For most of us in life, our car is one of the most significant cash expenditures we will ever undertake. The average American spends $38,960 on a new car, making it the most expensive thing most of us buy after a house. What’s more, car values and prices are rising at a faster rate than ever before.
That’s why it is important to look at your car as an investment. No matter what kind of car you buy, you want to be able to sell it for a decent amount, at least so that you can finance your next car purchase. This is where the question of car depreciation comes in. Read on to find out everything you need to know about depreciation and your car value.
1. What is Car Depreciation?
First of all, let’s break down exactly what is meant by car depreciation. Put simply, it describes the process in which your car loses value over time. This is unavoidable for the vast majority of cars. It is well known that a vehicle loses its value the second it leaves the lot. With every additional mile on the clock, your car is worth less than you paid. This is car depreciation in action.
2. Can I Limit Depreciation?
While car depreciation is completely unavoidable in 99.9% of cases, it can be limited to an extent. The most impactful thing you can do to reduce the amount of depreciation you are stuck with is buying a used car. This is because depreciation has mostly been factored into a used car when you buy it.
You will pay less for the car, meaning that the remaining depreciation you must absorb will be comparatively low. In addition, regular maintenance and less car gas mileage will also stave off depreciation. Safer driving habits also help.
3. Which Vehicles Depreciate the Most?
Of course, whether you are choosing new cars vs used cars, the type of vehicle you buy will impact the level of depreciation you deal with over time. Luxury cars depreciate the most by far, as buyers tend to opt for newer vehicles in this premium market.
Also, much of the value of high-end cars is grossly inflated and erodes very quickly. In addition, cars with expensive parts of repairs such as BMWs will also depreciate much faster than vehicles that are cheaper to repair.
4. How to Keep Your Value Up
If you want to stave off depreciation and retain the value of your car, there are a few easy things you can do. For one, make sure to submit to regular preventative maintenance.
If you always keep your car in good working order, you will be able to sell it for much more than if you let wear and tear set in. In addition, a lot of miles will destroy your car’s value, so limit your driving to necessary journeys if you care about resale value.
Fix Up Your Car and Sell It Today
If you want to reverse car depreciation in your vehicle, you need to fix her up. For this, we have got you covered. Check out our Auto Repair guides to find out how to get your car as good as new.