If you are a car lover and your car is your most prized possession, then there are some important things you need to know about car depreciation. Owning a quality car can give you a great deal of satisfaction. If you would like to buy a quality car using car finance, make sure you contact a reliable car finance broker who can arrange a great car loan for you.
What is car depreciation?
Car depreciation refers to the amount of value that your car loses over time. Some larger vehicles tend to depreciate quickly. Within the first year, the value of a car can drop by as much as 20 per cent. Depreciation over the next four years can be up to 10 percent per year. Depreciation becomes more apparent when you try to sell your vehicle. Some people who have purchased their vehicle using any form of credit may owe more money to the lender than the value of their vehicle. This maybe because of they haven’t owned the vehicle for very long, maybe down to the interest rate charged by the lender or several other factors.
Factors that could cause significant depreciation
The mileage that a vehicle has covered since it was first registered or since it was bought can be an important factor that could affect the amount of depreciation. An engine that has been running for 150,000 miles is more likely to break down than an engine that has covered 30,000 miles. An excessive number of miles has a huge negative impact on any potential vehicle resale value.
The vehicle manufacturer’s reputation can also impact a vehicle’s depreciation. Some vehicles manufactured by some of the perceived more prestigious marques can command a higher resale price than those perceived to be of a lesser quality manufacturer. There several car magazines that run regular updates on what used vehicles maintain their value better than others.
Some cars can have a lower resale value because it may have an unusual colour, or it may smell of cigarette smoke or shows excessive signs of wear and tear. Even nonstandard accessories fitted to the vehicle can affect the resale value.
Ultimately, the amount of depreciation will be determined by the person who buys the vehicle and how much they are willing to pay. The best way to reduce the depreciation of your vehicle is to take good care of it. You should treat your vehicle as the asset that it is.
The vehicle’s appearance will be the first thing the buyer will see. After a good valet, polish your car which is an inexpensive way to make your vehicle look better. Keep to the manufacturers recommended service intervals. Make sure your vehicle is free of any unpleasant smells.
Car Depreciation Facts
- Brand new models may devalue gradually over time.
- A newly registered vehicle could lose a lot of its value once it’s driven away. This could be as much as 40% depending on the manufacturer and the model after the first year.
- If you complete 12000 miles every year, a standard vehicle could lose as much as 60% of its value before the end of its fourth year.
- The higher the mileage covered will affect the vehicle’s resale value.
- Eco-friendly vehicles will, in general, devalue at a slower pace.
If you are looking for a reputable motor finance broker to help you deal with car finance or loan, then you can visit New Look Loans Ltd. They can help you in getting access to your car on easy terms and conditions.
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