Depreciation is the most consequential but least considered a phenomenon that affects the price of a car. This factor is not as obvious as the price of gasoline, servicing, or insurance premium, but the consequence is mammoth. The worth of a new vehicle falls at a startling rate, depending on the model and manufacturer. Depreciation can be referred to as the difference between buying and selling price of a car. The rate may vary on market conditions and models, but the thumb rule is 15 to 35% in the first year, and 50% or more over the spread of the subsequent three years. It is sensible to choose a car model which fetches a comparatively better resale value, than merely focusing on fuel efficiency, while purchasing a car.
Factors that affect the rate of depreciation
Once you drive out from the showroom, the meter of deprecation starts clocking. In the very first year, a significant proportion of its value gets degraded, which be around 17%. The rate of deprecation is maximum in the first five years, and then it continues at a slower rate. After five years, almost 70% of the worth of care is eroded. The average mileage of a car is around 10,000 Km per year; the more you drive, the less is the resale value. Car depreciation services provide calculators to find the current value of your car.
But the rate of depreciation varies on the models, manufacturers of the car. Premium cars depreciate at a faster rate than mid-segment cars. Some cars are considered more reliable and have a good brand value, holding their worth for a longer time. Rare performance cars, limited edition models, can appreciate over time, but most cars lose their worth over time. Nissan –infinite q50, Ford –Ka, Seat –Mii, are some of the trusted brands which retain around 35 to 36% of their worth during resale.
A number of owners also affect the rate of depreciation; less owner means more resale value. The general condition of the car damage bodywork, inferior interior, and not properly tuned engine will reduce the car’s price. Proper servicing regularly keeps the car well-tuned. Better the fuel efficiency, the higher is the price. Car depreciation services will help you evaluate how much your car will be worth after a certain number of years. They have calculators on the websites where you need to furnish the car’s purchasing price and the number of years you used it.
Steps to combat car depreciation
Service your car regularly following the manufactures guide book. Regular servicing keeps the mechanical operation optimal for an extended period. FSH (Full Service History) documents all your servicing history, and buyers may want to look for it. Give your car a regular wash, so that the dirt, grime, and grease do not corrode the bodywork and other components. Maintaining correct tire pressure is an integral part of proper car care. Drive only it is essential; this will keep the mileage down. Cars with more than 12,000 miles, tend to lose their value more quickly. Lower mileage fetches a higher resale value.