Depreciation is a major factor in buying and selling a vehicle. The average auto can lose 30 percent of its value after the first year. After three years — the duration of most leases — the car’s value may have decreased by as much as 50 percent. Those looking to sell or trade-in cars will need to emphasize maintenance to get the most for their vehicle.
There are ways to reduce a vehicle’s depreciation and improve its resale value, whether selling to a private buyer or trading in the auto to a dealership.
1. Buy the “right” car in the first place. Some models and brands simply hold their value better than others. Dealerships will promote this fact when attempting to sell a car. Choosing these types of vehicles can mean a better resale value later on.
2. Keep geography in mind. A convertible won’t be as popular in Alaska as it will be in southern Florida. Don’t buy a vehicle that goes against the norm in a particular geographic area. Otherwise, sellers will be left with a car with little resale value.
3. Stick to standard colors. Fad colors, such as lime green or bright orange, may turn heads, but they’ll be harder to find buyers for later on. This could reduce the asking price for the vehicle when it comes time to sell.
4. Choose the right upgrades. A fancy stereo system or top-of-the-line navigation system won’t necessarily add value to the vehicle. However, leather seats, a sunroof and an automatic transmission are popular among buyers.
5. Maintain the vehicle. Keep records of maintenance that show the car was well cared for. Follow manufacturers’ maintenence schedules for oil changes and tire rotation, among other things.
6. Trade in like for like. A seller may get a better trade-in rate on a used car if he or she is buying the same make in the new vehicle. For example, a Chevrolet dealership may offer a better trade-in price for that old Malibu if the owner is looking at a new Traverse.
Keep in mind that if a buyer is thinking about keeping a car until it’s racked up tons of miles and is generally older than dust, depreciation values really won’t matter much. In those instances, he or she should simply purchase the car liked the best.
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- Buying a vehicle with a better resale value is one way to reduce depreciation.
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