SoFi

There’s no one answer that fits all situations. The average American has 4 credit cards. But how many lines of credit you should have depends upon your needs, your skill at managing your finances, and your ability to make payments on time.

We’ll explore two types of credit lines, provide definitions of basic credit terms, and offer some broader context so that you can make the choice that’s best for you.

Line of Credit Definition

First, what is a line of credit? A personal line of credit (sometimes called a PLOC) allows consumers to borrow money as they need it, up to a set limit, and pay it off over time. A line of credit can be used to pay bills or make purchases directly or to withdraw cash with no cash-advance fee. As long as borrowers keep paying down the balance, they can keep borrowing. In other words, this is a type of revolving credit.

Lines of credit are usually granted only to people with good credit. Because they’re less risky for the lender, the interest rate can be lower than for credit cards.

Recommended: Does Net Worth Include Home Equity

How Does a Line of Credit Work?

Many banks, credit unions, and online financial institutions offer lines of credit. A distinguishing feature is the “draw period.” During that time — typically seven to 15 years — funds can be borrowed and repaid in a revolving way. When the draw period ends, users can no longer make purchases or withdrawals, though they can reapply to keep the line open. The repayment period can continue for additional five to 13 years.

To utilize a line of credit, consumers may receive checks, a card, or a direct deposit into their bank account. Funds can be used however they like, but generally go toward large purchases. Personal lines of credit often have a variable interest rate, with interest-only payments during the draw period.

Recommended: Should I Sell My House Now or Wait

Is It Possible To Have Too Many Lines of Credit?

In this case, a “line of credit” refers to both PLOCs and credit cards. All credit cards are a form of credit line, but not all lines of credit are associated with a credit card.

If a consumer has many credit lines, lenders may see them as high-risk — even if their balances are all zero. As noted above, the average American has four credit cards. New Jersey residents have the most credit cards in the country, with 4.5 on average. Older generations tend to carry more cards than Millennials and Gen Z. So while four lines of credit may be considered normal, it can be “too many” if a consumer has trouble juggling their bills and making payments on time.

Is It Possible To Have Too Few Lines of Credit?

To build a strong credit score, it helps to have a variety of credit types. Credit mix accounts for 10% of a FICO® Score, and the ideal mix includes both revolving credit and installment loans like personal loans, car loans, and so forth. Although each person’s situation is unique, just having credit accounts and managing them well is what builds a good credit score. Having one or two cards can be enough.

Recommended: What Credit Score is Needed to Buy a Car

Credit Card Definition

You may be wondering, if a line of credit can come with a card, then what is a credit card? Both credit cards and lines of credit are forms of revolving credit offered by many financial institutions. A credit card holder can also make purchases up to the credit card spending limit. However, credit card users can avoid interest charges by paying off the balance in full each month. Essentially, credit cards provide consumers with unlimited short-term loans for free (assuming there’s no annual fee).

Credit cards don’t have a draw period — they remain open as long as the account is in good standing. The average credit card limit, according to the latest report from credit bureau Experian, is $30,365.

Recommended: What is The Difference Between Transunion and Equifax

Line of Credit vs Credit Card

A credit card — as the name implies — has a card connected to it, which allows the borrower to access funds. A line of credit doesn’t necessarily have a card connected to the account. Lines of credit tend to have lower interest rates and annual percentage rates (APRs) than credit cards and may have higher limits. So they may be better suited to large purchases, as noted above, that can be paid for over time.

Credit cards are easy to use for everyday purchases and often come with an interest-free grace period (from the purchase date until the payment date). Credit cards may provide rewards and perks that personal lines of credit do not. And applying for a credit card is usually a simpler process than the line of credit process.

Recommended: Choosing a Credit Card

Credit Score Risk Factors to Consider

How someone manages personal lines of credit and credit cards will have an affect on their credit score and, therefore, their ability to borrow at advantageous rates. Here are some ways your line of credit may negatively influence your credit score:

•   Credit utilization. After a large purchase, your credit utilization percentage will rise. Credit utilization accounts for 30% of your credit score.

