Is it the right time to sell your car?

Car depreciation is a term that is more familiar to people who are planning to sell their car. But, what really is car depreciation? What are the factors that affect my car’s value? When does it depreciate in value? How will it affect me? How will it affect my vehicle? What can I do to minimize my car’s value depreciation?

To make it simple, car depreciation is the decreased value of your car. So basically, it is the difference between the value of your car when you bought it and its value when you decide to sell it. The depreciation in value of your car has various factors. Most people think that the main reason is the vehicle's condition. Well, it’s not far from the truth, but there are more factors that can influence the resale value of your car.

1. Factors that affect the car’s value

The following are the main factors that affect your car’s resale value.

• Mileage: It is considered one of the main factors of car depreciation. The average mileage for a car is approximately 10,000 miles per year. Higher miles mean lesser car’s worth.

• Reliability: Some cars are reliable and others are not. This information can be based on or backed up by customer satisfaction surveys.​

• General Condition: As what most people think, the car’s condition plays a major role in measuring its value. Damage in its interior or exterior will mean lesser value.​

• Service History: A complete and well-serviced car has more value than those with incomplete service history. It is best that you have the complete record of your car's service history to show proof of how well-maintained and well-serviced your car is. This means that your car’s in great shape and condition.

Keep all service records of your car

• The number of previous owners: It simply means the more owners it has, the lesser the value.​
• Warranty Length: Some cars have 3 years warranty which is actually good. But today, most cars come with 7 years warranty that is a big bonus for you when you want to sell your car.
• Desirability: Of course, the consumer’s choice will have the most value. And for consumer’s, new cars are more desirable than the old one. That is why, most of the car manufacturers have their old models face-lifted, enhanced, remodeled, or replaced every 10 years or more. The more recent models hold more value than older ones.
• Car Size: You may not know, but big and luxury cars depreciate more than smaller cars. Why? Because these cars are high-maintenance and they cost more to run, plus the accessories and body-parts are costly (when it comes to repairs and replacement)

Big cars depreciate faster than small cars

• Fuel Economy: Fuel-efficiency also plays a major role in car depreciation. The more miles your car can run per 1 gallon of fuel, the better.
• Paint Color: Most people don’t know this, but car colors also have an effect on your car’s resale value. The most common colors of cars are black, white, and silver. These colors depreciate faster than other cars that have uncommon colors such as yellow, green, and orange. You might ask why? It is because common colored cars are everywhere. If buyers want a car that is of a common color, it will be easy for them to shop for cars with that color.

Colors have an effect on your car's value

• Car Brand: Believe it or not, most buyers tend to choose cars from brands that have a record of durability and reliability. Picking the best and known brand will be a plus and an advantage when you come to selling your car.
• Road tax: This should also be taken into consideration. Cars that have higher fuel guzzling tend to be less desirable, thus decreasing the car’s resale value.

When does it depreciate in value?

Your car's value will start to decrease the moment you buy it and hit the road. You might ask why? Basically, it is because the ‘new car’ will be labeled ‘used car’ when you start to drive it. Its value will decrease by 10%-11% once you decide to drive it off for the first time. It will decrease more as the time goes by.

After one year, your car loses 25% of its original value. Three years later, 46% of your car’s value will be lost. And after five years, your car’s value will be decreased by 63%. But not all cars have the same depreciation rate; some have faster or slower depreciation rates that can depend on the factors stated above.

Your car is considered as one of your great investments. But the return may not be as satisfying as you thought it would be. You invested a large amount of money for a brand new car, but when you decide to sell it, the value will be lower than the original amount you paid. Same as to everything that is pre-owned. Once it becomes a used car, its value will drastically decrease. Good thing there are tips that can help you minimize or slow down your car’s shrinking value.

>>> Also check out: 

• Car Selling Question: What is My Car Worth
• When Is the Best Time to Sell My Car?

Your car's value starts to depreciate the moment you drive it off the road

Tips to minimize your car’s depreciation rate

If you’re planning to buy a car and have plans to resell it after a few years, it is better to take note of these simple tips that can help slow down your car’s devaluation.

• Buy a used car: Let the previous owner experience most of the depreciated value.
• Maintain the car’s overall condition: A well-maintained car has more value than cars which are poorly handled.
• Buy smart: Choose the best and most reliable brand and pick the right color and other options that will add value to the car.
• Mileage: Keep your mileage low. Remember that cars with lower mileage have higher resale value.
• Avoid unnecessary car accessories: Useless car accessories will only devalue your car.  If you want to add something in your car, it is better if it will be something functional like a GPS, air con, or music player.
• Keep all service records: It will be proof that your car is regularly checked and is in great condition.
• Look for any damage: If you see any damage in your car, have it repaired as soon as possible.
• Research: It is best to have thorough research on the brands that have slower depreciation rates.

Research for cars that have slower depreciation rates

Now that you know when and what the factors are of car depreciation, you are now aware of the things you must and mustn’t do. Remember and consider these pointers from Philcarnews.com. It will help provide your car higher resale value.