Most people fail to realize that vehicles do not depreciate on a perfectly consistent, "straight-line" basis, but that there are cycles to depreciation that are quite predictable. Understanding these cycles can help in determining when to trade-in your vehicle.
In general, used vehicles are worth the most in the "spring market", which usually starts in late January and can last into June. In a typical year, this is a good time to trade most types of used vehicles because of the heavy demand throughout these months. Convertibles and sport coupes are particularly responsive to this market and can be worth thousands of dollars more than they were in the months leading up to the spring market or will be worth during the months following it. Vans are generally more desirable in the spring. SUV's have become so popular that they respond more like cars and do well in the spring as well as in the months preceding the fall market (August and September).
Most vehicles begin dropping significantly in July and August (convertibles and sport coupes even earlier during June and July). They may continue to drop slowly during August and September before dropping more heavily in October and November, typically the worst months to trade a vehicle. A late model Porsche, for instance, traded in October of 2008 might be worth as much as $4000 less than the same vehicle traded in March of 2009. This is an extreme example, but it is not unusual for the difference in value trading a vehicle in a hot market vs. a weak market to be hundreds or even thousands of dollars. Whenever possible, make sure you take advantage of the strong markets.
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