Most things in life depreciate. That is they reduce in value from the moment you purchase them until they are eventually worth nothing. You may already know that the average new car in Australia loses 45% of its value within the first three years of its life. That’s a huge hit on your finances! But it’s not just new cars that are affected. The majority of vehicles on the road will lose value and you can’t hold on until it becomes a classic to try and get your money back! Fortunately there are several steps you can take to maintain the value of your vehicle and reduce the depreciation:
The first rule of car ownership is to look after your purchase. The manufacturer will have provided a recommended service schedule; you should stick to this! It does more than reduce the risk of your vehicle breaking down. It means the car has been looked after and this will entice buyers; allowing you to charge the premium price possible.
Protect Your Paint
You should also look at using a paint protection service. This will help to prevent your paint from fading in the sun and can even reduce the likelihood of scratches. Again, this will improve the car’s appeal and allow you to get the best possible price.
You bought a car to get around so it may be difficult to limit your mileage. But to avoid the hit of depreciation you need to have a low mileage vehicle! It is important to minimize your mileage wherever possible. It doesn’t take that much to keep your annual usage below the average mileage of 10,000 – 14,000 miles per year. If you stay below this you’ll prevent the car from depreciating as quickly.
Luxury cars cost the most to buy. They also depreciate the fastest. This is partly because 45% of a one hundred thousand dollar vehicle is significantly more than 45% of a twenty thousand dollar car. But, you’ll also find luxury cars are generally not popular on the used car market; making it exceptionally difficult to avoid a large depreciation charge. In the same vein diesel cars have been more popular for years. They attract a higher premium when new but also tend to hold their value better. Consider what type of car really suits your needs before you purchase it; this is the easiest way to minimize depreciation.
Luxury cars may depreciate the fastest but, with a little research; you can locate the brands that depreciate the slowest. If one of these vehicles suits your needs and price bracket then it is a good idea to buy it! This point is often linked with the reputation of a brand. You may have no control over the reputation but you can choose the right brand.
Keep It Looking Good
Washing and waxing regularly will help to maintain the look of your car. You should also consider a full interior valet on a regular basis. The more like new your car looks the less the depreciation will affect it. If any damage does occur get it professionally repaired to maintain the value and don’t add mods. You may love them but they will increase the rate of depreciation of your vehicle. Finally, if you’re looking to sell your car then watch the market. A sports car or convertible has more appeal and is worth more at the beginning of the summer. Monitoring the market will help to ensure you avoid the bite of depreciation.