For a lot of moms out there looking to buy – be it selling to upgrade or just replacing the older car can seem daunting and stressful. We all search to save as much money as we can and look to minimize any unwanted losses of funds. A car’s value factors in multiple things to consider when working out its worth. And commonly, car depreciation is a fact of life when owning one. When buying a new car, we don’t need a calculator to work out the estimated depreciation that will set in as soon as you drive it off from purchase.
As with anything technological, things out date and gain wear and tear.
In simple terms, car depreciation is the amount of money that a car will lose (on average) over its lifetime. If you were to jot the value of a new vehicle and monitor it through the following years; plotting it on a graph. The trend that you will see will be one of a constantly reducing trend and showing a yearly reduction. What car owners want is for the line to stay as high as possible for as long as possible resulting in minimizing the amount of money we lose once we do come to sell.
There are some companies that will work out a car’s depreciation using a technique that does take a number of factors. Starting off they will usually base this around a car’s value after three years. This will sift out any initial spikes that happen from its desirability as the new car comes to market and gives a good indication of how much a car will be worth over the lifetime of an average credit term.
Another main factor that determines a car’s depreciation rate is the demand for said vehicle.
If a particular car is in high demand, then that will help keep used values high; this can often happen from purchasing limited edition cars, as buyers are willing to pay extra to get behind the wheel of a popular yet more rarer model.
Some modifications may increase the value of the car. But unless there is strict paperwork and sometimes authenticity is involved in the installation then there’s not much that will be added. Parts will generally wear and decrease in value straight from the first use. For all those modders out there though, having modifications done on a car may also increase the value of insurance premiums; especially if the modifications are performance related.
Some other modifications many standard cars can have include stereo system including speaker upgrades or even a trailer hitch. Installing tow bars yourself can be tricky with trailer hitches but roof racks DIY is another popular choice for the larger estates and hatchbacks to SUV’s which can instantly give that look that the car is complete with extra haulage potential. The ability to carry trailers and bicycles is a very attractive feature for many car buyers. Some models come complete with a roof rail to allow the flexibility to install universal racks.
Choosing the right product can be a breeze as soon as you know your reg and identification number.
Typically, if the car has been looked after for many years including minimal use and is still in its original factory released ‘look’. Then some collecters may be keen to bid on it from the point that they may personally have some sentimental value to the model.
When it comes to selling your car, these tips may help you minimize the damages that devaluation from age and outdated tech can do. Unless your car is brand new from the showroom, your return will always be less than your original investment.
Have you recently sold your car and are looking to invest in another one? What things helped you keep as much value before sale? Let us know your tips in the comments below.
Image by Jill Wellington from Pixabay