3 Useful Tips to Reduce Car Depreciation
Are you desperately looking for ways to reduce car depreciation? Well, a lot of people are on the lookout on how they can accomplish this feat, especially since brand new cars depreciate by about 20% during their first year and up to 60% during the first five years. To successfully get around this problem, here are some useful tips that you may want to consider:
Choose a more fuel-efficient car - It's a fact. Fuel-efficient cars depreciate more slowly since such cars are considered to be more in-demand. The Corporate Average Fuel Economy (CAFE) clearly states that all car manufacturers must comply with their set standards if they want to continue doing business in the US. CAFE currently sets acceptable fuel efficiency rate at 30.2 MPG and 24.1 MOG for cars and trucks, respectively. However, this gas mileage standard is set to increase by 2025.
Keep it after it gained 100,000 miles - Most car owners tend to buy a new car when their old one has gained 75,000 miles. By then, the car will be about five years old. However, if you can keep your car until it has exceeded 100,000 miles, you will enjoy significantly slower depreciation rates and lower maintenance costs.
Consider buying used cars - Considering the tragic fact that brand new cars depreciate by as much as 20% during the first year (starting from the day you drive it off the dealership lot), you may want to buy one to two year old cars or even five year old cars instead. These certainly wouldn't have that new car smell or all the latest features but you can sleep more soundly at night knowing that you are not losing a lot of money as your car depreciates.
To further reduce car depreciation costs, here are some suggestions that you may find useful:
- Keep a regular maintenance schedule. You can significantly reduce car depreciation costs by taking your car for regular maintenance and check-ups following the manufacturer's recommendation. Remember to keep the receipts whenever you do since you can use it to your advantage when you finally decide to sell your car. It is also highly advisable that you use the dealership for servicing to keep your VIN record updated.
- Keep mileage down. Keeping the mileage down, especially during the first five years, can keep your depreciation costs at a minimum.
- Keep your car clean and fresh. To get high resale value, try to abstain from eating, drinking and smoking inside your car. Have your car cleaned and detailed regularly, fix small problems promptly and protect your car's appearance. These things will certainly help slow down the rate of depreciation and allow your car to fetch a higher resale value.
Slowing down your car's depreciation rate can be achieved – if you know how to do it right! What is your view? Share your comments below.