Car depreciation simply means the difference in price from when you first bought the car versus its value at the time you decide to sell it.
Car depreciation is a term that’s commonly thrown around in car-related conversations, and it’s something that impacts all vehicle owners. But what does it actually mean? Car depreciation simply means the difference in price from when you first bought the car versus its value at the time you decide to sell it.
It can be a large source of stress for car owners, but that needn’t be the case! Understanding the factors as to why a car depreciates in value over time will keep you well informed and give you a better idea as to when the best time to sell your vehicle would be. Read on to find out more!
We want to dispel the myth that the minute you drive away in your new car it loses a large amount of its sale value. In fact, in the last few years, because of car shortages, used cars are holding their value much better.
Many factors determine the value of your car over time, and some cars depreciate quicker than others. So it’s not possible to determine an exact percentage of your car’s depreciation value year by year, as this too varies.
The following is an estimation range of car depreciation percentages:
· Year 1: 15–35% depreciation (65–85% of the original value)
· Year 3: 40–60% depreciation (65–85% of the original value)
· Year 5: 60–70% depreciation (30–40% of the original value)
· Years 8–10: 80% depreciation (20% of the original value)
1. Mileage
The more miles you clock up, the less your car is worth as it’s more prone to wear and tear issues. This makes it less desirable to potential buyers as they won’t want to incur further maintenance costs.
2. Previous owners
If your car has changed hands multiple times, then levels of trust that the car has been well-maintained decrease. As a result, the car will be less desirable, which will drive its sale price down.
3. Car maintenance and documentation
Keeping a good record of your car’s warranty, services and maintenance history is a great way to ensure that your car retains a higher percentage of its value because it assures prospective buyers that the car is less likely to need any costly major maintenance.
4. Brand and model
Brands that are notorious for breaking down will have a limited number of buyers in the future, therefore potentially causing an entire car range to depreciate much quicker than more reputable brands. Some brands release new versions within their range every few years, and a more recent model will hold its value for longer.
5. Fuel economy
Overall, smaller, more fuel-efficient cars retain their value much better as they are more suited to eco-conscious guidelines. They are therefore kept in high demand and fetch a much better sales price. Larger cars are generally more expensive to buy brand new, which also means that their fall in value is much more dramatic; this is due to the higher running and maintenance costs.
But as older petrol and diesel cars are being phased out in preparation for the 2035 electric vehicle deadline, more cars are being produced to comply with the new regulations, meaning that once again both demand and sales price will remain high. Additionally, because they’re less pollutive, they cost less to tax each year, giving them another very appealing USP.
It’s possible to slow down a car’s rate of depreciation to give you a better chance of a good resale value when the time comes to sell your vehicle. Here are a few ways in which to do this:
· Keep your mileage as low as possible
· Keep your car clean – don’t smoke inside and try to keep pets out
· Use manufacturer-recommended parts to repair any damages
The best way to track a car’s worth over time is by using a car valuation tool. This will show you the market value of your car’s make, mileage, engine type and fuel economy, plus other factors, to give you an idea of how much they’re selling for and therefore how much your car’s sale price has depreciated.
If you’re looking for a reliable valuation tool to assist you in your research, Hendy Buy Any Car can help with our own quick and easy valuation tool here
Here at Hendy Buy Any Car, we want our customers to be reliably informed of all factors that can impact the sale of their car. We provide expert advice about the car market and help you sell your car for the best price.
As a long-standing, family-run dealer group with numerous sites across the South Coast, we emphasise the importance of offering a transparent and hassle-free service. At Hendy, we understand the diligent preparation that you have to undertake to get your car in the best shape for sale, and we’re committed to helping you get there!
Ready to get started? Contact us today!