Why is your car losing value by the day?
As a car owner or one to be, you most likely will be aware of the fact that your car’s value will depreciate from the first time you start the engine.
Do you know why your car is losing value by the day and how to minimise this? Jack and the team share with you some professional advice to help you minimise your car’s value depreciation.
What is depreciation?
Most cars lose between 50% and 60% of their value in the first three years of ownership. The rate of depreciation is dependent on a variety of factors, which broadly fall into three categories: price, running costs and quality – both perceived and actual.
Depreciation in the value of a car is as inevitable as death and taxes. The good news is that it’s possible to identify the worst offenders and mitigate its effects, most of which we have outlined below.
What affects a car’s depreciation rate?
Here are the reasons why some cars depreciate more quickly than others:
The more mileage you have, the less it will be worth – it doesn’t take a genius to work that out. The average mileage is around 10,000 per year so if the average number of miles your car has travelled is lower than this, your vehicle’s value will be worth more than the average.
● Car Condition
Damage to the exterior and interior of the car will decrease the vehicle’s value. Any damage to the bodywork, upholstery or electronics can all have an effect on the price you can expect to get for the car – Make sure you inspect a used car carefully before buying.
● Number of Previous Owners the Car has had
The fewer the better. Be sure to check the number of owners your car has had in your logbook or V5C registration.
● Car’s Service History:
Having a full-service history for your car is a great way to reassure the buyer of the car’s condition, so the more complete your service history is, the better. We were able to give James a better price for his car after he has located the service history of his car, as it does add significant value.
● Remaining Warranty
If your car has some of its manufacturer’s warranty left this could increase the value of the vehicle. Three years is good, but some manufacturers now offer as long as seven years, which is a bonus when selling your car.
The more recent the model, the better it will hold its value because it’s more desirable when it comes to resale due to having the newest design with better specification and features.
Big luxury cars tend to depreciate more than smaller cars because they cost more to run and have higher bills for parts and maintenance.
● Fuel economy
A car holds more value when it has a higher number of miles per gallon because it means being more affordable to run. This is one reason why diesel cars hold their value slightly better (or at least used to!) than petrol cars, although petrol car engine efficiency is rapidly improving.
● Road Tax
Fuel-guzzling cars cost much more to tax each year, which makes them less desirable when selling second-hand.
How to Minimise Your Car’s Depreciation?
While many of these factors are based on demand, there are some things you can do to reduce the effects of depreciation on your car.
Here are a few tips to keep in mind if you are planning on reselling a car in the future:
Tips for minimising depreciation:
1. Keep the mileage down
Try and avoid unnecessary driving to keep the mileage down. This will preserve some of your car’s value, at least if you can keep it down to less than the yearly average number of miles as outlined above.
2. Look after your car
Maintaining a full-service history will give buyers more confidence in the condition of your vehicle when you come to sell it. A car should be serviced (oil and filter changes) annually or every 10-12000 miles – depending on which comes first. Without documentation of this we must assume that the car has not been serviced and therefore it has less value.
3. Buy a nearly-new or used car to avoid the steepest depreciation
When buying a car, although older cars are cheaper, purchasing a newer car will hold much more value when you come to sell it.
4. Avoid modifications
Avoid ‘boy racer’ modifications such as spoilers, wide wheels and flared wheel arches. These customisations will reduce the value of your car, as well as drastically narrowing the number of people who would be interested in buying it from you.
5. Sell at the right time of the year
Do your research on this – Convertibles sell for a much higher price in the summer and 4×4’s in the winter for example. Another consideration is sell your car well before its replacement model arrives in the showrooms. Here are some tips on when is the best time of year to sell your car.
6. Stick to popular colours
An outrageous shade might appeal to you, but will put off many buyers when you want to sell your car. The most popular colours are black, silver and white.
7. Do your research before buying a car
See how much value has depreciated on older models and similar vehicles from the same manufacturer as the car you’re looking to buy. This will give you an indication as to how well the value of your car will hold.
So there you have it. Although some of these are simple tips, it’s a good reminder of what you can do to try and prevent your car from rapidly depreciating.
You can also read more on why new cars lose value so rapidly.
If you are looking to sell your car, get your free valuation from https://www.sellyourcar2jack.com/ today!