What is Vehicle depreciation?
Car Depreciation Defined
Before we get into depreciation, we need to be clear on what depreciation is. Car depreciation can be defined as:
The disparity between the price you paid for a vehicle and its current value is called depreciation. A new car loses 15-35% of its value in the first year after purchase and about 50% of its value in the third year.
So, if you purchase a new car today for €20,000, it would be worth about €16,000 in a year and €10,000 in three years.
How fast does my car depreciate?
It's not quite that easy to estimate accurately vehicle depreciation is influenced by mileage and condition and differs greatly between models.
Because of the increased interest in vehicles that are less expensive to run, and more fuel-efficient cars, depreciate more slowly depreciation less.
Model replacement cycles often affect depreciation, so a brand new model may depreciate more slowly than one that is about to be replaced by a newer version.
How Much Is My Car Worth?
Reasons Your car depreciation?
Several factors influence the pace at which your car depreciates and how much people are willing to pay for it.
Any of these considerations, such as age and the number of previous owners, are best made before purchasing a vehicle. For instance, you will discover that buying a five-year-old car with low mileage is a better deal than buying a brand-new car because the previous owner has already absorbed the majority of the depreciation.
What contributes to vehicle depreciation includes:
- Previous owners
- Warranty and service history
- Brand and model reliability
- Brand and model desirability
- Fuel economy
- New Models
- Size and cost
- Road tax
Minimising Your Lose
Depreciation is an unavoidable aspect of car ownership. Although you can't stop it from happening, there are some things you can do to slow it down.
The condition of the car is a factor that you can control in depreciation, and this can have a significant impact on the market value of your vehicle. While appearances can be deceiving, keeping your car clean and tidy – both inside and out – as well as fixing any signs of harm can help you win over a buyer.
Similarly, the month you decide to sell your car may have an impact on the price you get. Convertibles tend to sell for more at the start of summer, while 4X4s tend to sell for more as the days get shorter.
- Try to maintain low mileage - The average is 10,000 miles per year.
- Fix any minor damage such as small scraps, chipped windscreen.
- Get an up-to-date NCT. Most buyers want a car with more than three months left on the NCT. Vehicle Tax is also important and could be the deal-breaker.
- Clean and maintain your car regularly – Weekly washing of the interior and exterior of your vehicle will benefit you in the long-term.
- Keep to the manufacturer service and maintenance schedule. Also, keep a service record Maintaining a stamped service book can.
- Sell your vehicle before the new model comes out. This way you are sure to get the most for your vehicle.
- Sell your Convertibles in summer and 2-Wheel Drive SUV in winter.
- Don't undertake too many changes such as sidesteps, spoilers and other accessories and modifications.