Understanding Depreciation Before Buying A New Car.
Buying a car is one of the biggest financial decisions you’ll make, second only to investing in property, and the right choice can help you save thousands, it is important to keep your car is in good condition, keep it as long as you can. By trading up after a few years you begin the depreciation cycle all over again. Car buyers are being advised to think twice about splashing out and buying brand new this spring. Selling points such as great fuel economy may lead people to think they are getting a great deal on their factory fresh car, but one thing that many fail to take into consideration is depreciation. Vehicle depreciation is the difference between a car’s value at the time of purchase and how much it’s worth when it comes to selling it
There are plenty of good reasons to consider buying a used car, one of the main ones being that they cost less than brand new. It is know that a car depreciated at least 28% in the first year off the show room. The rate can every be more depending on the resale market of the make and brand. But you may also prefer to buy secondhand because you want to avoid potentially heavy depreciation, or because you simply don’t drive often enough to justify spending more money. Whatever your reasons, buying used can make a lot of sense for many people.
Here at spares guide, our main focus is on car care, but we do appreciate the benefits of your preferred car be it new or old. We’ve taken the time to consider the cars that make the best buys on the used market. Some cars are excellent in many areas, but for whatever reason, have poor residual values or suffer from disproportionately heavy depreciation. That makes them more difficult to recommend when brand-new. Our observation is when most of us start shopping for a new car, its future resale value is one of the last things we’re likely to think about. While fuel consumption, handling, safety ratings and aesthetic appeal dominate our thoughts as we wander showroom floors, planning ahead to consider how much your car will depreciate in the future is usually glossed over or forgotten,
Once on the used market, however, depreciation becomes less of a problem and the car’s strengths in other areas come to the fore. Not only that, but it becomes easier to overlook some of their weaknesses when you consider just how much money you can save over the cost of a new example. As long as you’re aware of the ways in which a car represents a compromise, you can make an informed decision as to whether the savings make buying a used one worth it overall.
Not all of the cars on your mind cost huge sums of money to begin with, so we haven’t restricted ourselves solely to cars that lose money through depreciation. Some have been chosen because they’re relatively ubiquitous, meaning it should be easier to find the spec you’re after at a good price. Others are included because they were relatively cheap to begin with and actually have good residual values, which you’ll continue to benefit from as the owner of a used example.
What’s more, as a used car buyer, you’ve never had more choice. You can go down the private sales route, or buy from a dealer. Remember if you are buying a second hand car that you many want to dispose of at some moment it time, it’s important to study the resale market else you might end up paying for scrap removal or the vehicle rotting in a junk yard.