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Explaining car depreciation 

If you’re buying a car, particularly if you’re buying a brand new car, it’s important to take the car’s depreciation value into account. Knowing a car’s potential depreciation value could help you make a decision that is more cost effective in the long term.

What is Car Depreciation?

Why does a cars value depreciate?

There are lots of factors involved in a car’s depreciation, with the biggest being its age. A new car will start to depreciate the moment you drive it off the forecourt, whereas cars that are 2 to 3 years old will hold their value a little better.

It’s also important to consider the popularity of the make of car you’re are buying. The higher the demand for the car, the less it tends to devalue over time. A car’s perceived efficiency also makes a difference; cars with a reputation for being more reliable tend to keep their value better than others. Car buyers today focus heavily on fuel economy, so cars that are cheaper to run tend to remain popular and keep their value for longer.

How can you reduce your car's depreciation?

Whilst there’s not a lot you can do about who made your car and how old it is, there are still a few ways to reduce its value depreciation:

  • Keep it in good contition - clean and no dents and scratches
  • Make sure it has a full service history
  • Keep the car's mileage low

 

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