•   Payment history. Late or missed payments can negatively impact your history. Payment history accounts for 35% of your FICO score.

•   Credit history length. A new line of credit will lower the average age of your credit history. Length of credit history accounts for 15% of your score.

Consumers who are concerned about their credit score may want to take advantage of a free credit monitoring service to see how their day to day actions impact their score.

Using Multiple Credit Cards

How many credit cards should you have? As long as you can responsibly manage your credit cards and haven’t applied for too many new ones in a short timeframe, then the number isn’t likely to have a negative impact on your credit.

However, the more cards you have, the more payments and due dates you’ll have to juggle. Ask yourself whether any of these issues apply to you:

•   Multiple annual fees are taking a bite out of your budget.

•   Monitoring your cards for fraudulent activity has become challenging.

•   Knowing you have cards with low or no balances makes it easier to overspend.

Recommended: How to Use a Credit Card Wisely

The Takeaway

The right number of credit lines varies by personal need and financial circumstances. Lines of credit include but aren’t limited to credit cards. What’s most important is to use them wisely to protect your credit score, avoid unnecessary debt, and manage your finances responsibly. It may help to know that the average American has about 4 lines of credit.

The SoFi money tracker app can help you seamlessly manage your money. Connect all of your accounts on one convenient mobile dashboard to easily see the big picture. SoFi allows you to set multiple financial goals, track your spending, monitor your credit score, and more.

Get a bird’s-eye view of your finances and track your money like a champ.

FAQ

How many lines of credit is good for your credit rating?

Specifics will depend upon your financial situation. Elements that go into credit score calculations typically include the borrower’s payment history (making payments on time is the biggest factor), outstanding balance amounts in comparison to limits, credit history length, having a good credit mix, and strategically applying (or not applying) for new credit accounts.

How many lines of credit is too much?

What’s most important is to have the right number for your financial needs and overall situation. Being able to responsibly manage the number of accounts you have is important since making payments on time is the biggest factor in your credit scores. While most Americans have about four lines of credit, that may be “too much” for some consumers.

What are some consequences of having multiple lines of credit?

It can be more challenging to keep track of payment dates and amounts, which may make it easier to make a payment late or miss it entirely. This can have a negative impact on your credit score. Plus, if accounts have annual fees, then having several of them can add up. Multiple lines of credit may also make it more difficult to spot fraud. That said, if someone can responsibly manage multiple lines of credit, then that may be the right number of accounts for them.

---

Photo credit: iStock/demaerre

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL0822002

Read more

Good car value estimates will factor in as many as a dozen data points, including geographic and economic influences. Less precise tools base estimates only on make, model, year, and mileage. If you’re looking to sell your car, or you’re in the market for a used vehicle, it’s important to familiarize yourself with how automobile valuations work.

Here’s what you need to know to help you increase your chances of getting the best deal.

What to Know About Instant Dealer Trade-In Quotes

A number of dealerships and websites — such as Carvana, Vroom, Truecar and Kelley Blue Book — offer instant cash or instant dealer trade-in quotes for your car. Often, all you have to do is share a few details, such as the vehicle identification number (VIN) or license plate number, and the company will come back to you with a cash offer for your vehicle.

Though a lot of companies make it sound like the process is as simple as that, know that there is likely an in-person review of your vehicle before anyone will cut you a check.

Recommended: What Credit Score is Needed to Buy a Car

What Do Dealers Base Their Car Estimates On?

Instant quotes and valuations usually look at a few quick measures, such as year, make and model, and mileage. This information is enough to provide a rough estimate of value. However, other factors will also come into play. Here’s a closer look.

(Keep in mind, these terms apply only to cars you own outright; different calculations go into valuing a leased car.)

