HOW TO AVOID CAR DEPRECIATION
The value of a new car can fall at an alarming rate. Whilst this varies across manufacturers and models, there are several factors which can affect the value of your vehicle when you come to sell it.
Find out all you need to know about car depreciation, what effects car depreciation and how to minimize those effects in this blog from Top Quality Motors ltd.
What is car depreciation?
Car depreciation is the difference between the value of a car when you buy it and the value of the same car when you come to sell it. The value of most vehicles drops over time, however, there are several factors which can reduce that value much faster.
Typically, a car loses between 15-35% of its value in the first year and up to 50% or more over three years.
Choosing a car which holds its value well delivers much bigger savings over time, but for those who already own a car or have their eyes set on their dream car, there are ways in which you can avoid car depreciation and help to maintain your vehicle’s worth.
What can affect the rate of car depreciation?
There are several factors which can contribute to car depreciation. It is also worth noting that these factors can also affect the efficiency and safety of your vehicle on the roads. Here are some of the reasons why your vehicle may result in a loss of value:
It goes without saying that the more miles your vehicle travels, the less your vehicle will be worth. High mileage can drastically affect the efficiency and safety of a vehicle and could mean that your vehicle needs servicing more often.
If your vehicle is dented, has damage to the interior or exterior, or has been involved in an accident, then this will reduce its value. If your vehicle has minor damage, consider repairing this before selling to increase the amount it is worth. If repairing the damage would be more expensive than the amount you would likely get for the car, then consider other options. Could you scrap your car or sell it for parts and get more money? There are many sites online which will give a competitive quote for your vehicle, and most will accept vehicles in any condition.
The more complete your service history is, the better. A vehicle’s service history is a sure-fire way of detailing the work that has been carried out on the vehicle and proves that the vehicle has been well looked after. This can make a huge difference in the final price when selling your vehicle – some buyers won’t even consider making a purchase if there is no logbook. The service book should have stamps or receipts showing servicing in line with the manufacturer’s recommendations
The number of previous owners
When it comes to purchasing a vehicle, the number of previous owners can play a big part in the final decision making. If a vehicle has plenty of previous owners, it would leave a person to question why. Generally speaking, the fewer owners the better. You can check the number of previous owners on the car’s logbook or on the V5C registration.
Whilst fuel economy is something which varies across different car makes and models, this can also be affected by the condition of your vehicle. Before selling, make sure that your vehicle is running at an optimum level and is as efficient as can be. The more fuel-efficient your vehicle is, the more likely it is to sell.
Road tax costs
In a similar way to fuel economy, a vehicle which is expensive to tax may also be harder to sell. Whilst there is nothing that you can do to improve this, it is something to bear in mind when trying to sell your car.
Simply put, some cars are more desirable than others. Desirability can depend on a number of factors, the most obvious being personal taste. Modifications can also play a big part in the desirability of your vehicle. Not everybody wants to drive a car with racing stripes or an HD sound system which has been fitted in the boot.
Some cars have a reputation for being unreliable or are prone to experiencing issues. Again, whilst this is something that can vary from vehicle to vehicle when selling your car take a look at customer satisfaction surveys first to get a feel for what other people are saying about the car. Then, put forward your opinion and make a case for your vehicle.
How to minimize the effects of car depreciation
- Try to keep the mileage down
- Maintain your car well and repair any damage as soon as possible
- Try to keep a complete record of your service history, including receipts and records. This will give potential buyers some peace of mind
- Avoid modifications such as spoilers, wide wheels and flared wheel arches which can make a vehicle less desirable
- Consider buying a nearly-new or second-hand used car to avoid the steepest depreciation
- Do your research before buying a car – see how much values have gone down on older models and similar vehicles from the same manufacturer
- Choose the right options when you buy – for example, metallic paint and leather are more desirable on executive cars, while built-in sat-nav and air-con are more desirable on mainstream cars
- Think about the color – whilst a shocking pink car may appeal to you, it may put off potential buyers if you look to sell your car in the future
- Sell at the right time of year – different vehicles will appeal at different times of the year. For example, people are less likely to purchase a convertible in the middle of winter
We hope you found this article on how to avoid car depreciation insightful. For more driving tips and other interesting articles, visit the Top Quality Motors Ltd page.