Once the sale is made and the car keys are transferred from the car salesman to its registered owner, the brand new car’s value starts to decline steeply. Even before you drive your new car out of the showroom and onto the asphalt, your car immediately loses its value, even if you add exquisite camel skin dashboard covers to your new purchase.
According to the American Automobile Association (AAA), a sedan that drives for about 15,000 miles yearly depreciates by $3,392 annually, which amounts to 60% of the total costs of its usage. At best, a car will be worth as much as 35% of its original price after five years or 60 months. So how does one lessen the impact of depreciation on a very fast-depreciating asset?
While customization and adding some personal color to the car seems to be the trend nowadays, it is just not the best move if you want to get a high resale value and low depreciation rate. Color is a definitive factor. Vehicles with neutral colors such as red, silver, white, and black will have more chances of getting resold at a higher price than those with custom paint jobs and customized interiors. Neutral colors are more likely to remain popular than those with flashy decals and accessories, so it’s best to stick to neutral car floor mats as well.
Keeping your car well-maintained also helps in slowing down the car’s depreciation. Well-oiled engines, waxed frames, and clean interiors, floor matting, and seat covers can do a lot to make the most out of any car. Also, having a mechanic routinely check your vehicle’s major parts can help spot any defects at an early phase, which could help save you dollars in major repair costs in the long run.
While certain car accessories may not help increase the car’s resale value, installing personalized yet neutral and useful accessories such as GPS, speakers, car floor mats, and auxiliary jacks may help in keeping the depreciation rate at a minimum.
Keeping your car’s exterior clean and waxing it frequently will help to condition the car’s exterior, thus lessening the car’s depreciating value. Washing your car regularly can also help you spot minor dents and scratches – which most can be easily corrected thus saving you money before these defects become too great, thus adversely affecting the resale value of your car.
One thing every car owner must understand is that no matter how reputable the maker of their car is, or how well they maintain their vehicle, they will still depreciate, some even more than others. A car’s depreciation can be counter-balanced by following the simple tips mentioned above. Furthermore, performing routine maintenance every couple months or so, a wash every week, and a regular dusting of the interiors can make anyone get the best out of their automobile.