Make and Model

You can think of the make and model of a car as the brand and the specific product on offer. For example, Toyota is a make of vehicle, while the Corolla is a model. Some makes and models are more popular, which helps them hold their value longer. For example, a certain make and model might be known for fuel efficiency or to be safer or more reliable.

There may be numbers or letters next to a car’s make and model that further delineate different features or trim level. Generally speaking, the higher a vehicle’s trim level — the more features it has — the more valuable the car will be.

Recommended: How to Buy a Used Car

Style

A vehicle’s body style is its shape. It might be a minivan, hatchback, or pickup truck. Information about a vehicle style is contained in its make and model. And certain styles are more valuable than others. For example, trucks tend to retain their value better than other car styles. In other words, they depreciate more slowly.

Condition

Your vehicle’s condition means both cosmetic issues like scratches, dents, and wear to upholstery, and also the wear and tear on the engine and other components. The better condition a car is in and the fewer impending repairs needed, the more valuable it will be.

Mileage

Mileage is an important factor to consider because it serves as shorthand for potential wear and tear. The more a car has been driven, the more likely it needs repair or will soon. As a result, cars with smaller odometer readings are worth more.

Accident History

Accidents big and small will hurt the value of a vehicle. Even if a car was in a minor accident and shows no outward signs of damage, value can decrease. Buyers can look up vehicle history reports on sites such as Carfax and AutoCheck, using a car’s VIN.

Car Add-ons

When you buy a car new, you may be offered a series of add-ons, such as splash guards, alarm systems, and tinted windows. While these are often pricey to add to a new vehicle, that doesn’t always translate into increased value for used cars. In fact, according to some experts, once a car is two or three years old, add-ons have little effect on its value. Condition, mileage, and accident history often matter much more to the average used car buyer.

Number of Previous Owners

Used cars that have been owned by only one person may be seen as preferable because the vehicle will have had a consistent driving history and maintenance schedule. Multiple owners will not necessarily hurt the value of a car, but it may raise a red flag if there have been many owners in a short period of time.

Warranties

If a car is still under warranty and that warranty is transferable to a new buyer, it can add value.

Location

Geography can have an effect on car value. For example, the harsh winters and salted roads of the Northeast can take a toll, causing more wear and tear than a warm, dry climate.

Additionally, some types of vehicles may be in higher demand in certain areas, driving up price. For example, you might have an easier time selling a pickup truck in a suburban or rural area than in a big city.

Timeline

The less time an individual has to sell their vehicle, the more likely it is that they may have to accept an offer that’s less than the fair market value, especially in areas where there is not much demand.

The Economy

The value of used vehicles can fluctuate with changes in the economy. For example, supply chain issues and increased consumer demand over the course of the COVID-19 pandemic drove up the price of new and used vehicles. The median price of used vehicles jumped 44% between December 2019 and December 2021.

Rising interest rates can also make borrowing to buy a vehicle more expensive, putting downward pressure on demand, as can a struggling stock market.

Recommended: What Credit Score Is Needed to Buy a Car?

What Buyers Are Looking For

Ultimately, supply and demand drive the value of used vehicles. If buyers are looking for hybrid vehicles over gasoline-only cars, value for hybrids increases. If a certain color falls out of favor, a car may end up being worth less than an otherwise identical model in a different hue.

Recommended: What is The Difference Between Transunion and Equifax

How to Prepare Your Car and Your Expectations

Prepare your car for the highest valuation by tackling as many repairs as you can, from fixing a broken brake light to replacing worn out brake pads. Before an in-person valuation, you’ll also want to have your car washed and detailed to make sure it looks like it’s in the best condition possible.

Manage your expectations for values by doing a bit of research. If you’re looking to sell your car, check out valuation estimates from multiple sources, including Edmunds, Kelley Blue Book, and online dealers. You may even want to bring your car to a local dealership to see what price you might get there.

