How I sold my used car for a profit of $5,000
- Andrew Lambrecht decided to sell his 2016 Chevrolet Volt last year when the used car market was hot.
- He sold it for $20,338 through Vroom in December. He originally bought it for $15,000.
- He used the money to put down a deposit on a new Mini Cooper SE.
Today, buying a car at a reasonable price is almost impossible. Whether you’re essentially paying original price for a years-old vehicle or facing ridiculous markups on new cars at dealerships, it’s obvious that times have changed for potential car buyers.
However, one person’s loss can be another’s gain, and if you time the market correctly, you can make a substantial profit. That’s precisely what I did — and there’s still time for you to do the same.
In September 2020, I purchased a used 2016 Chevrolet Volt plug-in hybrid for $15,000. Its original MSRP was $40,280, so it had lost almost 63% of its value by the time I bought it. Most Used Cars lose about 60% of their value within five years of ownership in a normal market, so the Volt stayed in line with the average.
Based on its rate of depreciation, I planned to keep it for about a year or two and expected to list it for sale for around $10,000-12,000. But things went much better than expected.
Monitor the market for opportunities
During the first two years of the pandemic, used car prices rose intermittently and then remained at that level, which price timeline look more like a staircase than a gradual upward slope. Still, the online trade-in value of my Volt hovered around $12,000 in the winter of 2021.
To track its values, I used both vroom and Carvana’s online recovery tools. Both of these websites offer you an offer instantly, so you don’t have to wait at a dealership for a
CarMax usually offering me less.or something like that. Of all the online car buying websites, I have found that these two offer the most competitive values, with
As the pandemic progressed, prices soared even more. When times got uncertain for many Americans in the summer of 2020, demand for new vehicles has fallen. Earlier the same year, when China went into lockdown, its semiconductor production has declined. These chips are a big deal – they power everything from the infotainment system to semi-automated driving features like adaptive cruise control or lane-keep assist.
But in 2021, car sales started to rise again – especially in the electric vehicle space – but there just weren’t enough semiconductors for these new cars. While the vehicles rolling off the assembly line were essentially complete, they were just missing a chip.
Many automakers couldn’t keep up with demand, so shoppers had to revert to buying used cars due to low dealer inventory. Couple that with inflation, and used car buyers faced massive price hikes.
Current vehicle owners, meanwhile, faced an unprecedented opportunity to sell their cars at a net gain, a feat that very few vehicles could achieve in the past.
make the sale
Last spring, I started noticing an increase in the trade-in values of my Volt. In mid-March 2021, Carvana offered me $14,643 for my Volt, which was very close to what it was worth when I bought it. I wanted to trade it in for a newer BMW i3 electric sedan, but decided to hang in there and see how far it would go. What I would soon discover was that while I was holding trades, the values of the BMW i3 were rising just as steadily, so it was essentially a non-zero-sum game.
At the end of April, Carvana presented an offer of $15,083 for my car. It was the first time that I received an amount greater than what I had bought it for. I was tempted to take the money and run away, but once again I decided to wait.
Over the summer, its value has steadily increased. In September, Carvana’s $15,000 turned into $16,432. As my desire to flip it for a profit proliferated, I decided to hold it longer. At the end of December, his Carvana value started to drop, but his Vroom value suddenly increased dramatically.
Several days after Christmas, Vroom was offering an unbeatable value of $20,338. I quickly accepted it.
A few days later, a contractor picked up my Volt from a tray, and within a week, Vroom sent me the check. Although I probably could have sold it myself for a bit more, this process was seamless and easy. Excluding taxes and maintenance fees, which were around $800, I made $5,338 off my original purchase price.
Since I sold my car when values were high, it would make sense that I would have to pay more for my next vehicle as well. While I really wanted to buy a BMW i3, I wasn’t looking to pay north of $25,000 for a four-year-old car.
However, one car I had my eye on was the Mini Cooper SE – an electric two-door with an advertised range of 114 miles. BMW owns Mini and the Cooper SE shares many of its components with the BMW i3, its German cousin.
More importantly, an all-new Mini Cooper SE with the $7,500 Federal EV
costs about the same as a used BMW i3. For me, it would have been crazy to buy a used BMW i3 when I could get a brand new electric Mini Cooper for practically the same price.
The 2023 Mini Cooper SE starts at $34,750. However, at select Mini dealerships, like my local center in Charlotte, you can special order the base “Signature” trim for $30,750. It lacks some features like premium audio, a sunroof, and some paint options, but to me, it’s worth the $4,000 in savings. He was also eligible for the $7,500 federal tax credit, but note: you must pay at least $7,500 in taxes to get the full benefits.
My local Mini center charged an additional $1,396 in dealership fees, totaling the door price to $33,065 including taxes and state registration. Factoring in the tax credit, my 2023 Mini Cooper actually costs $25,565.
I put down the $250 deposit on the Mini, so hopefully it will arrive this summer. With an opportunity like this, you better make the most of it, and the electric Cooper was the most financially sound way to tap into the market.
Everyone’s situation is different, but if you’re looking to trade in your current vehicle, it’s worth taking a look to see how much you can get.