Car Depreciation: Ins & Outs

mileage

The deprecation rate of cars is always a factor you should look at before buying a car. There are certain cars which are able to hold their value better than others, but there are things you can do, as the driver, to try and keep this as high as possible for a long period of time.

What is car depreciation?

Car depreciation is essentially just the value of the car from when you first buy it, up until you sell it or part exchange.

In the first year of having the car, this is where the biggest drop in depreciation costs occurs but after the third year the rate does slow down. When approaching the eight year, the depreciation cost will come to a stand-still. Classic cars and those which are limited tend to hold their value a lot better than those we see every day; sometimes a profit is made with these cars.

Influences
1. Mileage: The higher the mileage of the car, the lower the value of the car. Try to only make necessary journeys to keep this to a minimum.
2. Condition/Quality: This is possibly the factor which contributes the most to the cars value. The better the cars condition, the higher the re-sale price will be. If any damage has been done to the body work, paint or the interior, the value will decrease.
3. Size: The size of the car does contribute to the overall value of the car as the bigger luxury cars cost more to run and therefore lose value in comparison to the smaller cars.
4. Popularity: If a car is popular, just like the Ford Fiesta or Vauxhall Corsa, the car manufacturers would’ve produced millions of different models. Because of this, it causes the depreciation cost to increase, due to easy access.
5. Fuel Economy: If the car offers more miles per gallon, it will have a higher resale price. Diesel cars tend to have a higher value in the market due to this, but petrol cars are slowly catching up as their engine efficiency is beginning to improve.

Minimise
There are a selection of ways in order to try and keep the value of your car as high as possible. This includes:
1. Car Maintenance: This is the easiest and possibly the most effective way to keep that value sky high. The cars appearance both inside and out contributes to the final price, so keeping it clean will help you in the long run and aim to save you money. You can also do this by driving safe, in order to minimise any collisions.
2. Modifications: Make sure these are avoided at all costs, the more modified your car is, the lower its re-sale value. These include features such as spoilers, wide wheels etc.
3.  Mileage: The lower the better. Customers looking for a second-hand car tend to avoid those will a mileage of 100,000 or more.
4. Replacement Models: With the popular models, car manufacturers tend to release a new and ‘face-lifted’ model every couple of years. In order to get the best price, make you sell your car before the new model arrives.
5. Car Leasing: This is possibly the best alternative in order to completely avoid car depreciation, as it’ll be included within the monthly payments. There are a range of different lease cars available to choose from in order to find your perfect match in which you can swap, return or buy once the leasing period comes to an end.

Which cars hold their value the best?
– Audi Q5
– Skoda Yeti
– Abarth 500
– Volkswagen Scirocco
– Audi A3
– Fiat 500C

The ‘luxury’ car manufacturers (BMW, Audi etc.) tend to hold their value a lot better than the average everyday car. Companies like Vauxhall and Ford produce a high number of a model as they’re very high in demand, which makes them perfect for used car leasing.

 


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