Similarly, if you’re looking to buy, you can look up the value of various makes and models to help you understand whether the price you’re quoted is close to fair market value.

Recommended: Does Net Worth Include Home Equity

Monitor Your Car Value With SoFi

Good car value estimates will factor in as many as a dozen data points, including geographic and economic influences. Tracking your car’s value is especially important as you plan your budget and save up for a new car. The reason: Your current car’s value can have a big impact on what you can afford in a new or used car.

SoFi’s money tracker app now has an Auto Tracker feature that can give you a better understanding of your net worth and help you identify good times to sell.

SoFi’s new Auto Tracker: Discover real-time vehicle values in just a few clicks.

FAQ

What is the best way to determine the value of a car?

Find out the value of a car through trusted online resources such as Kelley Blue Book or Edmunds. Enter the VIN, license plate number, or the year, make, model, and mileage of your car or truck to get an idea of what it may be worth.

Which car value estimator is most accurate?

Kelley Blue Book and Edmunds are two of the most trusted car value estimators.

How do you know if a car deal is too good to be true?

Red flags that may suggest a car deal is too good to be true include a seller who is rushing you, a seller who won’t give you an accident report, signs of rust or disrepair, and a price that is much too low compared to fair market price.

---

Photo credit: iStock/Talaj

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc’s service. Vehicle Identification Number is confirmed by LexisNexis and car values are provided by J.D. Power. Auto Tracker is provided on an “as-is, as-available” basis with all faults and defects, with no warranty, express or implied. The values shown on this page are a rough estimate based on your car’s year, make, and model, but don’t take into account things such as your mileage, accident history, or car condition.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SORL0622004

Read more

While some states have passed legislation ensuring paid family leave for employees at larger companies, many new parents have to make do with a combination of vacation time, sick days, and short-term disability.

Read on to find out what parents may be entitled to based on state regulations and company policy, and how you can maximize your benefits so you can get paid while on maternity leave.

What Is Paid Maternity Leave?

Paid maternity leave (or paternity leave) refers to the time off with pay that some companies grant employees welcoming a new baby or adopted child. Workers often receive only a percentage of their full-time pay, typically 60% to 80%, with limits based on the statewide average pay.

In the United States, businesses are not legally required to give employees paid maternity leave. According to the Bureau of Labor Statistics, only 23% of civilian workers had access to paid family leave in 2021. The U.S. is the only wealthy nation in the world that doesn’t mandate paid parental leave.

Fortunately, 11 states and the District of Columbia have passed legislation guaranteeing paid parental leave — though some laws don’t go into effect until 2023 or later. Federal workers nationwide are granted 12 weeks of paid family leave.

Recommended: What is The Difference Between Transunion and Equifax

How Long Is Maternity Leave?

Companies that voluntarily provide employees paid parental leave offer an average of 8 weeks. Because many parents find this inadequate — experts recommend 3 to 6 months — even employees with paid leave often extend their leave with vacation time and sick days.

Globally, the average paid maternity leave is 29 weeks.

Recommended: Should I Sell My House Now or Wait

Benefits of Paid Family Leave

Research shows that paid family leave offers many benefits to parents and children. In one sense, the extra income helps families over the longer term, especially in lower-income households.

In another way, the time families spend together boosts the health of parents and children. Mothers are able to fully recover from childbirth, which can take six to eight weeks. And a child’s health is strengthened by the extra bonding time, regular breastfeeding, and reduced exposure to infectious disease.

Paid family leave may also cover other health emergencies, including:

•   Adoption or foster child care

•   Care of a spouse, child, or parent with a serious health condition

•   A personal serious health condition

Recommended: How Much Does It Cost To Adopt a Child?

What Is the Family and Medical Leave Act (FMLA)?

The Family Medical Leave Act (FMLA) is a federal law passed in 1993 that grants unpaid but job-protected family leave for eligible employees of larger companies. Individuals can also take time off to care for any family member with a serious health condition.

