Understanding Car Depreciation

Understanding Car Depreciation

Before you pick out that perfect new car, you will need to understand that car depreciation is something that should be addressed. No matter what the make and model of a car is, every car will experience a level of depreciation over time. In fact, this is going to be among the important things you will need to have in mind when you are picking up your car.

In the simplest terms, deprecation is the decrease in value that your car goes through over a specific period of time. This depreciation begins when you drive any vehicle off the dealer’s lot and varies based on the final negotiated price. As the car ages and you continue to use it, the value of the car will continue to go down. Since all vehicles will experience this, you will need to not stress about it. Instead, you will want to focus on the things that can help you to reduce the rate of depreciation for your vehicle.

This will include things like keeping up with the maintenance on the vehicle and ensuring that you care for both the interior and exterior of your vehicle. What you will find is that a car that is listed in very good condition will bring in more funds than one which might be only considered fair.

Certain makes and models tend to depreciate at a slower rate than other models as well. For example, Toyota has been one brand that is known for keeping up its value for a longer period of time. Ford in turn has been known to produce vehicles that are among the worst when it comes to depreciation.

What you will want to do is to look at the features in a car that future drivers might find value in as well. This will be things like top of the line engines and increased safety measures. You will find that helps them to hold on to more value over a top of the line stereo system.

Finally, understand that in a two year period, your vehicle is going to drop in value about 15% of what it was worth when you picked it up. Since this is the average timeframe that many people are holding onto vehicles, you will want to keep that in mind when you are looking at the possibility of investing in any vehicle. Because of this, make sure that you know the wholesale price of any vehicle before you set foot on the dealer’s lot. You can then use that information to negotiate a better deal for yourself and avoid having a depreciation level so steep that you will find yourself less likely to be upside down on your auto loan.

Dean Saliba

Dean Saliba is a freelance writer, professional blogger, media enthusiast, dirty football player, and huge professional wrestling fan, who covers a wide range of subjects and niches including: making money online, traffic generating, pro wrestling, blog reviews, football, how-to guides, music, internet marketing and more.