The falling value of a vehicle over time has been described by the term ‘depreciation’. Generally, it means that the older a car gets, the less is going to be its resale value. However, every vehicle goes through depreciation, but new cars depreciate faster as compared to old ones. There are several factors that affect the depreciation of a vehicle, especially if it is a new one. A new car starts depreciating right after hitting the road for the first time, however, depreciation rate can be slowed down. Once the initial maximum depreciation is passed, car owners can reduce car depreciation through frequent maintenance and keeping it in best condition.

On the other hand, some motorists drive their vehicles in an aggressive manner and those vehicles can depreciate faster. Therefore, car owners need to have some relevant information about car depreciation and how it can affect its resale value. In addition, those who frequently upgrade their vehicles should also have a clear understanding of how depreciation can be reduced and sell their old cars at the best price.

Let’s discuss all about car depreciation and how reducing it can affect the resale value of a vehicle when selling it.

Car Depreciation Factor

The car depreciation factor plays a huge role in determining the value of any vehicle as it is the difference between a car’s value when first purchased and its resale value at the time of selling. A vehicle starts losing its value as soon as it is driven out of the showroom. For instance, if a person purchases a brand-new vehicle and after a few years of use it picks up scratches and marks then it will naturally decrease its value. In addition, lack of maintenance and aggressive driving can further devalue a vehicle.

Therefore, motorists should understand that generally a vehicle undergoes maximum depreciation in the initial five years of its purchase. However, the car depreciation rate can be reduced by keeping the vehicle in best condition through regular service and maintenance. In addition to this, there are several other factors that can help car owners in reducing car depreciation.

Also read: Why is Car Evaluation Important to Sell a Used Car at a Fair Price?

Vehicles that Depreciate the Quickest

There are some vehicles that can depreciate faster than others such as brand-new cars as compared to used cars. Therefore, not all types of cars depreciate at the same rate, but some can depreciate much quicker than the others. Some of these vehicle’s type includes cars with low demand and brand-new ones.

In general, it is expected that new vehicles can retain value for a long time, but it is wrong. Brand-new cars have a high mark-up that is added onto their wholesale value. It means that as soon as a vehicle hits the road for the first time, it starts depreciating at a higher rate than an old or used vehicle.

On the other hand, vehicles with low demand can also depreciate at an increased rate. Any vehicle in the car market that has a high demand is more likely to hold its resale value such as the SUVs, hatchbacks and sedans. Motorists should know that purchasing a car with a low demand can depreciate faster and less likely to hold its value.

Also read: What is the Right Time to Sell a Used Car to Get the Best Price?

Cars With Slow Depreciation Rate

There are some types of vehicles that can depreciate at a slower rate such as used cars, fuel-efficient and affordable cars. Motorists should know that used vehicle do not depreciate at the same rate as new cars. The price of a brand new car drops by 20% when it hits the road for the first time and it consistently depreciates in the initial few years. However, a used vehicle does not have the same depreciation rate as a new one as it has already passed through the initial phase of car depreciation. In addition to this, fuel-efficient cars are cost-effective commuting option, which is why they tend to hold their value for a longer time. Similarly, affordable vehicle segment is also quite popular among the motorists, and they also have a slow depreciation rate in the car market.

Also read: Know the Risks Involved when Selling a Used Car Privately

Keeping the Depreciation Rate Low

When a vehicle covers some kilometers and starts ageing then it is likely to have some depreciation. However, car owners can keep the depreciation rate low by following some useful guidelines given below;

  • Avoid Accidents: the value of a vehicle can be affected by accident damage, whether its minor or major one. Motorists should, therefore, drive carefully to reduce depreciation.
  • Regular Car Service and Maintenance: it is ideal for car owners to regularly service their vehicles and maintain them in best conditions. A used car with full-service history has an increased value than a car with no service evidence.
  • Keep the Car Mileage Low: motorists always prefer to purchase used cars that have fewer miles on its mileage. Car owners can keep the value of their car high by avoiding unnecessary driving and keeping the car mileage low.
  • Keep the Car in Best Condition: potential car buyers are often attracted to a used car that is kept clean and in best condition. A car in good condition shows that it is looked after and mechanically fit too.
  • Avoid Unnecessary Car Modifications: car owners should know that some modifications can reduce the value of a car and often make buyers assume that it is driven hard too. Therefore, it is best to keep your vehicle in standard place to retain the best value for it.

In the End!

Motorists can avoid the depreciation of a vehicle by purchasing vehicles with a higher resale value such as sedan, hatchbacks and SUVs. Additionally, used cars have a low depreciation rate and their depreciation can be further slowed down with regular maintenance. In this way, car owners do not have to face a massive decline in the resale price of their vehicle when they decide to sell it. In addition, car buyers can conveniently upgrade to a new vehicle by selling their vehicle on a reliable and authentic car buying platform that offers a hassle-free approach to used car sellers.

Planning to sell your old car then BuyMyLuxuryCar.com can be the right place to sell your used car. Get a free valuation of your car for sale to know the best price of it.