The law is designed to help families cope with emergencies that may occur without having to worry about losing their job. It also ensures that leave is available on a gender-neutral basis and supports equal employment opportunity for women and men.

FMLA Maternity Leave Eligibility Requirements

For an employee to qualify for FMLA benefits, both the employer and employee must meet certain requirements.

Employer Requirements

FMLA applies only to employers with 50 or more employees within 75 miles.

Worker Requirements

An employee must have worked for their company for at least 12 months and worked 1,250 hours within the past 12 months. Some part-time workers may not qualify.

State Laws for Maternity Leave

As noted above, 11 states and the District of Columbia have passed paid parental leave legislation, including California, Colorado, Connecticut, Delaware, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Washington, plus the District of Columbia. Benefits and eligibility vary from state to state.

Ways to Extend Maternity Leave

Traditionally, women without adequate maternity benefits have made do by cobbling together vacation and sick days, short-term disability, and unpaid leave. More recently, working from home — sometimes on a reduced schedule — has allowed parents to extend their time at home with pay.

You may want to search for a parental leave consultant in your state, such as MilkYourBenefits.com in California. For a fee, these advisors can provide up-to-date information on family leave law and the benefits you may qualify for.

Recommended: Does Net Worth Include Home Equity

How to Prepare for Maternity Leave

It’s a good idea to prepare financially for maternity leave well in advance. Put away money and save for your baby. Here’s a rough timeline to help you plan for the big event.

1. Research State Laws and Company Policies

Before you announce that you are pregnant, find out what your company and state rules are for maternity leave. You can also look into how your medical insurance will work while you are out and how to add your baby to your plan. Check whether your premiums will go up.

You don’t have to inform your employer at this early stage. Your company should have an employee handbook that outlines family leave benefits, or it might be written into your contract.

If you experience pre- or post-natal health problems (such as high blood pressure, gestational diabetes, preterm labor, or C-section), you might qualify for short-term disability. However, know that disability benefits for pregnancy-related reasons are available only in some states. c

2. Develop a Maternity Leave Plan

Notify your employer of your pregnancy as you begin to show. Prepare for negotiating your leave by creating a plan for coverage while you are gone. For example, suggest a colleague you can train before you take leave. Explain how you plan to keep in touch with work while you are out.

Company maternity leave policy is not set in stone. You can negotiate with your employer to extend your paid time off, or perhaps propose a work-from-home or part-time arrangement.

Your boss may not agree with your plan, so consider it a jumping off point. One tactic is to present to your employer two or three options that you can live with. Your supervisor may well pick one of them. Finally, put it in writing and have it signed so that your employer cannot renege.

3. Start Planning Your Budget

Once you have a general idea of your income during maternity leave, prepare a new budget that includes all of your anticipated expenses. Check out tips on how to budget on a fluctuating income.

A budget planner app like SoFi can make the budgeting easier because it tracks your expenses for you and gives a breakdown of your spending by category.

4. Write a Plan for Your Replacement

Before you write out instructions for those who will cover for you while you are gone, have a discussion with your teammates to make sure they are on board. Include in your instructions the dates that you will be gone, who will be responsible for what, and how you will communicate with your team (whether you will take part in meetings remotely, etc.).

Recommended: Can You Get a Home Loan While on Maternity Leave?

The Takeaway

FMLA requires employers with 50 or more employees to offer up to 12 weeks of unpaid maternity leave. Research the benefits that you’re entitled to based on state regulations and company policy. Your maternity leave may end up being cobbled together from a combination of vacation time, sick days, short-term disability, work-from-home, and unpaid leave.

SoFi has an app that helps you plan for life-changing events like starting a family. From your smartphone, you can track your expenses, explore the debt payoff planner, monitor your credit score, and talk to a financial planner for no cost.

SoFi makes it easy to know where you stand.

