If you’ve been financially impacted by the Coronavirus pandemic, or fear a looming global recession, you might be wondering: should I sell my car?
While selling your car during COVID might sound like a good idea, a recession or economic downturn is definitely not a good time to sell your car.
Of course, if you need a car and the one you have is no longer safe to drive, you should definitely sell or repair it. Safety comes first. But if you’re only thinking of selling because of the economy, then it’s time to reconsider.
In this article, we’ll discuss why a recession might actually be the worst time to sell your car — and why keeping your car instead can be a big financial advantage.
Car ownership can improve job security
Maybe you’ve lost your job during the pandemic. Perhaps you find yourself with less job security than before. In these cases, you might want to reconsider selling your car. Owning a car means that you can access more job opportunities than you could with public transportation only. Even jobs that are temporarily remote often require an in-person interview, or require employees to live within driving distance so that they can work onsite in the future. And if you’re hoping to find a job as an essential worker, who are still allowed to work onsite during stay at home orders, car ownership broadens your job prospects even more.
Don’t take our word for it, though. Economic studies over the years have found consistently that car ownership impacts job prospects. One study from the Urban Institute found that access to a car does improve economic outcomes for voucher recipients—and that public transportation only connects people to 40% of jobs compared to what they could access with a car. Similarly, lack of reliable transportation is a commonly cited barrier to employment in low-income communities, according to this research paper from the University of Notre Dame.
Studies aside, it also comes down to common sense. The easier it is for you to get places, the easier it is to go job hunting.
You might get less money if you sell or trade-in now
You know what they say about a buyers market; it’s a bad time to be a seller. Although some automakers have been faring better than others, car sales overall have declined in 2020. Individual buyers are paying less, as many people continue to lose their jobs or fear for their job security. If you’re looking to trade-in your car, dealerships also aren’t looking to buy used cars as much either since they are selling less inventory.
The good news is that we can learn a bit from history. During the Great Recession, car sales declined significantly too — but they fully recovered within 7 months. In other words, if you can stick it out for a few months, you might have a better experience.
During a pandemic, private cars are safer than public transportation
Health and safety measures surrounding COVID-19 have fluctuated, but there’s one guideline that has stuck around: social distancing is key. We know that the virus spreads between people, and the risk is higher in enclosed spaces and crowds.
If you own a car and don’t have a pressing need to sell it, consider the benefits that come with access to a private vehicle. We’re talking health and safety, in particular. While some still argue that public transportation does not increase risk if passengers take diligent precautions, it’s still a much more precarious situation than your own car. Inside your own vehicle, you don’t risk sharing germs with people outside your household. You also have complete control over sanitation.
To learn how to keep your car sanitized and disinfected, check out our guide to clean cars during coronavirus.
Good reasons to sell your car during a recession
Of course, everyone’s situation is different. Although keeping your car has a number of benefits, there are legitimate reasons to sell during a recession.
If you’re unable to make your car payments, experiencing mental stress from car ownership, or if your car is no longer safe to drive, then it’s certainly time to let it go.
What advice do you have about car ownership during a recession? Let us know in the comments below.