Did you know that a new car loses between 15 – 35% of its value in the first year of ownership and up to 50% in the first 3 years? This is known as depreciation and is the rate by which the value of your car decreases over time. Generally speaking, bigger and more luxurious cars that are expensive to run will often have the highest rate of depreciation.
So now that you know about depreciation let’s look at some of the ways it affects the value of your car and what you can do to keep your car’s value as high as possible.
Mileage
The higher the mileage the less your car will be worth. With the national average around 10,000 miles per annum any increase in this and you can expect the value of your car to decrease at a higher rate. If you can, try to keep your mileage down, especially in the first 3 – 5 years of ownership.
Previous owners
Generally speaking, the more previous owners your car has the lower the overall value. Obviously this is only really a factor for newer cars as old cars you would expect them to have several owners over a longer period.
Service history
One of the best ways to protect your car’s value is by having it regularly maintained and serviced in line with the manufacturers guidelines. This will help buyers to see that the car has been looked after and help keep the price as high as possible.
Warranty
Most cars have a 3 year warranty as standard but there are some manufacturers that offer 5 and 7 year warranties. Having a good period of time left on your warranty will help increase the value of your car.
Modifications
You may think modifying your car will help to add value but the reality is that most people will think that the car has been abused and so the value will take a hit. Big wheels, tinted windows and large spoilers are unlikely to appeal to the majority of buyers and cause your car’s value to plummet.
Sell at right time
There is a good time and a bad time to sell your car. Convertibles and sports cars tend to go up in value in the spring and summer months when they are more desirable and the same goes for 4×4’s which see their prices increase in the winter months. Also if the manufacturer is about to launch a new model then expect the older value to drop in value as it gets replaced.