After a house, a car is often one of the biggest purchases we’re likely to make. But unlike our homes, we buy cars usually in the knowledge that after several years of ownership they will be worth less than we bought them for. Even more so when buying a brand new car. That’s why one of the most efficient ways to avoid a steep depreciation of value on your vehicle is by opting for a used one.
But what causes the often dramatic depreciation in value? And what can we do to try and retain some of the value for when the time comes to sell?
Well, here are a few reasons that might be behind that drop in price, and suggestions of what you can do to prevent it falling further.
Keeping your mileage down can be a huge help for your car retaining it’s value. It’s assumed that greater mileage increases the chances of your car encountering faults due to natural wear and tear. Around 10,000 miles is the yearly average for most cars, so anything significantly higher than this and you can expect it to bring the value down.
Regular service history
Potential buyers understandably want to see that a car has been serviced regularly and properly taken care of. So keep hold of all documentation that shows this. It requires little extra effort on your part but could quite literally pay-off when it’s time to sell.
Bigger cars typically depreciate in value at a faster rate than smaller cars. This is largely due to bigger cars costing more to run, and as they’re often luxury vehicles they can also cost more to repair.
A more desirable car will retain its value longer as you might expect. However, there are other ways you can ensure your car is still desirable, such as avoiding quirky colours. They might seem appealing if you’re constantly losing your car outside of the supermarket, but when it comes time to sell then more conventional colours may hold greater value for their wider appeal.
The length of warranty left on a car can also be a big consideration for potential buyers. Some manufacturers now offer as much as 7 years, but even 3 is good. Having warranty still left on your car when selling it will help retain value, so it might be wise to factor this in when deciding when to sell.
People care about the actions of the person they’re buying from. A seller who regularly does long drives in the car will be less appealing to buy from than someone who only occasionally potters to the shops in theirs. And the fewer previous owners, the better.
To find out how much your car could be worth, take a look here.