What is car depreciation?
Car depreciation is the process of your car losing value over time. For example, if you buy a car for £15,000 and then a few years later it is only worth £10,000, the car has depreciated £5,000 in value.
Most cars will see their largest fall in value during the first year after they are newly registered, which is good news if you are looking to buy a car which has a few miles on the clock already. Depreciation starts to slow down after a car becomes a year old and slows down further when it reaches 3 years old.
Depreciation is often an overlooked cost when buying a new or used car, despite the fact that it can be one of the most expensive parts of car ownership.
What affects car depreciation?
Age and mileage
Age and mileage are the two most important factors in depreciation. Generally speaking, the older a car is and the more mileage it has covered, the lower its value is going to be. This is also true of the number of owners; the lower the better.
Condition
Mechanical and interior/exterior condition can also dictate a car's value. Maintaining the manufacturer servicing schedule and keeping the car in nice condition with little to no visible damage will mean it is worth more to potential buyers.
MOT & Warranty
A car without an MOT is worth significantly less than a car with 12 months MOT. Cars that are still under manufacturer warranty are generally worth more, too.
How to minimise depreciation on your car
Keep it in good condition
The best thing you can do to minimise depreciation is to keep the car in nice condition. Avoiding damage to the inside and outside of your car is crucial to maintaining its value.
Maintain it properly
Keeping to the manufacturer's recommended servicing schedule is very important. Cars with "full service history" are worth more than ones with part or no service history.
Avoid modifications
Modifying your car makes it more personal to your tastes, but it also lowers the number of potential buyers, reducing its value. This includes things like vinyl wraps, engine modifications and fitting aftermarket suspension.
Sell your car with CarStore
At CarStore, we guarantee to give you the best price for your car when you sell it to us.
Our quick and easy online car valuation tool lets you see the price you'll get for your car, and you can then arrange to drop it off at one of our nationwide drop-off points.
