Why Do Cars Depreciate Daily?
Most people will be aware of the fact that car depreciation will start to occur as soon as the vehicle is purchased at a dealership.
There are many ways to prevent your car from depreciating, here at SVS Cars, we have decided to try and help our customers understand the best way to prevent a car’s value from dropping excessively.
What Is Car Depreciation?
The average car will generally lose between 40% and 50% of its value in the first three years of ownership. How much a car depreciates is dependent on a variety of factors, which would fall into three categories: purchase price, running costs and build quality.
Furthermore, depreciation in the value of a car is as unavoidable except for extreme circumstances such as with certain supercars and classics which generally only appreciate in value. However, it is very easy to avoid excessive depreciation of a vehicle which we discuss further below.
What Makes a Car’s Value Depreciate?
Here are some reasons why cars generally depreciate in value:
The higher the mileage, the lower the value – The average mileage of a car is around 13,000 per year so if the average number of miles your car has is lower than 13000, a vehicle’s value will be higher than average.
● The Condition of the car
Any damage to the interior or the exterior of a car will decrease its value. Any damage to bodywork, upholstery or electronics will all have an effect on the price that one can expect to get for that car.
Moreover, a vehicle inspection is always the best way to get an idea of a car’s mechanical condition if you are not mechanically minded.
● Number of previous owners
Always check the number of previous keepers a car has by using the logbook/V5C certificate.
● Documented service history
A full-service history of a vehicle is the best way to understand a car’s potential mechanical condition. Additionally, a stamped service book with dates and mileage with each stamp is the best way to ensure the vehicle has been serviced regularly and on time.
● Outstanding Warranty
Many cars come with extensive warranties from manufacturers nowadays. Selling a car with a warranty can help it sell for more money.
The newer the model, the more likely it will hold its value. Desirability can make a big difference in selling due to having the latest model car that more people will want to own themselves.
● Car size
High-end executive cars tend to face car depreciation quicker than smaller more economical cars as bigger cars tend to cost more to repair and more to run compared to smaller cars.
● Fuel economy
The more fuel efficient a car is, the more it will generally hold its value. Diesel cars generally cost more to purchase and hence hold their value more as they are cheaper to run compared to a petrol equivalent.
● Car tax
Cars that put out high emissions and use more fuel cost a lot more to tax than greener vehicles.
Best Ways to Prevent Car Depreciation
Here are some of the best ways to stop a car from depreciating in value:
1. Use as few miles as possible
Only using a car when necessary is the best way to help keep the mileage down. Trying to stay under the 13000 miles per year average is a great way to do that, thus prolonging car depreciation.
2. Car Care
Making sure you get your car service in time is a great way to prevent the value from falling unnecessarily. Always follow the manufacturer’s recommended service interval or exceed it. This will show potential buyers that you have looked after the car and saved them potential unnecessary bills and headaches.
Additionally, being careful with your car on a daily basis is a great way to stop it from facing car depreciation. For example, don’t open the car doors with keys in hand as this will almost always leave damaged paint around door handles and edges.
Moreover, make sure to always use mats on the floor as carpets will evidently show the car’s condition.
Are you looking to purchase a high quality car for the cheapest possible price? Check out our car buying service, here.
3. Buy a late model used car
Buying a newer car will always help hold its value more than an older car would. Newer cars generally mean less chance of breakdown hence they will be more desirable to potential buyers.
4. Keep the car original
Any non-factory modifications will almost always lower the value of a car and in some cases make a sale nearly impossible.
Furthermore, most buyers only look at unmodified cars when looking to buy their next car. Anything from aftermarket electronics to non-factory installed body kits will affect a car’s value drastically.
5. Know when to sell
It is quite simple when you think about it, convertible cars will almost always sell better during the summer and 4-wheel drive vehicles will generally sell better in the wintertime.
Therefore, waiting to sell your car at the right time can help increase its sale price.
6. Choose the right colour car
Each year cars change colours as much as designers change their clothes. Some years have more popular colours than other years, but that doesn’t mean that colour will always be in fashion.
Historically, the most popular colours year on year have been black, white, silver and blue.
7. Choose the right car
Buying a higher quality car in a popular colour, with a desirable specification and a reliable engine is the best way to make sure you start with the right car from the start.
Additionally, checking the reliability of certain cars online from current or previous owners can be a good way to prevent buying the wrong car. However, take forums with a pinch of salt, people generally only write reviews after a car has given them problems. You never hear of all the other millions of happy owners with many thousands of fault-free miles.
On the other hand, some cars are doomed from the factory, with design faults or serious recalls. Issues like this will also hit a cars resale price drastically.
Have you read our previous blog article, ‘Is buying a car at auction cheaper?’ Don’t miss out! Click here to read it.
Minimising Car Depreciation with SVS Cars
Now you’ve learned how to reduce the depreciation of cars in a number of ways. We hope this information will be helpful to our customers and readers and it aids you in getting more money for your car when the time comes to sell it.
If you have any more questions regarding your car depreciating or our services, please do feel free to get in touch with us.