Unless you’re the proud owner of a desirable classic car, there’s a hard truth that almost all car owners must face—your car’s value will depreciate. It’s unfortunate, but true. It’s a disappointing realization when you’re thinking of selling your car; you’re better off to think about it from the beginning, so that you can plan in advance. Whether you’re thinking of buying a car or have just bought a car there are ways you can prevent depreciation so that when the time is right to sell you will get the most value out of your sale.
Time is Money
Timing can play a big part in avoiding depreciation. The experts at Edmunds have crunched the numbers to determine that the best time to buy a car is at the end of the month. This is because many dealers are trying to make up money and hit their bonus. The more money you save, the less you lose in depreciation simply by driving it off the lot. To gain even more savings, try hunting for your next car in December. This is when many models are on their way out to make room for the new year’s model.
So where does that leave you when you are trying to sell a car? Try to work opposite of what the dealers are. When they go high, you go low. Try posting your car for sale at the beginning of the month to catch the car shoppers who are frustrated that they can’t get a good deal at the dealer. Additionally, Edmunds has identified these months as the least discounted months for dealers:
New or Used? That is the Question.
There are plenty of reasons to buy a new car. Depreciation is one reason not to. New cars tend to depreciate quickly, because of the significant depreciation solely from driving off the lot. After the first year, they still depreciate but less quickly - which is why used cars are at less risk for depreciation.
If you do decide to buy a used car, certified pre-owned used cars can provide a little piece of mind that the car is in good shape and that there aren’t likely any ‘gotchas’ that would create extra expenses.
But Wait - Heavy Discounts? There May Be a Reason
Dealers will often try to lure a potential car buyer in with discounts and special financing. We’re sure you’ve seen the commercials. While this may be a good way for you to spend less on a new car (and not have as much ground to make up when you’re looking to sell), there is a reason for this. Autotrader reports than these incentives could mean that too many of that model produced. Or perhaps that model didn’t sell well.
Regardless, this could mean that when it comes time to sell your vehicle that it could be harder to get what you want out of your sale.
Is The Body Style On It’s Way Out?
New models of cars come out every year, but a change in body style only happens occasionally. In many cases, a newer design means that the older designs will depreciate much faster.
Of course, there are exceptions to this rule, for example, the Jeep Wrangler has consistently had excellent resale value.
Luxury brands tend to change their body style less frequently than less expensive models. Depending on how long you intend to keep your car, you might want to weigh the pros and cons of a more expensive make and model. However, you also have to account for the cost of maintenance when considering your long-term bottom-line.
Keep Up with Maintenance
Whether you are buying a new car and plan to sell it or have had your car for a while, taking care of your vehicle almost always pays off in the resale value. Consistent maintenance and car washes can add to the value. Car washes are especially important in the winter, if you live in an area where it snows. Chances are that the road crews are using salt to melt the snow and ice. Salt is the mortal enemy of vehicles.
Do Your Research
One of the best things you can do to prevent depreciation is buying the right car. In one of our previous blogs we covered 2018’s winners of Kelley Blue Book’s cars with the best resale value. Buying the right car makes all the difference when it comes to listing it for sale. Start things off right by making sure the car you’re looking at will be equally as useful when it comes time to buy a new vehicle.
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