FAQ

What questions should I ask HR before going on maternity leave?

You can ask HR what benefits you are entitled to and how your health insurance will change after the birth or adoption. It’s also important to ensure the required forms are completed and any negotiated agreements for maternity leave are laid out in writing and signed by your employer.

How should you prepare financially for maternity leave?

In an ideal world, you would start saving for the baby before you are pregnant. Once you have negotiated your maternity leave and have an idea of your income, create a new budget that includes baby expenses.

Also check whether you qualify for any tax credits such as the Child Tax Credit, the Child and Dependent Care Credit, or the Adoption Credit and Adoption Assistance Programs. Taking out a College 529 savings plan for your child will reduce your taxable income.

What is short-term disability insurance and how does it impact maternity leave?

Short-term disability is an insurance program offered by some employers. Policies vary, but you might be entitled to 50% of your income or more for up to six weeks after giving birth if you have a C-section or experience complications. Check with your staff handbook and your HR department to find out if you might be eligible for short-term disability.

---

Photo credit: iStock/Maria Korneeva

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

SORL0522031

Read more

Cars and trucks tend to lose value as they age and experience wear and tear through everyday use. This loss of value is known as depreciation. How much these vehicles tend to depreciate will vary. For example, trucks tend to hold their value better than cars.

That said, depreciation depends on a number of factors, such as make and model, age, mileage, and accident history. Here’s a closer look at what impacts car and truck value, and how depreciation can differ between the body types.

Recommended: What Credit Score is Needed to Buy a Car

What Is Vehicle Depreciation?

Cars and trucks lose value each year due to normal wear and tear. The rate of depreciation will vary depending on the make and model of a car. However, the first year tends to see the greatest depreciation, when cars lose as much as 20% of their starting value. (For that reason, savvy consumers believe it’s wiser to buy a used car than a new car.) Within the first five years of ownership, a vehicle can depreciate by as much as 60%.

Depreciation is not necessarily an accurate representation of wear and tear on a vehicle. You may find that after a number of years, your car has lost significant value even if it’s in pristine, like-new condition. Deprecation will continue to affect the value of your car until it reaches $0 on paper. At that point, your car no longer has any equity, and is not considered an asset. The only value left is the value of the metal for scrap.

Depreciation is an important factor to understand whether you are buying a used car, a new car, or if you plan to lease a vehicle. When leasing a car, your monthly payment will cover the cost of depreciation.

Recommended: What Credit Score Do You Need to Lease a Car?

Recommended: Does Net Worth Include Home Equity

How Is My Car Value and Truck Value Depreciation Calculated?

There are various sources that supply car depreciation figures, including Kelley Blue Book and Edmunds. Each company has their own algorithm that accounts for the factors that affect depreciation, such as:

Mileage

How much a car or truck has been driven is often seen as a proxy for wear and tear. The more something is used, the more likely it is to wear out. As a result, vehicles that have been driven less tend to fetch higher values.

Make and Model

You can think of the make and model of a vehicle as the brand and specific product on offer. For example, Toyota is the make, while Tacoma is a specific type of truck the company builds. There may be a series of letters and numbers after the model name that further delineates the trim level of the vehicle. Trim level can refer to different features, engine size, or materials used in the making of the car or truck.

Some makes and models are more popular than others, and some models have higher trim levels — both can help a vehicle hold its value longer.

Reputation

A vehicle’s reputation for safety and reliability can play a big role in its popularity. The higher the demand for a particular make and model, the more slowly it may depreciate.

Larger vehicles are typically safer than smaller cars, which helps explain why trucks tend to hold their value longer. When measuring vehicle fatalities per 10 billion miles, cars average 36 deaths, while trucks average 18 deaths, or half the number of car fatalities.

