It’s a well-know fact that if you buy a car today, in a couple of years’ time it will drop in value, even if you never drive it.
There are some vehicles that buck the trend of this general economic principle such as classic cars, but for most of us depreciation is just a part of the cost of getting from A to B.
Another general rule of thumb is that the biggest chunk of depreciation comes in those first few moments of ownership as it rolls out of the showroom for the first time. This is why we’re such fans of nearly new, which is where you get the best balance between the benefits of brand new without the price tag.
Generally, the drop will be around 15-35% in the first 12 months, rising to up to 50% or more over three years. Some makes and models fare better than others, but this is a big spread of averages.
There are other factors aside from age and mileage that influence depreciation and resale value. How you look after your car whilst you own it can make a big difference to what you’re likely to get for it when the time comes to upgrade, so let’s take a look at 5 of the most common factors.
Smoke particles can get trapped in the air conditioning system and ingrained in the upholstery, and it’s almost impossible to eliminate entirely without expensive specialist equipment.
For ‘expensive specialist equipment’, read ‘this is going to affect the resale value of your vehicle’! Which is the reason why smoking in your car can have an impact on the value.
All cars over 3 years old must have an MOT by law, but servicing is often seen as more of an optional extra. The manufacturers recommend a schedule you should aim to stick to for things like oil and filter changes, as well as checks on other parts that become worn over time and mileage.
If you skip or delay servicing intervals it can have an impact on how the car behaves both in terms of comfort, performance, and safety.
The longer-term consequence though, is that an incomplete service history is going to be flagged up when you come to sell your car and may well affect the amount you get for it.
As we saw for cigarette smoke, dogs can leave behind a distinctive odour that gets into the fabric of the upholstery and can be difficult to remove.
Protecting the seats from direct contact with fur, feet and wet noses can help reduce the impact, but animal hairs ingrained into nooks and crannies can also give a negative impression about how well looked after the car has been.
We often think of long journeys or commute to work as being the biggest contributors to mileage, but those short journeys can really add up as well.
The trips the local shop that could have been walked or dropping off kids when a lift share could have been arranged not only bump up the miles, but short journeys are generally less efficient than longer ones, so they cost you more in fuel as well.
As you can see, there are plenty of things you can do to increase the resale value of your car. One other interesting thing to point out is that throughout 2021 used car prices have been steadily increasing. So much so that some models are selling for more than their list price a year ago, despite having driven 10,000 miles.
This is an unprecedented spike in the used car value though it seems to be slowing in the last couple of months. For most of us what this means is that the depreciation we all take for granted is likely to be at the lower end of the average over a 3 year period.
Our Thame Cars vehicle valuation tool is updated with the latest data on vehicle resale prices, which means it’ll give you an accurate idea of what your car is currently worth. Many of our customers use this tool intermittently to keep a check on the value of their vehicle throughout their ownership, and now is a good time to take a look for yourself.
Although we can’t take into account the 5 other factors that we have discussed above, the tool will give you an up-to-date estimate based on national statistics. It’s really easy to use, which you can find out on our website here:
Simply enter your car reg and your contact details, and within about 30 seconds you’ll have your valuation displayed on the screen and sent to you via email. If you want to discuss your car’s valuation or are thinking of using it as a part exchange, please feel free to give us a call and one of our sales advisors will be happy to talk to you.