Used Car Depreciation – Is Your Vehicle Holding its Value?
Consider that you are now a proud owner of a brand new vehicle for which you have spent a large amount of money. How much would it be worth in a year? Even if you do maintain it well, take it for regular repairs and keep it in great condition, the value of your car would reduce considerably as time goes by. This effect is called depreciation, and according to a research conducted by CAP Automotive; you may end up paying almost three times as much as your fuel expenditure for the depreciation in the value of your car.
Used car depreciation contributing factors
The value of each car reduces at different rates, but it is typically observed to be between 15 and 35 percent in the first year after purchase and can cross 50% in three years. To check if your vehicle is holding its value, you need to know what contributes to the increase in its rate of depreciation. The following factors contribute to your car’s faster depreciation:
- A number of owners: The more the number of users of a single car, the higher its rate of depreciation. The number of previous owners can be checked on the V5C registration.
- Service history: The more the number of services you complete, the higher will be the selling value of your car.
- General Condition: Any damages to the bodywork or the interior parts of your car will reduce the selling value.
- Mileage: The more you use the car, the lesser will be its selling value. Check the number of miles that your car has run.
- Fuel Economy: The more miles your car can run per gallon of fuel, the higher would be its value in the market.
- Size: Larger, more luxurious cars cost more money to run and maintain, which is why they depreciate faster than smaller cars.
- Desirability: Some models of cars are re-released with improvements in technology, exterior design, and some additions. The more recent the model, the slower your car will depreciate.
How do you minimize depreciation?
The knowledge of all the contributing factors is sometimes not enough to reduce the depreciation of your vehicle. There is no substitute for market research, where you can get an accurate idea about the value of your car. By keeping in touch with current events, you will know when your vehicle’s replacement model arrives, and you will also realize that popular colors sell at a higher price. With some knowledge and eye for an opportunity, you will be able to get the best value for your car.
Let Auction Direct USA help you in choosing just the right used car for you and your family with your budget in mind. Whether you’re looking for used cars in Raleigh NC, Jacksonville FL, or Rochester NY, we have many used cars to choose from! Visit our used car dealership near you today!