How to Avoid and Reduce Car Depreciation
Buying a new car is truly a thrill. It’s one of the most exciting things you can do in life. There’s nothing quite like the feeling of driving your brand new car off the lot, complete with that fresh car smell, with nothing on the clock. Your new pride and joy will bring you heaps of satisfaction through the years. But some people are faced with a shock when they come to sell and buy again – their car has depreciated far beyond what they thought it would. While all new cars depreciate as soon as they’re driven off the lot, there are a few things you can do to reduce this. Let’s check it out in more detail.
Regular Maintenance and Servicing
When it comes time to sell, savvy buyers will either commission a mechanical inspection or inspect the vehicle themselves. A regular car service will keep your ride in excellent working order and can prevent major mechanical issues that could cost a stack of money and reduce the resale value of your car. As well as being a great way to minimize depreciation, it’s also the wise thing to do. You should take your vehicle in for a minor service every six months.
Watch Your Mileage
Cars with more kilometres on the clock sell for less – this is a basic fact. If you’re doing a lot of driving every day, then your car will depreciate quicker. So try to drive less if you want your vehicle to retain value. If you have to drive a lot for work, try to negotiate a company car, or an allowance in lieu – to offset the loss of value in your personal vehicle. Or if you’re savvy and can afford it, trade-in your car every few years. This will keep the mileage down and the resale value high, and you always get to drive the latest and greatest.
Be Selective in Your Choice of Brand
Some cars hold their resale value better than others. And, some brands are more notorious for significant defects and recalls. For example, a Subaru is a more reliable brand compared to Holden and will retain a more substantial percentage of its resale value, even with higher mileage and for older models. As a rule of thumb, most major Japanese brands and some South Korean brands have a solid reputation and extended warranties resulting in less depreciation.
Avoid Loud Colours
This may seem an odd tip, but popular colours help to sell a used car. Avoid bright yellows, greens, pinks and purples and instead opt for more typical colours like white, grey, black or silver.
Another tip is to avoid significant modifications, especially ones that scream “race car!”. If your car has any of these mods, buyers are going to assume that the car has been thrashed to an inch of its limits and they will look elsewhere for their second-hand purchase.
Fix Any Dents and Scrapes
Any dents, scrapes, chips or other cosmetic damage will reduce your car’s resale value. It’s essential to get these repaired as soon as they occur. Your insurance should cover most repairs, especially if you have the details of the responsible party. If you’re at fault, you’ll just need to pay your excess.
A Valuable Summary
It is possible to reduce your car’s depreciation rate. First, ensure that you bring it into a reliable mechanic for regular maintenance and servicing. Try to limit the amount of driving that you do and be choosy when picking your brand. Stick with fashionable colours and avoid significant modifications. Finally, ensure that you repair any dents or damage.