The 8 Factors that affect a car’s depreciation rate
How to reduce depreciation when owning a car?
Some cars depreciate faster than others. In this article, we explore the main reasons for depreciation and how you can maintain the residual value of your car as high as possible.
1) How many Km’s you drive
The more you drive the less your car will be worth. If you drive around 20,000kms x year your car will lose approximately 60% of its value in 3 years.
2) Reliability
Some cars have a more reliable reputation than others, a fact that’s backed up by customer satisfaction surveys.
3) Number of owners
When it comes to holding on to a vehicle’s residual value, the rule is: the fewer owners, the better.
4) Service history
Having a complete service history is helpful. If the service book has been correctly stamped, or you have the receipts to show the vehicle has been serviced in line with the manufacturer’s recommendations, it will be more desirable and more valuable.
5) Desirability
Some vehicle manufacturers ‘face-lift’ or replace models every few years and with the speed of innovation in recent years even a 2 or 3 year old car can feel outdated.
6) Fuel economy
The more km’s per litre the better. Although, with fuel in the region still being cheaper than water in some cases it’s less of an issue here in the GCC.
7) Length of warranty
Some of today’s models come with a seven-year warranty. This extra time can be a real bonus when it comes selling.
8) General condition
Ultimately, damage carries a cost. If your vehicle has bodywork issues or a shoddy interior you can expect an impact on its value.
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