Whether or not your car has been under the rug for a while, your car is due to be worth much less than what you paid for it. This is the result of every car owner’s nightmare, ‘depreciation’.
Depreciation plays a major role when calculating the resale value of a car. Your car’s value will depreciate as soon as it touches the road. However, the rate of depreciation decreases as the car gets older. Your car value is also dependent on its mileage. The lower the mileage, the higher your car resale value will be. Different car brands also depreciate at various rates, thus model, age and year are important.
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CarZar has written a guide to help car sellers and car owners understand the effect of depreciation on a car’s value.
What is car depreciation?
In simple terms, car depreciation is the rate at which a car loses its value over time. However, different car brands will depreciate at different rates of depreciation.
Depreciation is generally the largest expense you will incur over a five year car ownership period.
What will affect my car’s rate of depreciation?
There are various factors that impact the speed at which a car loses resale value, which in turn, alters the price which buyers are willing to pay. When trying to get the highest value for your car, you need consider depreciation against the following factors:
- Age: Almost all cars lose up to 50% of their car value after 3 years.
- Mileage: Vehicles with more than 200,000km on the clock, depreciate faster.
- Service History: Having a Service History will improve your car’s value.
- Size: As bigger cars are more expensive to run, they depreciate faster.
- Condition: Interior and/or exterior damage will reduce the value of a car.
- Interior: Leather upholstery and technology adds more value.
- Modifications: LED lighting and spoilers reduces a car’s value.
- Colour: White cars hold better value than other colours.
- Popularity: Reputable car brands will hold more value and low depreciation rates.
- Owners: Cars with multiple previous owners are worth less.
How fast can my car depreciate?
Different car brands depreciate at different rates. An out-of-the-box car purchase will lose around 15 to 30% of its original value within one year, whereas if you’ve had the car for three years, it would have depreciated by 50%.
How can I slow down my car’s rate of depreciation?
Although car depreciation cannot be prevented, hitting the brake pedal slightly is possible. Certain factors can be controlled, while others cannot; for example, mileage, model replacements and the time you decide to sell your second hand vehicle. By taking action on controllable factors, you can make real difference to the market value of your car.
- Low mileage: Try to retain an average annual miles of 200,000km.
- Regular maintenance: Get your car cleaned before selling.
- Repair damages: Fix any minor car damages.
- Keep a Service History: Maintaining a full service history can improve a car’s value.
- Avoid modifications: A modified vehicle is, in actual fact, less desirable.
- Don’t get replaced: Sell your car before new models reach the market.
- Sell at the right time: SUV’s sell better in Winter, while convertibles sell in summer.
- Sell within warranty: Selling within the warranty period will give higher resale value.
How much is my car worth?
At CarZar, we empower consumers to sell their second hand car seamlessly. No haggle, no hassle.
If you want to sell your car fast and hassle-free while receiving a fair price, or simply want to get an instant online quote for you vehicle to find out how much your car is worth, visit CarZar.co.za.
Receive a free fair, reliable online quote for your vehicle on CarZar.co.za. All you need to do is enter your car details and receive an online quote in seconds! When calculating your free instant online quote, our unique algorithm uses national data to provide fair, stats-based pricing based on market trends and previous transaction histories.
You can then book an obligation-free inspection at any one of CarZar’s most convenient Car Buying Centres or at your preferred location! Here, our professional inspectors will be able to evaluate the physical condition of your car and provide you with an on-site final cash offer. If accepted, your receive instant payment and we take car of all the paperwork!
Sell your car in 30 minutes and beat depreciation today! With CarZar, selling your car has never been easier.