How Is A Car Devalued

Let’s face it, there is nothing that can be done to prevent a car from devaluing. Whether it’s a new car or a used car, every car loses value over time. But knowing how much and how a car depreciates can help you profit when it comes to selling your car or buying a second-hand vehicle. In both cases, AUTOFORTRADE can help you with the auto for trade Vehicle Report, and you can check the identity of a used vehicle for free.

Returning to the subject of devaluation, here are 5 things you should know that will help you when buying or selling a car.

The devaluation of a car begins the moment it leaves the dealership

Do you know how much a car devalues ​​in minute 1 of driving it outside the dealership? The answer is simple: It automatically loses 10% of its value. By the end of its first year, the car will lose an additional 10%. However, this figure is not fixed. For cars of less attractive brands, this figure can increase considerably, there are cars that even depreciate up to 50% in some cases. So when you buy a car that’s less than two years old, make sure you know how much its value has decreased.

New cars continue to depreciate over the first 4 years at an average of 15-25% per year. On average, a new car will lose 60% of its total value in its first 5 years of life.

So if you buy a relatively new car, you can save yourself from the first year’s depreciation hit, but you’ll get it for the first 5 years after you buy it.

For this reason, we remind you how important it is to verify the age of a vehicle before purchasing it, as well as to verify the number of owners and the time when it left the first dealer. The auto for trade report tells you all these details.

The economics behind a car’s depreciation

The fact that cars lose 20% of their value during their first year has been a constant over time. Her father will have made these calculations in due course and her daughter will do it when buying her first car.

However, when a car becomes a second-hand car, the dynamics of depreciation becomes quite a complicated game. Like any product, used cars are subject to supply and demand.

At the beginning of this millennium, for example, many new cars were sold at a much higher price than the demand, so leasing became very popular and buying a new car was much easier. With this, the demand for used cars decreased and the devaluation of these increased considerably. Things leveled off for a while but, during the 2008 crisis, depreciation increased again.

The popularity

Beyond market trends, psychology also plays an important role when trying to understand how much a car devalues ​​year by year. The most popular cars have a greater chance of keeping their price than those that are unwanted.

What is considered popular can change each year, so there is a risk of having bought the car that at a certain point was in fashion so that in the following years it will cease to be so, resulting in a greater devaluation of the car than normal.

Now, we already know that the depreciation of a car does not always happen on a constant basis.

Here is a link where you can find out how much your car is worth. If you do not know all the fields to fill in, you can obtain them in the AUTOFORTRADE Vehicle Report.

Physical state of the car

Obviously, a car that has suffered a blow or accident will suffer a faster devaluation than one that has been cared for throughout its life.

There are accidents or claims that cannot be avoided but there are others that can definitely be under our control. Driving aggressively, on poorly paved roads, or treating your car roughly will only cause your car to devalue much faster than it should.

Treat your car gently and gently to prevent premature wear and tear and retain its value for much longer.

Remember that in order to know the hidden damages on a vehicle it is always recommended to check the risk factors for free.

How to maintain the value of a car?

Clearly the value of your car will be subject to the laws of the market and the economy and, that, neither you nor anyone else can control it. However, there are other factors that can help determine how much a car depreciates.

Consider a neutral color: If you care a lot about the value of your car, think twice about buying a neon yellow car. You may like it a lot, but when it comes to selling it, your chances of selling it will be greatly reduced.

Keep It Clean: Imagine you are at a dealership and you come across a vehicle with frayed floor mats, a broken mirror, and dirty windows. The odds of going elsewhere and buying another car are very high. Using a little wax, soap and glass cleaner to keep your car clean can have a big impact on its value when it comes to selling it. The same will happen to other buyers who will pay more for a car with a well-maintained interior.

Look for cars with lots of extras: It is common for some new buyers to ignore certain features in a car to find a better price. However, it is worth looking for cars with certain additional features in second-hand cars. Especially when it comes to security features. You may have to pay a little more, but cars with these kinds of safety extras will better hold their value over time.

Mileage: The number of kilometers you drive is also a factor to consider. The fewer miles you have driven, the more easily you can avoid devaluation of your car. A good tip is: Do not exceed 15,000 km per year. This may seem like a very strict limit if you need to drive a lot daily to get anywhere; but the truth is that the lower the mileage, the higher its value. To find out the actual kilometers of a car, remember to check the AUTOFORTRADE report, which details the mileage readings made.

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