Fuel Economy

More fuel efficient vehicles may also hold their value better than gas-guzzling counterparts, especially when fuel prices are high. Diesel trucks may depreciate more slowly than gasoline-powered cars and trucks because they tend to have more powerful engines, better fuel economy, and emit less carbon dioxide. A gallon of diesel contains roughly 10% to 15% more energy than a gallon of gasoline, and as a result, a diesel engine can go 20% to 35% farther on a gallon of fuel.

Local Market

Your local automobile market can also have a big impact on how much your car depreciates. For example, trucks may be in higher demand in rural areas, while cars may be more popular in urban settings. Vehicles with four-wheel drive may be more sought after in places with snow, while convertibles may be in higher demand in warm, sunny climates.

You may be asked for your zip code when you look up the value of your car. This can help valuation companies zero in on how much your car is worth in your locale.

Recommended: What is The Difference Between Transunion and Equifax

Average Truck Value vs Car Value Depreciation Comparison

Cars and trucks begin to depreciate as soon as they leave the lot. As mentioned above, they can lose as much as 20% in the first year alone, and up to 10% each year after that. By year five, a vehicle may have depreciated by as much as 60%.

That said, various types of cars and trucks tend to depreciate at different rates. And depreciation can vary a lot depending on current economic conditions. For example, Recent supply chain issues and increased demand have caused a drop in depreciation. Used cars have become more valuable as there are fewer cars entering the market. In 2021, the average five-year-old vehicle depreciated by 40.1%, compared to 49.1% just a year earlier in 2020, according to research by iSeeCars.

The same research states that trucks held their value best of all vehicles. Midsize pickup trucks depreciated just 21.4% over five years in 2021, while full-sized pickups’ five-year depreciation was 31.8% on average.

Small cars, including compact and subcompact cars, depreciated an average of 36.3% over five years, while midsize cars depreciated an average of 43.6% over five years.

Here’s a side-by-side comparison of car and truck depreciation:

Cars	5-year Depreciation	Trucks	5-year Depreciation
Small Cars	36.3%	Midsize Pickups	21.4%
Midsize Cars	43.6%	Full-size Pickups	31.8%

Recommended: What Should Your Average Car Payment Be?

Monitor Your Car Value With SoFi

Recent research confirms that trucks hold their value the best of all vehicles. And while size matters, bigger isn’t better when it comes to depreciation. Midsize pickup trucks depreciated less than full-sized pickups, and small cars depreciated less than midsize cars. If you plan to trade in your car or truck after a few years, consider buying a vehicle that is likely to hold its value longer to get a better trade-in value.

SoFi’s money tracker app now features Auto Tracker. Discover real-time vehicle values in just a few clicks.

Keep tabs on your car or truck’s value with Auto Tracker from SoFi.

FAQ

At what mileage do cars lose value?

Cars and trucks unfortunately start to lose value as soon as you drive them off the lot. After that, depreciation is calculated each year.

Does mileage affect car value?

Mileage is one of the most important factors that go into car valuation. The higher the mileage, the more wear and tear the vehicle is presumed to have, and the less the vehicle will be worth.

At what age does a vehicle depreciate most?

Cars and trucks depreciate most in their first year, when they can lose 20% or more of their value.

---

Photo credit: iStock/timnewman

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc’s service. Vehicle Identification Number is confirmed by LexisNexis and car values are provided by J.D. Power. Auto Tracker is provided on an “as-is, as-available” basis with all faults and defects, with no warranty, express or implied. The values shown on this page are a rough estimate based on your car’s year, make, and model, but don’t take into account things such as your mileage, accident history, or car condition.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

SORL0622007

Read more

Antisocial people tend not to like being around others, which can sometimes be a barrier to getting certain jobs. In reality there are plenty of jobs that do not require any social interaction, making them perfect for an antisocial person.

What Does It Mean to Be Antisocial?

The clinical definition of “antisocial” is someone that shows no regard for others and does not want to be in the company of other people. However, in common usage, antisocial can be used to describe someone that prefers to be alone most or all of the time.

