Much like the way technology continues to evolve at a rapid rate, cars too can become outdated over time. What this means is that the car you buy today, will be worth a fair bit less over the years as newer models get released with updated features. Whether you’d like to remain driving the newest model or just want to make sure you get the most out of what you’ve paid for, then you’ll need to know the best ways to beat depreciation and retain the most value from your purchase.
What to expect from depreciation
According to car experts the Dog and Lemon Guide, the average new car in Australia depreciates by 15% in the first year, reaching 45% after three years. After that, it will depreciate at about 10% annually, assuming your mileage doesn’t exceed 15,000 kilometres per annum. What you’ll also have to factor in is that prestige cars will generally depreciate at a quicker rate than the average family car.
What can you do to ensure that this loss remains as low possible so that you can maximise its resale value?
- Choose a well-known brand and best-selling model, avoiding any make or model that is soon to be discounted. However, if a model is popular amongst car rental businesses, this might impact your resale value in the future.
- Ensure that your car has a long factory warranty. Some car brands offer ones for up to seven years.
- Stick to primary colours and avoid outlandish ones (i.e. bright yellow or green), which might be hard to sell.
- When purchasing a desirable model, be sure to get the necessary additional extras. For example, it is difficult to sell some prestige vehicles without packs such as a sunroof, leather interior, etc.
- Don’t add modifications that won’t increase your resale value – especially off-road and performance enhancements.
- Ensure you keep a copy of your logbook and that your car is serviced regularly by qualified and registered workshops.
- Keep your car in a locked garage with a car cover when not being driven to avoid exposure to the elements that could hasten its ageing. For example, harsh sunlight can over time degrade an interior and fade paint and fabric.
- Regularly clean your car to avoid stains and marks, as well as treat any leather interior.
- Do not smoke in your car as the smell is nearly impossible to remove and can leave tinges of yellow in the fabric.
- If you have pets, ensure your upholstery is protected at all times from their fur and saliva.
Speak to one of the friendly staff at Simply Finance to discuss what you might be interested in, and they can guide you on the best vehicles for depreciation obligation free.