Vehicle Economics

Trade Now vs Wait 12 Months

Nets a full year of equity improvement against a full year of operating and repair cost.

Sensitivity: operating and repair cost during the wait

Drag to see the recommendation change live, without touching the form above.

Why this comes up

A full year is long enough for equity to genuinely improve, but it's also long enough for real repair risk to show up, an older car has a full four seasons to develop a problem that six months might not. This engine nets a full year of equity improvement against a full year of costs, not just a repeat of the six-month version at a longer window.

How we calculated this

We project your equity today and your equity twelve months from now (value minus loan balance, using your depreciation and amortization schedule), then subtract the full year's operating and repair cost you'd incur during that wait.

Worked example, using this page's own defaults ($18,000 value, $20,000 balance, 6% APR, $1,500/year depreciation, $2,200 operating and repair cost for the year): the equity improvement over a full year is larger than the six-month version, but so is the cost of waiting, run the calculator above to see which side wins with your own numbers.

What this means

  • A year can materially improve negative equity, but this model only captures added repair risk if you actually enter a realistic figure for it, don't leave it at zero for an aging vehicle.
  • If waiting wins here but the margin is thin, Trade Now vs Wait 6 Months gives you a shorter-horizon checkpoint instead of committing to a full year.
  • If trading now wins, check Maximum Negative Equity for Target Payment or Negative Equity Rollover Payment for what that means for your next loan.

Limitations

Depreciation and operating/repair cost are your own estimates for this specific 12-month window, not general averages, and no future market value is guaranteed. See Methodology.

Methodology

This engine combines Vehicle Economics' equity and depreciation projection model (your value and loan payoff projected forward from your own depreciation figure until they cross) and ownership total cost model (every ownership cost, depreciation, financing, fuel, insurance, maintenance, repairs, and fees, summed over your horizon). See Methodology for the full detail.

Next decision