Should you sell or scrap your car and when? 4 cases to consider

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.

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.

In the post-Covid work scenario, where many organisations have decided to implement the work-from-home policy permanently, you could be better off selling the car at a good price rather than letting it idle or retaining it for minimal usage, and have it depreciate in value. Similarly, if you have shifted to another city or state where your car usage is negligible, you could be better off selling it.

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.

Also read: Electric cars vs petrol, diesel cars: Benefits & drawbacks

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.

Also read: How and when to scrap your car

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.

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.