Cars can suck money out of your pocket faster than a tornado in Kansas. That doesn't mean you and your little dog have to stand exposed on the prairie waiting for the winds to kick up. You can protect yourself against some of the financial hit of vehicle depreciation, which makes your car worth less every day you drive it around town.
Here are three ideas to help keep more money in your pocket when it's time to sell your car.
1. Buy with the sale in mind. Some vehicles keep their value better than others. In fact, some popular or scarce vehicles may be in such demand that they lose very little value during the first few years. If you're the type to buy and sell vehicles frequently, purchase a car that will sell for a bundle even when it's been used for a while.
Consumer publications and your own research can lead you to vehicles that will command a higher price in the used car market. In rating vehicles for best resale value, Toyota (NYSE:TM) and Honda (NYSE:HMC) had several models among the top performers, including Toyota's hybrid Prius and trendy Scion.
Meanwhile, American car companies Ford (NYSE:F) and General Motors (NYSE:GM) continue to find themselves at the other end of the resale-value heap, with models like the Ford Explorer and the GMC Envoy near the bottom.
2. Beware of cliffs. Even the most reliable, best-loved cars lose money eventually. Your job as a savvy car seller is to find out when it loses the most -- then sell the car before you run off the edge of that pricing cliff.
To do this, you'll need to examine two factors of the used car market. First, find out how the price of your car changes by year. Maybe a three- or four-year-old vehicle commands an acceptable price, but no one wants to come near a five-year-old car. You'll also need to look closely at mileage. A low mileage vehicle will almost always command a little bit of an advantage on the market. If you're a high-mileage driver, you'll want to sell before the odometer ticks too high for a potential buyer's comfort.
3. Get a little obsessive-compulsive. Many people flock to new cars because they don't come with any baggage. A new car hasn't been in any rush-hour fender benders. It hasn't developed that weird pinging noise that started right after the air conditioning broke down last summer. There aren't any french fries that have been petrifying under the seats.
You can put your buyers' fears to rest by being scrupulous about maintaining the car, and by keeping all those maintenance records to prove just how exacting you've been. Make time in your busy Saturday schedule for those routine oil changes. It will also pay to have the car professionally cleaned, inside and out, when it comes time to sell the vehicle. You may even consider getting the minor blemishes repaired, if they don't prove to be too expensive.
Extra Tip: Don't Sell. You can always minimize the costs of selling a car by ... keeping it. If minimizing the financial hit of car sales sounds like too much work, don't do it. Buy a car you can keep forever, or as close to forever as 250,000 miles will get you. You can get some help making that purchase from this Foolish car buying advice.
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Fool contributor Mary Dalrymple does not own stock in any company mentioned in this article. She welcomes your feedback. Drive through The Motley Fool's disclosure policy.
