How to reduce car depreciation
In the first three years of ownership, most vehicles lose between 50% and 60% of their value. The rate of depreciation is influenced by a number of factors such as running costs and the quality of the car.
What is car depreciation?
Depreciation is the gap between the price you paid for your vehicle and the price you receive when you sell or trade it in.
The first year of ownership is when most vehicles suffer the largest hit in terms of depreciation, and it progressively slows down after that. When you’re in your eighth year of ownership, depreciation usually comes to a halt. In the long run, selecting a car that depreciates slowly will save you more money.
Running costs affect depreciation
The fuel economy has a significant impact on depreciation, particularly since that petrol and diesel engines are becoming more costly year on year. Large vehicles, predictably, take the worst of the damage.
On the used market, big petrol-engined saloons might appear to be a great value, but only if you can pay the running costs. Smaller automobiles, such as tiny cars and city cars, are quite popular in the UK since their running expenses are significantly lower.
Car quality affects depreciation
It’s simple to find out how many warranty claims or recalls a vehicle has prompted, as well as what owners have said about dealers’ ability to resolve issues. All of this information, both positive and bad, will have an impact on the depreciation of a car model.
Reducing car depreciation
Once you understand the causes of car depreciation, you can begin to find ways to reduce the effects of car depreciation when you buy a car.
One way is to pick a popular car with minimal operating expenses, such as a city car or a supermini. They won’t suit everyone, so purchasers should consider other options to avoid falling residual values.
Keeping a detailed record of service and MOT certifications, maintaining a low mileage and keeping the vehicle in excellent condition will help prevent depreciation.
Buy your car for less to reduce depreciation
To avoid rapid depreciation, you can replace your car with one of our used cars at auction. It’s easy to sign up, and bidding can all be done online. You’ll have to pick up the car in person though!