Depreciation represents the true cost of owning a car. The difference between what you pay for your car for and sell it for is money you’ll never get back. While all cars depreciate in value in the short to medium term, you do have some control over how quickly your car loses value. Consider the following to improve your chances of getting your car’s book value when you sell it.
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1. Buy a like-new used car
New cars depreciate at a faster rate than most used cars. This is important because you can avoid a big chunk of a car’s depreciation in value just by purchasing it in almost new condition (i.e. with low mileage and within a year or two of first purchase). However, keep in mind that you may lose the benefit of slower depreciation when purchasing older cars. Older or high-mileage used cars can lose most of their value if run until the point where expensive parts, like the engine, require replacement.
2. Research the make and model
While the difference between used and new cars is often used to highlight the costs of car depreciation, the make and model of the car you buy can have an equivalent, or greater, impact on the depreciation of your vehicle. When buying new there is a considerable difference in depreciation between different car manufacturers, and even models produced by the same manufacturer. Luxury sports cars typically depreciate at a far slower rate than mid-range sedans, while some German car brands depreciate at almost half the rate of their French counterparts.
3. When buying new, buy at the start of the year
Your car’s year of purchase is one of the main factors which establishes its book value. This means it’s a bad idea to buy a new car towards the end of the year, for the simple reason that you could push its resale value up by delaying your purchase for a couple of months and buying the car in the new year. By buying a car at the end of the year you’re effectively aging your car by a year for no reason.
4. Get a light coloured standard paint job
Light coloured cars in factory colour schemes are easier to re-sell than cars with unusual colours or custom paint jobs. When it comes to your car’s appearance, think ‘standard’ and avoid customizations like decals or airbrushing at all costs.
5. Chose your add-ons with care
Especially when it comes to new cars, you can boost your car’s depreciation rate instantly by fitting it with expensive manufacturer add-ons that won’t carry their value into the used car market. These include custom interior finishes, sports suspension, larger wheels and expensive sound systems. Conversely, if you’re buying a more expensive car, equipping it with extras like leather seats or a sunroof can increase its value in the used car market.
6. Maintain the interior
To get book value for your car the next buyer is going to have to feel like your car offers full value for its price. That’s not going to happen if your car’s seats are covered in food or liquid stains, the interior smells like the inside of an old shoe and the car’s interior finishes are worn or cracked.
To preserve your car’s interior:
- put in seat covers
- avoid parking your car in the sun for long periods of time and use a sun visor when you do
- don’t smoke or eat in your vehicle
- put up pet protectors if you transport your pets in your car.
7. Maintain the exterior
The same rules that apply to the interior apply to the exterior. You’re not going to get the book value on your used car if the chassis is scratched, dented or has paint defects. The same applies to your windows and wheel rims. Repair minor damage to the exterior of your car annually, otherwise you’re either going to get a chunk gouged out of the car’s book value on resale or will have to pay for a single expensive round of repairs before you can get its real value in the used car market.
8. Keep the mileage low
Mileage is one of the main factors that will be used to determine your car’s value when you sell it. The easiest way to avoid running the mileage up is to avoid using your car for long distance driving and instead reserve it for city driving. If you want to take a road trip, rent a car and pay the costs for racking up mileage upfront.
9. Hold onto the user manual and service book
It’s a fact of life that the absence of two volumes of paper that may not even live in your car can cause instant depreciation. A car with an up to date service book and a user manual is most likely to get its full value on resale. A car without these documents immediately arouses suspicion and will fetch a lower value – even if it is in pristine condition.
10. Drive better
Cars that are driven hard tend to reveal themselves during test driving. The performance of the car while accelerating, braking or cornering can all give away the fact that the car hasn’t been treated with care. As soon as any potential buyer senses that a car has been driven hard they’re not going to pay book value for it.