Is This A Good Time To Sell Your Car?

A quick cost benefit analysis of keeping or selling your car during the 2021 global car shortage.

Introduction:

Car prices are going up around the world, and if there was ever a time to sell your car, now is the time. In case you don’t know, there’s a car shortage in the United States because natural disasters and Covid-19 have caused chip factories around the world to shut down. Cars don’t optimally work without these little chips, and so now there is a car shortage.  

Here’s a 5-minute video by the Wall Street Journal explaining this phenomenon.

Due to the chip shortage, second hand cars are getting higher than usual buyback rates, and you might be wondering if now is a financially beneficial time to sell your car.

Conduct Your Own Cost Benefit Analysis:

Use this worksheet (this downloads an excel file to your computer) to explore the annual operating cost of having a car vs. not having a car, and what the total cost of having a car is vs. not having a car. Follow the steps in the first sheet and input values that reflect prices in your city and your vehicle type. Links have been provided for some of the line items, and you may want to go in and add some more line items. Go ahead and have fun with it!

An Example:

Below is an example of the cost benefit analysis with inputs for a 2021 Toyota Camry Hybrid and costs in Chicago.

Conclusion:

Even though “nearly 60% of all surface transportation trips are under 5 miles and another 25% are under 15 miles,” choosing to live a car-free lifestyle isn’t intuitive for most Americans. There is a huge assumption that having a car is the only option and the cheapest option.

This isn’t always true. Through the cost benefit analysis, I hope you have a better basis of comparison that helps you think through whether having a car is worth it, and if there are benefits to selling your car or purchasing a car during the 2021 global car shortage.