Why It Can Be Difficult for Antisocial People to Find Work

Most jobs require at least some form of interaction, either with customers or coworkers. This can be a struggle for an antisocial person, who would likely prefer to find work that requires limited or no interpersonal interaction.

Antisocial people may also experience anxiety about job interviews, which are typically a prerequisite in the hiring process for many jobs.

What Makes the Ideal Job for an Antisocial Person?

An antisocial person may want to find a job that requires no interaction and can be done from a quiet and isolated location at their leisure. Self-employment can be a career path for antisocial people to consider or jobs that only require interaction through virtual (email, text, etc.) correspondence.

What Kind of Work Does Not Suit an Antisocial Person?

Any job that requires a lot of engagement with others, such as customer service or retail, would likely not be a good fit for an antisocial person. At the same time, any job that requires a lot of on-the-job training or management would likely not be ideal.

15 Entry-Level Jobs for Antisocial People

Antisocial disorder is often diagnosed at a young age. For those looking to start an entry-level career, here are 15 jobs that are well-suited to an antisocial person (with salary data from the Bureau of Labor Statistics):

Computer Programmer

2021 median salary: $93,000
Primary Duties: Write and test code and scripts that enable computer software to function.

Farmer or Rancher

2021 median salary: $73,060
Primary Duties: Oversee the production of crops, livestock and dairy products.

Writer and Author

2021 median salary: $69,510
Primary Duties: Write original copy for personal or business websites.

Aircraft Mechanic

2021 median salary: $65,550
Primary duties: Repair, inspect and perform maintenance on various aircraft.

Craft Artist

2021 median salary: $49,960
Primary Duties: Create original works of art for sale and exhibition using a variety of materials.

Truck Driver

2021 median salary: $48,310
Primary Duties: Pick up, transport, and deliver packages or goods from one location to another.

Machinist

2021 median Salary: $47,940
Primary Duties: Operate mechanical- and computer-controlled equipment used to manipulate metal parts, instruments, and tools.

Embalmer

2021 median salary: $47,780
Primary duties: Prepare the bodies of the deceased for interment.

Medical Transcriptionist

2021 median salary: $30,100
Primary duties: Transfer voice recordings from physicians and other healthcare professionals into formal reports or other documents.

Proofreader

2021 median salary: $43,940
Primary duties: Read content and correct for spelling, punctuation, and grammatical errors.

Assembly Line Worker

2021 median salary: $37,170
Primary duties: Use hand tools or machinery to produce vehicles, electronic devices and other materials and goods.

Animal Trainer

2021 median salary: $31,280
Primary duties: Teach animals skills such as obedience, performance, riding, security, and assisting people.

Veterinary Assistant

2021 median salary: $29,780
Primary duties: Feed, bathe and take care of animals in need of treatment.

Janitor

2021 median salary: $29,760
Primary duties: Clear and sterilize buildings, schools, hospitals and other commercial businesses.

Crematory Operator

2021 average salary: $37,490
Primary Duties: Perform cremations, including the preparation and transfer of the body post-service.

Recommended: High Paying Trade Jobs in Demand

The Takeaway

Having antisocial tendencies doesn’t mean you can’t find a fulfilling career. In fact, many jobs offer solitude and limited people interaction, which can appeal to many antisocial and introverted individuals.

Regardless of your chosen career path, it’s important to exercise responsible spending and money habits and keep track of your financial goals.

SoFi can help you track your money like a champion, with tools for monitoring your credit score, setting financial goals and monitoring your spending.

FAQ

What jobs require no social interaction?

Computer programmers that work from home, janitors that work night shifts, and farmers and ranch-hands typically have little to no social interaction in their day-to-day work.

What is a good job for antisocial people with no experience?

Artisan jobs, online bloggers, and transcriptionists all provide strong starting salaries and require no formal degree or experience.

---

Photo credit: iStock/ferrantraite

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL0522025

Read more