How To Reduce Depreciation And Improving Your Car Value Estimates
If you plan to sell your car sometime in the future, then you should take steps now to ensure you get good money for it when that time comes. You should learn about depreciation and how to reduce it because it is the one definite factor that determines your car value estimates.
What Is Car Depreciation?
Basically, car depreciation is the difference between the money you spent on purchasing a car and the amount you expect to sell it for.
How Is It Calculated?
While the rate of depreciation can vary between brands and models, there is a consensus that a car can depreciate with up to 50% in value after three years of purchase. For a year, the depreciation rate ranges from 15%-30%.
Now that you understand what depreciation is and how it works, here are other factors that could affect your car value estimates:
- the mileage
- Its present condition
- Its service history
- Warranty (if there’s any remaining)
- The desirability of the car’s brand, make, and model. Etc.
How to Reduce Car Depreciation?
Having identified depreciation as a key component in determining your car value estimates, here are some steps you can take to reduce its toll on your vehicle.
Keeping to a regular maintenance schedule does not only keep you from disappointment as you use the car but also increases the car value when the time comes to sell. Prospective car buyers who are presented with a full-service history are more inclined to buy their choice cars at higher prices.
Drive Only If You Must
If you really do plan to sell your car later on, then you might want to reduce the mileage on it as much as you can. This doesn’t mean that you should leave it undriven for very long periods of time though as that could give rise to other problems like brittle tubes and dead batteries.
Pay Close Attention
Some car owners tend to overlook small scratches and stains. These could reduce car value estimates and should be taken care of as soon as can be.
Try Not to Customize
Although there are hardly better ways to call the car yours than adding a few features and designs yourself, it is best to steer clear of such if you plan to sell in the future. Adding signatory designs or custom features to your car greatly reduces the number of people it appeals to, and thus its value.
An extra tip on avoiding depreciation is to research a car before you buy it. During your research, pay attention to how your choice of car fares on the used car market and what the generally accepted depreciation rates are.
Ultimately, to avoid huge car depreciation, it would be wise to sell it before a newer model gets to market. People looking for used cars who also like to stay trendy are more likely to buy the latest model for a brand rather than later ones.