As soon as you drive your shiny new car off the forecourt, it loses value. It’s unsurprising, given that the car is no longer new, but many car owners will be shocked to find out how much their car’s value depreciates – and how quickly it does. Generally, you can expect to lose between 10% and 40% of your car’s value in the first 12 months alone. However, there are a vast range of factors which dictate how much values will be lost, and how quickly your car’s value will drop.
By taking an active role in maintaining your car’s paintwork, servicing and maintenance, you can retain as much of your original value as possible. With this in mind, you can recoup as much money as possible when it comes to selling or part exchanging your car for a newer model. Here, the vehicle finance specialists at Anglo Scottish Asset Finance take a look at the best ways to ensure your car retains its value.
Key points
- A new car’s value is likely to fall between 10% and 40% in the first 12 months of ownership.
- If your annual mileage tops 10,000 miles a year, your car’s value could’ve dropped by up to 60% after three years.
- You might think that expensive additions and modifications are likely to increase your car’s value. In most cases, however, mods are likely to reduce your car’s value.
- Always use dedicated car shampoos when handwashing – non-dedicated car cleaning products could damage your car’s paintwork and cosmetics.
Stay on top of servicing
For most car owners, your annual servicing is just another chore to stay on top of, alongside MOT, road tax and insurance. However, it can be a useful tool to retain your car’s value – the service timetable is designed to protect your car’s most vulnerable areas and mechanics. Failings in these are likely to significantly reduce your car’s value.
In fact, according to a Kwik-Fit survey, over 50% of drivers would not even consider buying a vehicle without a service history – so if you’re looking to resell your car, servicing is crucial.
Watch the paintwork!
Even the most careful drivers can be susceptible to dents and scrapes to their car’s bodywork. In most cases, there isn’t a correlation between damage and how well you’re driving – pebbles flying off the road can easily cause minor damage.
It’s worth keeping an eye on any dings and dents, as these can accumulate to your car’s value being slashed. We’d recommend investing in targeted cosmetic repairs where your car has sustained damage, but leave this to the pros – DIY paintjobs can easily lower the value of your car even further.
Avoid modifications
One of the most common ways you can lose value on your car is by adding unnecessary modifications. Just because that new exhaust is expensive, it doesn’t mean you’re adding value to your car. In most applications, you’re actually losing value, so think twice about whether your Golf needs that spoiler before having one fitted.
Even if you decide that your car does need the spoiler, it doesn’t mean that prospective new owners will feel the same! Sadly for petrolheads, even the most tasteful modifications are likely to be a waste of money; you’re highly unlikely to receive the same amount you’ve paid for them.
Keep it clean
It should go without saying that a clean car looks more lucrative to buyers than a filthy one. However, it’s important that you know which cleaning products are helpful and which could be doing more damage to your car in the long-term. If you’re handwashing your car, watch out for coarse brushes, which can scratch paintwork and dull your car’s finish. Strong chemicals and those not specifically intended for your car, such as washing up liquid, can have a similar effect.
Even bird droppings can damage your paintwork if left unattended to set in for a long period of time. If you’re cleaning your car yourself rather than leaving it to the pros, it’s worth using a dedicated car shampoo to avoid damage and maintain your car’s shine!
Watch what you do in your car…
Keeping refreshments in the car for long journeys – or even peckish short journeys – is a must. However, if you’re going to be eating or drinking in the car, be sure to be careful about it. Crumbs can easily be dealt with, though drink spillages can permanently stain upholstery. Just think about what you’re eating and drinking; if you’ve got white upholstery, you’re much more susceptible to issues.
Smoking in the car is another common habit that many car owners are guilty of. This is one thing you should always try to avoid – often smoke can inhabit the upholstery and leave a permanent odour of cigarettes. If you’ve been smoking, you might not notice the smell, but if your car smells heavily of smoke to a prospective buyer, the resale value is likely to plummet.
Choose wisely…
Choosing the right car when first purchasing is another way to limit depreciation. The rate at which your car’s value will depreciate will slow down as your car gets older. Most cars lose the majority of their value in the first three years after leaving the forecourt.
Take your yearly mileage into account when first purchasing your car. If you’re covering less than 10,000 miles a year, it could be better value to buy a lightly used car. In this event, your car’s value will depreciate at a slower rate if you’re covering less miles – and the initial outlay on the car could be cheaper!
Allan Hetherington, Head of Prestige Car Finance at Anglo Scottish Asset Finance, comments: “A new car’s owner is powerless to prevent their investment’s value from falling, but there’re plenty of measures they can take to avoid its value falling significantly. When it comes to reselling the car or avoiding costly lease charges, these little tips and tricks can make a huge difference for car owners.
