7 Ways To Avoid Car Depreciation
Car depreciation is almost always part of car ownership. As soon as you leave the dealership, your car's value drops. But, keeping your car in good nick can help slow depreciation and get you the best offer when it's time to sell. Whether you're on the market for a car or looking to boost your car's resale value, these seven tips to help minimise depreciation might come in handy.
Buy an 'almost-new' second-hand car
Up to 58 percent of a typical car's depreciation happens in its first three years1. So instead of buying brand new, consider going with a car that's 1-2 years old with good mileage — that is, 'almost new'. This way, you could potentially avoid the biggest chunk of value loss and save cash on a near-new model
Buy a popular brand
The more in-demand a brand or model is on the market, the less likely it is to depreciate. Big brand car makers, like Toyota, Mazda and Honda, are known for being more reliable and can be less expensive to service. The reliability factor makes these brands more desirable to buyers, and adds to their resale value.
Know the right time to buy and sell
When to buy
The time of year you buy can impact on how quickly your car depreciates. For new cars, buying at the start of the year is often best. Even though a car manufactured in December may be the same as one leaving the factory in January, the one bought in January may depreciate less after the same period of time. This is because the newer plate will hold more value. Buying at the end of the year could cost you a whole year of depreciation in just a few months.
When to sell
A new car will depreciate the most within its first three years of ownership1, and after 10 years it may not have much value anymore. For many cars, that resale sweet spot is between 6-7 years.
Be smart with your features and modifications
Look for modifications and upgrades that will increase the value of your car thanks to their convenience, like a GPS system, sunroof and leather seats. Mods like big wheels, expensive sound systems and custom interiors can decrease your car's value as they're harder to replace, and the look can be less desirable for prospective buyers.
Go with a standard colour
Colour can be a personal choice, but factory colours like white, silver, black and red might save you thousands when it comes to reselling. Custom trims like matte and racing stripes? Not so much. So if you're thinking about going matte hot pink for your next car, maybe swap it out for factory white — your future self will thank you when it's time to resell.
Hold on to your service records and user manual
Knowing a car's ownership history and how well its been looked after can make or break a person's decision to buy. Otherwise, this could raise the eyebrows of suspicious buyers. That's why keeping service records and your user manual handy can be hugely beneficial.
Keep your car in good nick
A car that's well looked after will generally fare better than a neglected one. Make a habit of cleaning the inside and avoid things like smoking that can leave a permanent smell. If you have pets, invest in seat covers you can easily wash to remove pet hair.
Even a tiny dent or scratch can bring down the value of your car, so be cautious on the road and proactive with getting things fixed. While not all prangs are avoidable, having a Comprehensive Car Insurance policy can help give peace of mind that if something happened, you can get your car up to scratch again.
1Car Depreciation Explained, carchase.com.au
