Car depreciation is something that should be tagged with the classic “life, death, and taxes” statement as it holds the same sentiment: it is inevitable. It formally refers to the relative rate your car loses its value after its first year. This is the number one factor when it comes time to sell your sentimental vehicle in any manner possible.
Car dealerships, independent car lots, and online apps are just a few ways to execute the deal. Everybody wants to get the best car appraisal possible and there are actionable steps that can be taken to increase the price of your car:
This is a very “duh” statement that gets overlooked, especially among the younger demographic vehicle owners. Going to the local shop for your vehicle’s oil change cadence and checking your engine with specialists are two ways to chip away at loss percentages when it comes to maintaining value.
If the engine and transmission are going to go bunk, the car might as well be a shiny piece of metal that can sit in the backyard to attract wasp nests. The simple things add up and are always going to be valuable to sustaining the car’s value as best as possible.
Another overlooked maintenance feature is regularly changing out tires. These are expensive – especially with luxury vehicles – but this will ultimately help the suspension, gas mileage, and lack of road damage.
Purchase a High-Resale Model or Make:
Certain car brands and particular makes will maintain their value over time in comparison to other cars. For instance, Lexus and Toyota are two brands that retain their respective value over time. These are reliable, sustainable cars that has been proven throughout the past couple of decades. Combining that with the ever-growing technology, the aforementioned brands are very popular for consumers looking to hold long-term as they understand that the trade-in value will be significantly higher than other brands and makes.
This is not an option for everyone. Incomes and situational factors are too complex to give this as a best practice to the average American. A luxury car, such as Lexus, is not cheap upfront. However, in the long run, a reputable brand will run its course with the utmost efficiency.
Consider a Used Car:
As car depreciation affects newer models the most after the first three years, it is a viable option to purchase a used car for the model or make that you desire. This lets you off the hook for the initial depreciation of 40% across the board for most new vehicles.
The only things to consider is the mileage and car maintenance to mitigate more depreciation. However, as used cars are getting more expensive throughout Q3 of 2022, purchasing a new vehicle might be in your best interest. A lot of this has to do with the market and its performance. Keeping an eye out for what the car market has to offer will adjust your initial plans but does not equate to a bad outcome.