Car depreciation refers to the rate at which a car loses value over time. According to the AA, the average new car will lose an average of 20 per cent of its new price per year. For example, if you bought a brand new vehicle from your local garage for $70,000, within 12 months the value of your car would have depreciated by $14,000.
With that being said, car depreciation is also dependent on how you manage your driving habits, how you treat your vehicle and whether or not you regularly take your car to be serviced. With a significant portion of drivers’ incomes often going on paying for and running their vehicles, it’s in their best interest to keep their motors in tiptop condition.
Keep reading to find out four easy ways to minimize car depreciation.
Too many miles
Although you may be looking forward to life on the road in your new car, when it comes to mileage, it’s best to keep yours low. As a general rule, the more miles you clock on the odometer, the more your car will lose in value. Perhaps it is time to consider alternative methods of transportation on the days you don’t have to use your car? Maybe a brisk walk to your local shops and back, although a minor step in the grand scheme of things, could save on both fuel expenses and those digits on your car’s final selling price.
Another way to slash your mounting mileage is by using a ‘park and ride’ scheme. Lots of towns and cities run these incentive parking initiatives. Once you’re parked your car, you simply switch to a public transport service, which then takes you into the town or city center. Not only does this keep fuel money in your back pocket, it also helps to reduce your carbon footprint.
Skipping car maintenance services
Very few of us look forward to our biannual trips to the dentist, but we know it’s necessary in order to keep our pearly whites healthy. Well, the same goes for our motors. MOTs are a legal requirement and are important to carry out to ensure your vehicle remains roadworthy, but a regular trip to get your vehicle serviced can help ensure your car carries on running smoothly and efficiently.
Car breakdowns are every driver’s worst nightmare. Not only could they be a hazardous ordeal in which you run the risk of causing an accident and hurting yourself and other drivers, it is often expensive to fix the damage that your car has sustained. Furthermore, if you were to break down and your car was in need of repair, the value of your vehicle could immediately diminish. This is because in some cases, you may not have your car fixed by the vehicle manufacturer or using the manufacturer’s parts. This can invalidate the manufacturer’s warranty and it may make potential buyers less confident that repairs have been carried out properly.
Your motor’s history is recorded in something known as a ‘vehicle history report’. Here potential buyers can see every accident, breakdown, and repair that your car has endured and this might influence their decision.
So, to save on those pennies in the long term and to ensure your car continues to run smoothly, don’t skip those trips to your nearest vehicle servicing center.
Bad habits
According to a study conducted by the Association of Accounting Technicians, the average American worker spends 13,356 hours en route to and from work per year. During these thousands of hours commuting, it is easy to pick up some car-damaging habits. From running your fuel tank down too low, to resting your foot on the clutch pedal, there are lots of little things you might be doing that are harming your car.
It’s easy to leave filling your car up to the very last minute, but running your vehicle low on fuel can risk clogging up your fuel pump and filters, which can result in rather costly repairs and ultimately reduce your car’s selling price. Similarly, by resting your foot on the clutch, you are actively engaging the clutch disc. In doing so, you’re causing the clutch to heat and consequently wear down much quicker than if you were to only use the clutch when needed. By refraining from doing this, you not only save yourself the setback of buying and fitting a new clutch, but you also protect your car’s resale price.
Another very easy way to reduce your vehicle’s value depreciation is by not smoking in it. When you smoke in a confined space such as a car, the tiny particles that cigarettes create will stick to the interior. Consumer director for vehicle data and valuation specialist HPI Fernando Garcia states that smoking in your car can reduce its resale value by $2,000.
Choosing the wrong car
Choosing the wrong car for your lifestyle is a definite way to increase your potential losses in the future. Brand new cars are notorious for losing their value the second you drive them home from the car dealers. Therefore, it can make economic sense to opt for a used or nearly-new vehicle as depreciation slows as a car gets older.
Also, choosing the wrong color will most definitely influence future buyers’ decisions. Even if your favorite color is bright pink, this tone may not look as attractive to potential buyers and could have a very negative impact when trying to sell your vehicle in the future. Similarly, refrain from ‘boy racer’ modifications, such as spoilers or audio system adjustments. These will often present the buyer with a negative stereotype that will not bode well when it comes to selling your vehicle.
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