When most of us purchase a car, we give little thought to how much that car will depreciate over time. The loss in value that our vehicles experience as the years go by, however, should merit some attention particularly if the buyer intends to trade the vehicle in for a newer car within a few years. The fact is that your car will depreciate. It is something that every car suffers with the exception of certain collector's models. Furthermore, there is nothing that you, as the car's owner, can do to prevent this loss in value.
But what exactly causes a car to depreciate? What is it that separates the value of a car from the value of a fine wine or a classic painting? The main reason that any car depreciates has to do with life expectancy. Vehicles do not last forever, as time and use take their toll on even well-constructed automobiles. And we're not just talking about the tires and other easily replaceable components. What makes a car depreciate is something more fundamental than that it has to do with the overall usability of the car in the minds of dealers and potential buyers.
Let's face it: if you had the choice between purchasing a car with 50,000 miles on the odometer, or one with 200 miles of usage and all other factors were precisely the same you would choose the one with the fewest miles on it. The reason why goes almost without saying: you can reasonably anticipate that the less-used vehicle will provide you with more potential miles of driving usage than the more driven one. When it comes to age and expected life-expectancy, the reason a car depreciates can be summed up as a matter of common sense.
There are other reasons a car depreciates, however. For example, a vehicle that suffers damage from being in a collision will often be a car that depreciates as well even when it is repaired. Moreover, in real terms, almost regardless of usage, every car can be expected to lose about fifteen percent of its value each and every year. That means that your new car will be worth fifteen percent less next year than it is this year, and that every year after that your car will depreciate at a comparable rate.
To add insult to injury, new cars depreciate as soon as you drive them from the dealership. Yes, the moment your wheels touch the street, the most you can reasonably expect to receive from the dealer if you decided to immediately return and try to get them to take the car back in a resell is the wholesale price. That means that every new car depreciates by thousands of dollars within a few moments after the purchase is made a phenomenal rate of loss!
Though some cars depreciate at a slower rate than others, the fact that every car depreciates should just be taken as a given. Worrying about how much a car depreciates is like worrying about the weather it's going to happen no matter what you do, so you may as well just try to get as much life out of it as you can. If you focus your attention on whether the car meets your immediate needs rather than on how much the car depreciates in value over time, you can ensure that you get your money's worth out of the vehicle no matter how much its resell value deteriorates over the years.
But what exactly causes a car to depreciate? What is it that separates the value of a car from the value of a fine wine or a classic painting? The main reason that any car depreciates has to do with life expectancy. Vehicles do not last forever, as time and use take their toll on even well-constructed automobiles. And we're not just talking about the tires and other easily replaceable components. What makes a car depreciate is something more fundamental than that it has to do with the overall usability of the car in the minds of dealers and potential buyers.
Let's face it: if you had the choice between purchasing a car with 50,000 miles on the odometer, or one with 200 miles of usage and all other factors were precisely the same you would choose the one with the fewest miles on it. The reason why goes almost without saying: you can reasonably anticipate that the less-used vehicle will provide you with more potential miles of driving usage than the more driven one. When it comes to age and expected life-expectancy, the reason a car depreciates can be summed up as a matter of common sense.
There are other reasons a car depreciates, however. For example, a vehicle that suffers damage from being in a collision will often be a car that depreciates as well even when it is repaired. Moreover, in real terms, almost regardless of usage, every car can be expected to lose about fifteen percent of its value each and every year. That means that your new car will be worth fifteen percent less next year than it is this year, and that every year after that your car will depreciate at a comparable rate.
To add insult to injury, new cars depreciate as soon as you drive them from the dealership. Yes, the moment your wheels touch the street, the most you can reasonably expect to receive from the dealer if you decided to immediately return and try to get them to take the car back in a resell is the wholesale price. That means that every new car depreciates by thousands of dollars within a few moments after the purchase is made a phenomenal rate of loss!
Though some cars depreciate at a slower rate than others, the fact that every car depreciates should just be taken as a given. Worrying about how much a car depreciates is like worrying about the weather it's going to happen no matter what you do, so you may as well just try to get as much life out of it as you can. If you focus your attention on whether the car meets your immediate needs rather than on how much the car depreciates in value over time, you can ensure that you get your money's worth out of the vehicle no matter how much its resell value deteriorates over the years.
