What affects a vehicle’s depreciation?
There are a lot of great things about owning a car, truck, SUV, or any vehicle. However, one thing that affects almost anything with an engine and wheels is depreciation and it’s almost completely unavoidable. So, what affects a vehicle’s depreciation? While all vehicles lose value over time, some makes and models will lose value faster than others. It may or may not surprise you that there is quite a bit of confusion and myths surrounding the depreciation of an automobile and the finance team at Carizma Motors thought it would be helpful to share a bit of their knowledge on the subject. Let’s see what they put together.
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When does a vehicle lose the most value?
According to industry experts, a newly purchased and titled vehicle will lose approximately 20 percent of its value in the first year. The next four years will bring an average of 15 percent more depreciations. Finally, at the end of a five-year term, a new vehicle – on average – will be worth around 40 percent of the original purchase price.
Depreciation is an unfortunate reality in the world of buying and selling automobiles. The good news for vehicle owners is that depreciation will largely level out after this amount of time, however, there are still a few factors that can hurt a vehicle’s resale or trade-in value.
Do some vehicles depreciate slower than others?
While depreciation is going to happen to every vehicle, it won’t affect every vehicle the same way. Some platforms can actually hold their value longer than others. In today’s automotive marketplace pickup trucks and SUVs are the most popular vehicles, which means they will be very popular when it comes to reselling them through a private sale or trading them into a dealership. By and large, luxury vehicles notoriously depreciate faster than mass-market nameplates.
Can I slow depreciation at all?
The best way to slow depreciation down is to properly maintain your vehicle. Even if you have been lax about getting your oil changed on time or your vehicle has picked up a few dents, it’s never too late to get on the ball. In addition to doing everything you can to properly maintain the vehicle, saving the records will establish a paper trail that will be very helpful during the resale process.
If it’s time for you to replace the car, truck or SUV in your garage, make an appointment with a Carizma Motors product expert today.