Softening the Blow of Car Depreciation

The purchase price of a car can be excessive depending on the age, the make and the model that you opt for. The most disheartening aspect of buying a new car is how quickly the vehicle can lose money and the fact that you will not get back the money that you have put in. Cars are a necessity and a luxury, but they are not always considered to be a good investment. There are a range of costs which come with cars, not just the initial price but the other factors that come alongside it such as running costs, maintenance and often hidden expenses that may not have been accounted for. The only way to make a car affordable is to have a strict budget and to find every way possible to ensure the costs are low such as reasonable insurance premium costs and an economic car that will not require a high amount of fuel to run.

When buying a car there are so many factors that need to be taken into consideration before you make the final decision to purchase something that you are unsure about in terms of cost and its re-sale value:

• Will the age of the car affect my insurance?
• Is it economical?
• How much mileage will I do in the vehicle?
• Will I be able to recoup some or any of my initial investment?

Gaining multiple insurance quotes from insurers such as Budget Direct, understanding the set up of the vehicle and knowing how many miles you will possibly drive are all areas that are easy to discover. The amount of money your car will sell for once you are ready to change it is something that will never be certain.

Typically, cars lose 60% of their original value, brand new cars lose a large chunk of money the second they are driven away from the forecourt. After just 3 years cars are said to be worth 40% of the original price, which is a loss of 20% a year. The larger and more luxurious the car is, the faster they will lose value and depreciate to a degree where you are lucky to earn back a fraction of the money you invested.

Although you cannot stop depreciation completely there are things that can be done to slow it down and give you the opportunity to recoup more money that you ordinarily would have:

• Keep the car in a good condition in terms of its appearance. Good paintwork and nice interior are the things people focus on the most.
• High mileage encourages the beginnings of mechanical and technical faults and no one is willing to take on a vehicle that will incur expenses. Keep the mileage to an absolute minimum.
• Regular servicing will not only ensure the car is safe and working properly but will show a buyer that it has been well looked after and is in line with the manufacturer recommendations
• Keep the service book up to date and make a note of any accidents or repair work that has happened
• A car that is 1 – 2 years older appreciates much slower than a brand new car
• Fuel-efficient vehicles are known to depreciate at a slower pace and will hold their price longer as it is the technology that is the most desired now in cars.
• Cars tend to hold their value once they have reached the 100,000 mark so for older vehicles or ones with high miles, hang onto them until they have reached this point