Car Depreciation: Tips For Protecting Your Investment
When you decide to purchase a car, depreciation is an inevitable fate. Car depreciation is the decrease in a car’s value over time due to a number of factors. Although it’s a natural process, some cars depreciate faster than others, like if it’s been damaged from an accident. At Crossroads Automotive Group, we’ve put together a guide on how to avoid car depreciation for when you decide to purchase a Ford, Nissan, Chrysler, Dodge, Jeep, Ram, or INFINITI model from any of our stores throughout North Carolina and Virginia. Understanding how car depreciation works can help you when you’re purchasing or selling a car. Get in touch with our dealers today!
Factors Affecting Car Depreciation
When looking into how to avoid car depreciation, you first need to know some facts about it. On average, new cars depreciate by around 20% after the first year, with factors like make, model, condition, mileage, and desirability influencing this rate. Putting more miles on your car contributes to faster depreciation due to increased wear and tear, while well-maintained cars with low mileage tend to retain their value better. Used vehicles after 100,000 miles depreciate slower because the idea is that a vehicle that’s 10 years old and reached that mileage is often more well maintained than a vehicle that’s five years old at 50,000 miles. So if used cars have a slower depreciation as time goes by, and new cars quickly lose their value in the beginning, how do you avoid car depreciation? To slow it down, practices such as regular cleaning, avoiding modifications, and safe driving habits can be beneficial. While these factors allow you to slow car depreciation, cars that are in high demand generally depreciate even more slowly than those that are less popular. No matter your feelings towards the car, market forces dictate the value of your ride.
Calculating Car Depreciation
An online car depreciation calculator can help you estimate the depreciation of a car over a certain period of time. It takes into account the car’s make, model, year, condition, current price, mileage, and how long you intend to own it. Note that the results aren’t fully conclusive on how to avoid car depreciation, as they are only rough estimates that are based on current trends regarding the vehicle of your choice. We also recommend contacting the experts across our various stores within Crossroads Automotive Group for an accurate estimate.
Buying a Car with Low Depreciation
Buying a used car can be a cost-effective option in how to avoid car depreciation. A two-year-old vehicle may cost significantly less than a new one due to the used car depreciation rate after the first year. New cars with slower depreciation, such as a Ford Explorer or an INFINITI QX60, can also help you save money in the long run, as they hold their value better than new cars with high depreciation rates, typically the less popular or reliable models.
Minimizing Depreciation Strategies
Although your vehicle will decrease in value over time, what can you do to avoid car depreciation? Here are some tips to help you mitigate new and used car depreciation.
Maintenance: Preserve your car’s value with regular maintenance and little to no customization. By adhering to a consistent maintenance schedule, you can significantly extend your vehicle’s lifespan and optimize its performance. This proactive approach not only helps prevent costly breakdowns but also enhances the overall driving experience. Moreover, a well-maintained car with a documented history and little to no customizations is more attractive to potential buyers, thereby boosting its resale value.
Driving Habits: Since cars rapidly lose their value due to depreciation, especially brand-new cars, it’s best to employ safe and responsible driving habits. Aggressive driving accelerates wear and tear on the vehicle’s components, leading to faster depreciation. In contrast, gentle driving, such as maintaining steady speeds and avoiding abrupt maneuvers, minimizes stress on the car’s engine, transmission, and brakes. These practices can also reduce the likelihood of accidents, another major factor in depreciation. Additionally, exposing your vehicle to extreme weather conditions, like intense heat or freezing cold, can accelerate aging and damage sensitive components.
Exterior/Interior Upkeep: More tips on how to avoid car depreciation is by taking simple steps to preserve your vehicle’s appearance. This includes using a car cover to shield it from the elements and regularly washing and waxing its surface. Vacuuming the inside and wiping down high-touch surfaces also preserves a cleaner feel. Additionally, using a sunshade to protect the interior from harmful UV rays can help maintain its condition. A well-maintained car not only looks better but also feels better to drive.
Maintaining Your Car’s Resale Value
Depreciation on a new car is much faster than on a used vehicle because once it drives away from the dealership, it immediately loses the “brand-new” factor and is already considered a used vehicle. This is because a buyer is not usually going to want to pay a near-original MSRP price for a used vehicle, even with minimal miles. It also raises concerns as to why the vehicle was brought back in a short amount of time. Planning for long-term car ownership can assist you with how to avoid car depreciation. By selecting a vehicle you intend to keep for an extended period, you can maximize its resale value by properly taking care of it. But if it’s a vehicle in high demand, like the Ford F-150, the resale value will work in your favor, no matter its condition.
Another method on how to avoid car depreciation is by selling your car privately. By opting for a private sale instead of a trade-in, you can often secure a higher selling price. Online marketplaces provide a convenient platform to reach a wider audience of potential buyers, increasing your chances of finding a buyer who values your vehicle. By taking the time to list your car accurately, negotiate effectively, and handle the paperwork yourself, you can maximize your return and minimize the impact of depreciation.
Drive With Confidence
Now that you’re equipped with more understanding on how to avoid car depreciation, you’re ready to select the ride that’s perfect for you. Visit any of our stores within Crossroads Automotive Group to get started today!
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