Average Deprecation Rates On Vehicles
As a motorist, it is important to be aware of depreciation and why you need to factor this in when buying (or selling) a car. Cars start depreciating in value from the moment that they drive off the lot and can lose as much as 50% of their value after just 3 years. The rate of depreciation varies depending on a few factors, so you will want to know a few tips and tricks for sidestepping depreciation so that you can avoid losing out on money.
Factors That Impact Depreciation
So, what factors have an impact on a car’s depreciation rate? There are many factors here with the make and model obviously being key. In addition to this, the mileage, general condition of the vehicle, fuel efficiency, service history and availability of documentation and receipts can all play a factor. This means that every car depreciates at a different rate, but the good news is that this also means that you can find ways to slow the rate of depreciation and avoid losing out on money.
Slowing the Rate of Depreciation
To slow the rate of depreciation, you should first research the make and model. Brands and models that are heavily in demand will depreciate slower, so you will find it best to go for the big brands. In addition to this, you should also choose a car that is fuel-efficient (for more reasons than one). It is then a case of keeping the vehicle in good condition, which you can do by sticking to the service schedule, carrying out basic maintenance tasks, regular cleaning and keeping your mileage down.
Avoiding Depreciation Altogether
Deprecation can be stressful and even a car that is well maintained will still lose value and this can be a significant amount when you buy new or nearly new. There is one intelligent solution that allows you to sidestep depreciation altogether and this is to lease. When you lease a vehicle, you never technically own it so you can simply return the keys at the end of the agreement and take out a lease on a newer car. There are many benefits to leasing a vehicle, but avoiding depreciation is arguably the best and could save you thousands of pounds and the frustration of lost value.
Depreciation is something that every motorist needs to be aware of and factor into their decision when choosing a new car and selling their old one. Cars depreciate by a huge amount in the first few years and the rate then tails off after this, but there are also many controllable factors that could soften the blow or even allow you to completely avoid the headache of depreciation when choosing a new car.