputed interest is a flat cost the borrower must pay. Since the cost is unavoidable in your installment payments, there is no benefit to paying the loan earlier than the agreement. 

On the other hand, simple interest compounds the running balance of the loan. So, the faster you pay it off, the more money you save on interest in the long run.

Refinance Your Loan

In refinancing, your lender creates a new loan for you that pays off your original loan. The new loan has lower interest rates that will be more manageable for you and your budget.  

Pros and Cons of Loan Refinancing

Your car loan will have lower monthly payments with a lower interest rate. The savings can be reallocated to other areas of your budget or set aside to start building an emergency fund for car repairs and maintenance. 

While refinancing reduces your monthly payment, it does not reduce your principal balance—that is, you will still owe the principal balance. Lower payments will mean that it will take you longer to pay the debt, resulting in you paying more interest. However, the immediate benefit to your budget may make the long-term added cost of refinancing the best choice for you. 

FAQs About Selling vs. Keeping a Current Vehicle

How can I determine the best price to sell my car privately?

To set a competitive price for your car when selling it privately, check resources like Kelley Blue Book. They provide a reliable estimate based on your car’s condition, model, and market trends.

Is it better to trade in my car or sell it privately in the current car market?

In the current car market, selling your car privately might fetch you a higher price than a trade-in, especially if your car is in good condition. However, trading in is often more convenient and quicker.

What should I know about the demand for cheaper cars in the car market?

Cheaper cars often have a high demand, especially in a tight economy. As a seller, this could work in your favor, attracting more buyers looking for affordable vehicle options.

How do fluctuations in car prices affect my ability to sell my own vehicle?

Changes in car prices can impact your sale. If prices are rising, you might get a better deal. However, during a market dip, you may need to adjust your expectations and price competitively.

What are some key tips for car owners looking to sell their vehicles quickly?

For car owners eager to sell quickly, ensure your vehicle is well-maintained, clean, and priced right according to market rates. Also, advertise on multiple platforms to reach more buyers.

How can I make my vehicle more appealing to buyers?

To attract potential buyers, ensure your vehicle is clean, well-maintained, and all minor repairs are done. Good photographs and a detailed, honest description in your ad can also make a big difference when selling your car privately.

What paperwork should I prepare for a vehicle purchase agreement when selling my car?

When selling your car, prepare the title transfer paperwork, a bill of sale, service records, and any warranty documents. It’s also wise to check with your local DMV for any specific state requirements.

Can selling my car help me financially if I’m planning to buy a new car?

Absolutely! Selling your current car can provide additional funds, reducing the amount you need to finance for a new car purchase. This can lower your loan amount and potentially get you better financing terms.

CreditNinja’s Thoughts on Selling or Keeping Your Current Vehicle 

So, should you sell your car or keep it? The answer depends on a lot of factors. Not only do you need to consider your current financial situation, but you also have to consider how a big purchase can affect your long-term plans. Whether you’re buying or selling a car, make every effort to know the car’s value and the benefit it can bring to your life. 

Looking for some quick cash to keep up with your current car payment? If so, CreditNinja might be a great place for you to get your emergency money. At CreditNinja, we specialize in bad credit loans designed to be a more affordable alternative to payday loans. Check out our easy online application to see how much cash you could get today!


  1. U.S. vehicle fleet 1990-2021 | Statista
  2. Average Used Vehicle Price Falls | KBB
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