For most people, purchasing a car is the second-largest investment we’ll make in our lives behind buying a family home. However, despite the outlay we make purchasing and running a vehicle, it’s well known that the value of cars depreciates horrendously quickly, with around a third of the purchase price of a new model being lost in the first year alone.
By year three, most vehicles will be worth around 40% of their original value and, while car depreciation may slow thereafter, a car will continue to be worth less and less, year on year.
Tips to reverse the tide
While it’s true there’s little you can do to fight the market forces involved in car ownership and depreciating vehicle values; there are several ways you can help maintain a higher price for your car for when you come to sell. Below are just a few ways you could keep your car’s value higher for longer.
Think about modifications
Just like anything else in life, a car is only worth what someone is willing to pay for it. You can get as many estimations from as many experts as you like, but unless a vehicle strikes a chord with a potential owner, there’s little chance it will sell.
If you want to increase the base value of your vehicle (or at least slow its depreciation), making modifications and adding little extras can be a great way to potentially attract a buyer looking for something a little different from the standard factory model.
In recent years, there’s been a huge explosion in online car mod equipment dealers selling kits that will fit most vehicles as well as sites specializing in the provision of extras for specific makes and models.
For example, if you happen to own a Toyota Tacoma, you could use this site to purchase these awesome Tacoma accessories. Search online for your particular car type by manufacturer and model, and you might be surprised at just how many dedicated services already exist for your vehicle.
Ensure you have your car serviced regularly
The majority of common car problems don’t just happen overnight – rather, most result as a cumulative effect of unavoidable general wear and tear our vehicles endure. To combat bigger problems developing over time, you should ensure you get your car serviced regularly so you can identify and isolate potential issues before they turn into significant problems.
Moreover, if you’re already at the point you’ve committed to selling your car, it might be worth investing in new tires and changing the brake pads, so the new owner has less to think about (and less to replace) when they purchase the car. However, you should always weigh up the potential cost vs benefits to make sure you get the best Return on Investment (ROI).
Be able to provide proper documentation, service records, etc
With the growing problem of car theft and unroadworthy vehicles being sold fraudulently as being road safe, car buyers these days will demand to see the full documentation of your car when you come to sell. During your period of ownership, you must keep a full record of any upgrades, repairs, maintenance, and servicing so that, when you come to sell, you can provide these documents.
Ultimately, a well-serviced car will hold a higher value than one that has largely been neglected, so it’s in your best interests to maintain these records. You should also retain paperwork from when you bought the car, as this will verify its original price and confirm its previous service record if you bought it second-hand.
Lastly, you should also ensure you keep any relevant insurance documents – particularly relating to any claims (either caused by you or another party).
Keep to a sensible annual mileage
There’s a common misconception that a car with a lower mileage could hold a higher value however, quite the opposite is true. If a car has a low mileage, it means it won’t have been run often – which can be as damaging (if not more so) as a vehicle that is allowed to tick over regularly.
Also, low mileage can be a sign of a car used mostly for short-run, across-town trips that tend to put more wear on gears and brakes.
As a general rule, most car experts suggest a car should do around 10,000 to 12,000 miles per year to run in optimum condition (and this is also the industry-accepted tally for what should be considered reasonable mileage). If you do more, you could be viewed as over-running the car – less, and it will be assumed the car has sat inactive for long periods.
A car buyer will work out your average mileage by looking at the total on the clock then dividing it by the car’s age in years, i.e. 60,000 total mileage on a five-year-old car, which amounts to an average of 12,000 miles per year is almost perfect.
Additional factors that can reduce a car’s value
Aside from natural depreciation, age and mileage are normally the greatest contributing factors to a car lowering in value. However, there are some other things you should avoid to help keep the value as high as possible:
- If respraying, don’t choose an ‘out-there’ color likely to appeal only to a limited audience
- Don’t cover your car with fender stickers
- If you smoke, don’t smoke in the car
- When coming to sell, ensure you touch up any minor scratches, dents or bumps