Aside from property, antiques, or other rare collectibles, pretty much everything we buy loses value from the minute of purchase. Unfortunately, cars are particularly bad when it comes to depreciation, and it is common knowledge that from the minute you drive a new car off the forecourt, its value will have already started dropping.
The startling depreciation of new cars
Car experts suggest most cars depreciate by as much 15% and 35% during their first year and by as much as 50% by year three. However, that doesn’t mean there aren’t steps you can take to help minimise the drop in value of your car. Below are a few tips and tricks you could try to help you maintain a higher price when selling your vehicle.
Drive less: By far, the biggest factor in car depreciation is high annual mileage. As a rule, you should try to drive your car a maximum of 10,000 miles per year – anything over that most industry experts consider excessive use.
Buy a used car or one that’s nearly new: The steepest depreciation in the value of most cars occurs during the first year of ownership, so you could avoid taking the greatest hit by buying nearly-new towards the end of its first year. As noted above, by the time a car reaches its third year, it will be worth around half its original value, making this a good time to buy if you’re looking to invest in a used car.
Look after your car and have it serviced regularly: Prospective car buyers will expect to see a full-service history before purchasing a vehicle and may also perform an HPI Check free. Keeping your car regularly serviced provides a good sign that the vehicle has been well looked after and will go a long way to helping hold its value over time.
Bear in mind the time of year you go to sell: Demand for convertibles will, understandably, be considerably lower during the winter months. Likewise, there will be much lower interest in rugged 4×4 cars through the summer, so choose the time you try to sell your car wisely.
Think about leasing a car rather than owning: The best way to avoid car depreciation is to lease rather than own, thereby offsetting the lowering value to your provider.
Avoid garish or potentially unpopular colours: While you might be particularly keen on fuchsia pink for the exterior of your vehicle, it’s unlikely many potential buyers will be, and you’ll significantly reduce your potential market if you buy a car that has limited appeal.
Choose desirable options and accessories: When you’re buying a new car, think about the needs of another potential buyer further down the line. Generally accepted executive cars are more desirable if they have metallic paint and leather seats/interiors while the more important options for mainstream vehicles are satellite navigation systems and air conditioning.
Do thorough research: You should check to see how models of the same (or similar) cars from the same manufacturer have depreciated over the years to get a ballpark idea of how your new car might perform.