How To Avoid Car Depreciation
Added: 15 March 2017
First things first let's start with what is car depreciation? To make it simple, depreciation is the difference between the value of a car when you buy it and when you come to sell it. The first year you buy a brand new car expect a drop in value of between 15 - 35% and up to 50% or more over a three year period.
Did you know?
Fuel is likely the biggest motoring expenses after purchasing a car, but the hidden motoring expenses most people do not factor in is depreciation, deprecation will cost the average motorists three times as much as they spend at the petrol station.
Top 5 factors that affect a car's depreciation rate?
Some cars depreciate more quickly than others, here are some of the top reasons why that could be:
Reliability - Some cars are more reliable than others, cars from manufacturers with a bad reputation for reliability will depreciate more quickly than a manufacturer with a great reputation for reliable cars.
Mileage - The more miles you put on your car will play a big role in depreciation. Take this into account when setting your annual miles when purchasing a car on a PCP or lease agreement.
Number of owners - The more owners a car has will affect the depreciation, the less the better.
Service history - A car with no or partial service history will lose more than a car will all the stamps and receipts in the service book.
Desirability - The more recent the model. the better it will hold it's value. Take this into account when purchasing a brand new car, is a face lifted model due to be released shortly?
How can I minimise depreciation?
Damage - Repair any damage such as paint chips, scuffs, dents as soon as possible, don't put the repair off, get in done as soon as possible.
Mileage - Keep the mileage as low as possible, consider sharing a car to work if possible with a co-worker.
Time of year - Sell at the right time i.e 4x4 in the winter and convertibles in the summer.
Colour - Choose popular colours such as black, white and grey, try to avoid buying a silver car or a bright shade of green.
Options - Make sure when purchasing a car you have the right options fitted i.e sat nav, bluetooth and air conditioning.
Leasing - Have you thought about leasing rather than owning a car outright? If you haven't, give it some thought as you will not have to worry about the depreciation as you are handing the car back at the end of the contract whether that's 1 year or more.
Avoid depreciation with a cost effective car lease (Leasing / PCH) agreement.
Car leasing or PCH as it's commonly know is a great way to avoid the burden of deprecation. Leasing has the option at the end of the agreement to hand the car back and simply start a new agreement on a brand new car. You will not have to carefully pick the colour and options the car has as the leasing provider will have done their homework before offer a car for lease.
A car with a strong residual value (What it will be worth in the future) means that leasing is extremely attractive due to the low monthly payments and low initial deposit. In some cases you will pay less over the length of a lease agreement than you would had you purchased the car outright.
Servicing and maintenance can sometimes be included or offered for a low fee makes the cost saving even greater.
Get a brand new car through a leasing agreement at White Dove, our team of advisors can provide cost effective leasing quotes to suit every budget, whether you need a compact car, a executive car or a family car we can help.