Depreciation is the single most frustrating thing about owning a vehicle. We all know that cars drain our money. But nothing does in quite such a devastating way as depreciation. It’s a strange phenomenon because most of our assets increase in value over time. Think about the value of your house and even jewellery. It all goes up in price. But not our cars! They go down. And they go down fast.
Did you know that a brand new car loses 10% of its value the second it leaves the showroom? In the next twelve months, it will lose a staggering 40%. Three years down the line, and your car could be worth less than half the original value. It’s gutting, isn’t it? When it comes to selling that car, you need to squeeze every last penny out of the price. That means holding onto as much value as possible! Here’s how you do it.
Buy the right car
For many of you, I understand it might be a little late for that! But, the car you choose has an enormous impact on the depreciation rate. Holding onto value is all about looking to the future. If your vehicle is likely to retain demand in three years, it will hold value. Strangely, luxury cars and more expensive models depreciate much faster. Your best options are reliable, economical city cars with lots of demand. Some of the best performers in this category are the MINI hatchback, the Honda Jazz, and Ford Fiesta.
Accessories and extras
The optional extras and accessories you choose also have a big impact. For example, if you add a huge stereo, alloy rims, and a personal paint job, you’re going to lose a lot of value. And cut your potential buyers in half. Instead, invest in functional extras that are in demand. We’re talking about sat navs, parking sensors, and climate control. These will make sure your car holds value in the future. We recently got a simple metallic paint covering from Auto Art before selling our car. Auctioneers estimated we actually added £500 to the value as a result. The moral here is to choose your extras and accessories carefully.
Keep it well maintained
For prospective buyers, the car’s condition is right at the top of the priority list. Buyers want a reliable car in pristine condition. The better maintained you car, the higher its value. It’s that simple. So, from day one, make sure you’re checking the fluids and keeping the tyres in check. Replace the oil regularly, and take care of minor repairs as soon as they appear. A poorly maintained car will drain value quickly.
Lastly, buyers are always looking for low mileage. The average annual mileage is 8,000. If you can keep your vehicle below that magic number, you’ll retain a much higher value. Low mileage suggests a better maintained car overall.
That’s all there is to it, readers. Unfortunately, we’re all fighting a losing battle here! But, the best you can do is to hold onto that value.
Shouts out to Sam Gatt for contributing this great article. Sam is a big petrol head and loves everything about cars!