What is car depreciation?
Have you ever wondered why a car you bought a few years ago is worth much less now? The amount a car depreciates varies depending on the make and model, but on average, it's between 15-35% in the first year and up to 50% or more over three years. So, if you bought a medium-sized family car three years ago, it could have lost over £12,500 in value by now. Experts at CAP Automotive say that choosing a car that holds its value well is more important in the long run than focusing on fuel efficiency. So, when you're considering buying a car, it's worth researching which models hold their value better over time.
What affects a car’s depreciation rate?
Here are the reasons why some cars depreciate more quickly than others.
- Mileage – the more miles, the less the car is worth.
- Reliability – cars with a reputation for unreliability tend to depreciate faster.
- Number of owners – fewer previous owners means higher value.
- General condition – damage to the bodywork, interior, and exterior reduces value.
- Service history – a complete service history enhances value.
- Length of warranty – longer warranties increase the car's value.
- Desirability – more recent or face-lifted models tend to hold their value better.
- Size – larger luxury cars tend to depreciate more than smaller cars.
- Fuel economy – better fuel efficiency increases the car's value.
- Road tax and emissions – fuel-guzzling cars that cost more to tax or don't meet emission standards may depreciate faster.
Tips for minimising depreciation
- Keep the mileage down.
- Look after your car and repair any damage as soon as possible.
- Buy a nearly-new or used car to avoid the steepest depreciation.
- Avoid unnecessary modifications such as spoilers, wide wheels and flared wheel arches.
- Sell at the right time of year – for example, convertibles in the summer and 4x4s in the winter.
- Stick to popular colours – an outrageous shade might appeal to you, but will put off many buyers when you want to sell your car.
- Consider leasing rather than owning – then there’s no worry about the car’s depreciation, which will be built into your monthly payments.
- Do your research before buying a car – see how much values have gone down on older models and similar vehicles from the same manufacturer.
- Choose the right options when you buy – for example, metallic paint and leather are best on executive cars, while built-in sat nav and air con are desirable on mainstream cars.
- Maintain your car well – a full service history gives potential buyers peace of mind. So remember to keep all your car documents including service records and receipts safe and in one place.
- Sell your car well before its replacement model arrives in the showrooms.
Sell your next car with Swansway
If you’re looking to sell your car before it depreciates too much then get a competitive quote in under 60 seconds with Swansway. With over half a century of experience, you can trust that selling your car from Swansway is simple, risk-free and competitive.