Typically, new cars start to depreciate the moment you drive off the dealer’s lot. It is estimated that a car could drop 11% of its value when you take it off the lot and up to 30% in the first year of purchase. This makes depreciation an unavoidable part of owning a car.
Some cars hold their value well while others lose it quicker. In fact, it’s not uncommon for some cars to depreciate nearly 60% in their first three years. The make, model, version, and year of production are some of the factors that dictate the broad price range. Of course, there are many more dynamics that come into play when determining how much a car sells.
Discover six factors that reduce your car’s value and what you can to slow down the rate of depreciation.
Condition of your car
The most obvious factor that determines your car’s value is its current condition. Does it need extensive repairs in its exterior, interior, or the engine? Any major damage will significantly reduce the value of the car.
If you are not sure how much your car can cost at its current state, consider seeking professional car valuation services. They will assess the impact of various car problems on the final sale price. Some of the common issues they look at are visible scratches, engine health, condition of the car seats and other interior components, and headlights.
How many miles you’ve clocked up is one of the biggest factors that affect a car’s value. The average mileage should be between 12,000 to 15000 miles annually. Anything above that is considered high and will significantly lower the overall value. If you’re serious about maintaining your car’s value, consider setting daily, weekly and monthly mileage limits.
Changing your body style will have an impact on the car’s value. Most people will prefer to buy a car as it came from the factory, so it’s important to think hard before making any modifications. Believe it or not, modifications as minor as adding a more expensive stereo could end up reducing your car’s value.
But as with anything else, some aftermarket changes could in fact increase the value, particularly if this is something other car owners for your specific model do. For example, adding a high-quality muffler to a Subaru Forester will likely make the car more attractive to a buyer interested in power and enhanced appearance. Leather seats and security features could also be a big plus as they give a car that premium feel and improve the overall driving experience.
Some modifications also come with insurance complications, which might put off potential buyers further. For example, some providers will be hesitant to insure a car with aftermarket spacers or shocks, thereby reducing its appeal to some buyers.
Certain car models in high demand will more likely sell at higher prices, but this depends on the market at the time of sale. Generally, some of the market factors that come into play are how desirable a car is, whether a new model has been released on the same category, how strong the economy is at the time of sale, and much more.
Having a car full-service history can significantly increase your car’s value because it’s proof that you looked after the vehicle and took regular servicing as recommended. It is best practice to keep the receipts from these services to ensure you’re getting the best possible price for your wheels.
Believe it or not, your car color could affect its value. Just because you like tangerine or other bright colors on a spray job doesn’t mean buyers will like it. There are basic colors that are more likely to sell for more money, including black, white, grey, and silver.
In contrast, flashy colors like maroon, gold, green, purple, and other bright shades tend to struggle in the secondary market. Well, there’s no thumb rule on which colors will put off buyers as some colors for one model can be popular for another. Often, a respray might prompt the owner to accept a lower resale offer from a would-be buyer.
Slow down your car’s depreciation rate!
Understanding what affects your car’s value is key in avoiding common pitfalls where most car owners lose money when selling their car. In a nutshell, follow the manufacturer’s service guidelines, keep your mileage low, go easy on aftermarket modifications, and consistently keep your maintenance records.
Want more tips or still have unresolved questions on how to ensure your car sells at a good price? Check out this comprehensive guide on tips for increasing the resale value. Besides, feel free to contact us here at Motors on Wheel and we’ll be happy to help.
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