Cars lose money – fact.
However, there are some clever tricks that will help you slow down the rate at which your car depreciates, whether you're buying or owning.
Buy from a dealer and as soon as you drive off the forecourt the value of the car drops. Buy a new car and that drop is even steeper. The depreciation curve on cars is steepest in the first three years, so the obvious tip is buy used not new.
A new big, petrol gulping car with a sparse trim in bright orange is always going to struggle to find buyers later on. So it literally pays to choose a car that will have a ready audience of purchasers when you come to sell. So go popular, choose a well-liked colour and ensure it has all the must have options.
Finally, price. The more you pay over the odds now, the more you will lose later. So know what you should be paying and stick to it.
Knowing which options to specify when buying new or to look out for on a used car are key to a car that will hold on to its value. If buying an executive car metallic paint, leather interior, sat nav and auto will add value. Small cars with air con will command more value than those without.
Some cars are better at hanging on to their value than others. Parker’s annual depreciation survey of the cars bought new in January 2007 and what they were worth a year later, revealed the Mini as the best at beating depreciation. It’s no coincidence that the best performers are city cars so think small to save big. Here are the best ten performers of 2007.
Same thing applies as new when choosing a used car: aim for a desirable model, ditto for colour and make sure it comes with the equipment and options that add value.
Also insist on a fully stamped service book, check number of previous owners (should be one for every 2-3 years of car’s life) and check for a dodgy past.
With the rising cost of petrol and new car tax charges imminent, some cars are going to get mighty expensive to run and own.
So unless you absolutely need a big petrol-powered 4x4 or luxury car, think smaller, leaner and well-equipped to prevent depreciation whacking you big time.
If it is a new or nearly new then franchised dealer stamps will carry more clout. If the car is older than three years then a reputable independent garage will please potential buyers.
A mobile lavatory that’s been parked under a pigeon tree doesn’t impress. A regular clean inside and out, and most definitely when it comes to selling time, boosts the value of a car.
If there is an all-new replacement for the model you are currently driving it will further reduce its values once it gets close to going on sale.
Dealers will tend to offer big discounts on the outgoing model to shift the last of the stock before the new model goes on sale. If you are thinking of selling your car, do it well before the replacement model arrives in the showrooms.
Rack up the miles and you’ll push down the value of the car, especially if the car is new. Keeping the miles down also saves on running costs.
