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All you need to know about car depreciation

Are you thinking about investing in a new car brand? If so, then you might be planning to do some research on factors that you should take into consideration in order to get a great working and reliable vehicle. One such factor that every buyer consider when purchasing a brand new or used automobile is depreciation.

Generally, every type of vehicle depreciates as soon as you drive it out of the dealership’s yard, unless you select a model from a reliable manufacturer like Mercedes 300SL gull wing roadster of 2030 or Jaguar E-type. This means you will be simply burning more money on that already depreciated automobile.

Moreover, when your vehicle will turn into a second-hand model, you would have already spent expensive registration costs and delivery charges of the dealer.  

Automobiles start losing most of their worth during the first three years after they are purchased. However, the rate of depreciation may vary depending on the type, size and model of the vehicle. Although only a few of automobiles can be kept as a vintage collection like Merc gull-wing, but there are still some models that retain better resale value than others.

How to beat depreciation?

No matter what type of vehicle you want to purchase, there are a few things that you can certainly do in order to retain its worth. This will help you to get a good value when you plan to sell the automobile a few years later. First of all, it is always best to buy a used model. It could be 1 or 2 years old and still has the warranty by its manufacturer. However, it will tend to lose a lot of its initial value.

It is smart to purchase an automobile at the end period of the sale or look for a model that is on a run-out sale. Even though its resale value may be low, but it can still save you a significant amount of money on its purchase price. Make sure to look for a dealership, which offers ‘drive-away’ deals. This means you won’t have to pay any registration fees or delivery charges to the dealer.

It’s a no-brainer that the reliability and reputation of a vehicle have a huge impact on its resale value. Therefore, make sure to invest in a make or model that have a good record for offering high-end performance and its durability.

Don’t forget to do some research!

There are certain models that retain good resale price. But you can still expect to lose more money if you are purchasing an automobile that holds good value in comparison to other models. For instance, if a vehicle is worth $50,000 and still hold 75% of its original worth, you can expect to sell it for $37,500 after three years of its ownership.

Take the necessary precautions

If you like bold colors on your automobile and adventurous add-ons, its costs can hit your pocket later on when you tend to sell it. This is because your prospective buyers may not like the pretentious things that you like. And, they may use these drawbacks to negotiate a lower price for your vehicle.

Optimising the resale value

In order to optimise the resale price of your car make sure to get it serviced on a regular basis and keep all the service records in order. This will give you a good opportunity to show all the service records to your potential buyers and tell them how well you have kept your automobile. Also, make sure to park your car in the garage, if possible. This will reduce the wear and tear of paint because of environmental conditions like dust and sun.

Wash and wax your automobile on a regular basis and keep its interior clean. If you notice any cigarette burns, worn-out carpets, or torn upholstery, make sure to fix it. As it can leave a bad impression on the minds of your potential buyers. Take notice of small damages like small dents, scratches or stone chips on the exterior of your wheels.  Consider getting them repaired as the buyers can use it as a negative point while haggling over the price.

Generally, selling your automobile personally can get you a higher price for it rather than trading it in. However, it will take your efforts and time in waiting to get the right buyer. However, if you think of selling your old vehicle before purchasing the new one, you could have trouble with in terms of transport for some time. On the other hand, if you decide to purchase a new car first, then you will end up paying the insurance and registration costs for your new as well as the old vehicle until you get a buyer for the old one.

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