Beating car depreciation
When buying a car, there are certain costs people think about, like fuel consumption, tax and car insurance. One thing that’s often overlooked, however, is depreciation - the loss in value between when you buy your car, and when you sell it. Whatcar estimates that most cars lose between 50% and 60% of their value in the first three years of ownership, but there are numerous ways to avoid this.
We spoke to James Dower, the Senior Editor of Black Book Cap HPI to find out what his top tips are for avoiding depreciation.
When buying your car
Firstly, you want to pick a car that doesn’t lose too much resale value, whether it’s used or new. There isn’t an exact science to this sort of thing, but knowing what to look out for will give you a head start to beating depreciation. Dower’s advice is that “sometimes buying the cheapest does not always mean it is the best deal – look at the overall value of the deal.” To get a car that represents overall value, there are a few things to keep in mind.
Make and model
Used car sites will be your best friend in this situation. Dower suggests checking what the competition looks like for your model, and whether or not certain things bring the resale value up or down. He also says, “If the vehicle has a higher than average mileage it can knock thousands off the price of your car.” Have a look at these sites to see what the averages are for similar styles and ages.
Look out for enhancement options
Things like alloy wheels and appearance packs may be something you want to add for your own satisfaction, but Dower says that these can also help you stand out from the crowd when you sell your car in future. There are also certain things to ensure you have, like Bluetooth:
Bluetooth is now almost expected in any vehicle so those without may struggle to find new owners and with mobile phone connectivity high on buyers requirements, a USB connection for both music and making/receiving phone calls is important.
However, he does warn that “a vehicle that has undergone extensive modification can void warranties and make them unappealing to the average buyer.” Similarly, your insurance premiums will be affected by any modifications, putting people off and lowering the value when you sell. Check with your insurance company before making any changes.
Choose your colour wisely
Dower says, “Pick a colour choice that will appeal to a wider audience rather than a ‘stand out’ colour that may put some buyers off. Metallic paints along with black, red and white solid colours are a relatively safe bet.”
When you have your car
Wear and tear is a big part of deprecation, so rule number one would be to avoid getting into any scrapes! But there are some things to consider while you own the car to guard against that dreaded depreciation.
Keep your documentation safe
According to Dower, you’ll slow down depreciation if you have your documents to hand when it comes to selling. He says, “Keep your service history and spare key somewhere safe. The loss of either can be a problem when you sell the vehicle on.” As well as this, keep hold of your V5C log book, as many buyers will not purchase a car without. If you lose this, you can apply for a new one with the DVLA.
Keep it fresh
Smoking or bringing your pooch into the car can seem like an insignificant thing to do at the time, but Dower says getting the interior cleaned “can cost anything up to £150 and is still no guarantee that the vehicle will smell sufficiently fresh.” He also says, “in severe cases, the internal fabric and head cloth may have to be stripped out too – a process which can cost hundreds of pounds.” So take a road trip with a wet dog or light up on the go at your own peril.
When it comes to mileage Dower says, “The key to minimising depreciation on your vehicle is to look after it. Be conscious of the impact of high mileages and if you’re lucky enough to be a two car family, spread the journeys.” He also advises people to “make sure that services are undertaken within manufacturer guidelines and by an authorised workshop” so your service history is all above board.
When selling your car
This is crunch time for getting the most for your car. Hopefully, you’ll have followed the tips above which will have made things go significantly smoother, but you should try and get your car looking great for that extra boost at sale time.
Make it sparkle
Nobody wants to buy a car that has empty water bottles in the footwell and dirty windows. Before you sell your car, make sure it’s spick and span. After all, you only get one chance to make a first impression, and you want to give as little reason as possible to potential hagglers to drive down the price.
Be honest and thorough when selling, even if that means pointing out any imperfections. As Dower says, “It saves time and hassle to be transparent about the vehicle.” As well as this, he advises to “take as many photos as possible both interior and exterior giving potential buyers plenty of views.”
Essentially, there’s no way to completely avoid depreciation, but using these tips can help slow it down, and hopefully get you a better price at resale. Taking care of your car will also keep it looking good and running well for longer, which is certainly an added bonus.
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