When is a good time to change?

It’s easy to get too comfortable with your current car when a change could be good for you and your finances. But when is a good time to change?

We love our cars in Ireland. So much so, that our car ownership is among the highest per capita in the world, and we spend more money looking after them and keeping them in fine fettle than our European counterparts.

However, this love for our cars can blind us as to when it’s time to let Old Faithful go.

Just as many of us find it desperately difficult to know when to let a much loved family pet head to the pet shop in the sky, we often hang on to our cars beyond the sensible point we should change them.

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Whether this is down to sentimentality or we just become too accustomed to our chosen set of wheels, making the decision to change cars at the right time is as crucial as the car you decide to buy next.

Used car values start to drop the moment you drive any car out of the showroom. Whether it’s a brand-new vehicle or a used one, the price is only going one way and that’s down.

Of course, choosing the right car in the first place will help offset this depreciation so it affects you at a slower rate than with other makes and models. Even so, depreciation is a fact of motoring life, but knowing when to swap your existing car for a new one is the important factor in avoiding the worst of this financial hit.

Motoring butterflies who like to change their car regularly, and some do this every six months, are the drivers who will be penalised the most.

The depreciation curve of almost every car starts off steeply, plummeting down before beginning to level out as the car reaches three-years old.

The most popular cars will enjoy a slightly more gentle decline in value, but the crossover point between steep decline and levelling off is generally around that three-year mark, and we have been locked in to a three-year cycle of changing cars for many years.

We love taking delivery of a new car and the Irish are also more brand conscious than most European drivers. For this reason, cars tend to go out of fashion and favour quickly, so values also drop correspondingly.

If you buy a car as a fashion statement, it’s wise to trade it in while its star is still high in the sky of desirability. Wait six months while you enjoy its 15 minutes of fame and you could end up paying dearly for this indulgence when the next big thing arrives.

The truly smart money will wait for a car to be one to three years old, letting someone else fund the depreciation. Once the car has shed the bulk of its value but it still new enough to be desirable and reliable, canny buyers swoop in to get a great car at anything up to 40% of its price when new.

Run a car like this for a couple of years and sell it on while it’s still shiny and new enough to have kerb appeal and you will always minimise the blow of depreciation.

Hang on too long and you could end up with a car worth little other than the memories you have of driving it.

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