I have a 2019 Volvo S90 which I bought (almost) new with 200 miles on it 2 years ago. The car was sitting on the lot for quite a while and I was able to buy it out of the door for 20k below MSRP (37500). I have been enjoying the car for the last 2 years and have put 19k miles on it. Except of few small issues (accelerated brake wear) the car has been great. It has all the bells and whistles I need. I appraised it few times and I have been offered up to 30k for it.
It seems that the used car market is cooling down. I think if I don’t sell the car within the next 1-2 month, the value is going to go down pretty quickly and in one year with 10k miles more, I might not even get 17 or 18k bucks for my car. In the same time, the new car market seem to recover. I called around and can get a either a BMW, Mercedes, Volvo or Audi around or below invoice.
My question for the experts: Shall I now sell and take advantage of the (still) high used car market and take the equity to buy a new car or shall I just drive my Volvo as long as I can to maximize the value. I have a cheap mechanical breakdown insurance which acts of sort of extended warranty, so from this point of view I am taken care of.
Any advice or thoughts would be highly appreciated
Responding to your question is going to be a no-win situation for anyone except those who substantially value the same things you do, so it would help a lot to state your primary objective(s) behind your question.
One of my favorite posts here was made by someone who honestly and plainly stated that his wife wanted something flashy to be seen in when she dropped the kids off at school.
Others like me will point to a 15-year-old Lexus in the garage that was driven less than 300 miles in the past year, and tell you to keep what you have because it costs us almost nothing to own our used vehicle, compared to replacing it with something new.
You’re sort of asking, “I’m going out for dinner tonight. Where should I go and what should I order?”
If you have a good offer on the Volvo and you can wait a few months for your next vehicle by ordering I would prob go that route.
Not sure if you have an additional car or wife’s car, etc but you would certainly get a much bigger discount (deal) if you ordered a new car and waited a few months rather than negotiating on an in stock car.
You can maximize the equity in your current car while waiting for your new car to arrive.
Regarding the question Volvo vs Lexus, I totally agree. If this would have been a Lexus, I would have kept it without any hesitation.
Regarding concrete numbers: I have a quote for a nicely loaded GLE 350 or Volvo XC90 for 65k out of the door. For the Mercedes it is 3k below invoice, for the Volvo 5k Below MSRP. When I sell my s90 for 30k, I can finance either one of them for 470 per month (3.5% for 84 month).
If I would drive the Volvo for another 2 year and put 20k miles on it, it will be most probably worth between 16-18k in 2 years. That means I will loose 500 dollars per month if I keep it.
On the other hand, when I get a Mercedes and try to sell it in 3 years, I might be loosing 25-30k which will cost me 7-800 dollars per month.
So from mathematical point of view, it makes sense to keep the Volvo for another 2-4 years. I have another year of warranty and a mechanical breakdown insurance which costs me 80 bucks per month and that should take care of unforeseen issues.
which model/trim is this? It may depreciate as you are suggesting, it may not.
FYI, you can get a factory-backed extended warranty from any dealer. Shop around and find the best deal on one, if keeping it.
If you are happy with the selling number AND happy with a replacement and the price on that, there is nothing stopping you. Personally, I find the S90 an amazing ride that would be hard to replace for that same $30k you are being offered … unless yours is a FWD T5, which I probably then wouldn’t care much for.