There are a number of important factors to consider when deciding on a new car. One key aspect that you should bear in mind is depreciation. All cars depreciate in value over time, but some lose value faster than others so you may not want to buy a car that will see you take a significant financial hit if you decide to sell.
Why do Some Cars Hold Their Value Better Than Others?
A car’s depreciation rate is based on a number of different factors. Ultimately, it is about supply and demand, so cars that remain in demand will hold their value better. This means that luxury brands, trending vehicles, cars known for reliability and those with trendy optional features often hold their value well.
What are Some of the Slowest Depreciating Vehicles?
A car starts to lose value as soon as it leaves the forecourt, but the rate of depreciation can vary greatly. Therefore, it is a good idea to look for vehicles with a slow depreciation rate so that you can retain as much value as possible during ownership. AutoExpress research reveals the slowest depreciating vehicles on the market by looking at the retained value percentage after 3 years and 36,000 miles:
- Land Rover Defender (74.97%)
- Porsche Macan (70.49%)
- Volkswagen Multivan (70.30%)
- Volkswagen I.D.Buzz (70.11%)
- Range Rover Evoque (69.93%)
The Benefit of a Car That Holds its Value
It is important to be aware of depreciation when in the car market so that you can make a smart financial decision. While vehicles will always depreciate, you will find that you could avoid losing out financially by opting for a car with a slow depreciation rate when the time comes to sell the car.
Additionally, deprecation rate is one factor in determining monthly payments on car finance deals, so slow depreciation will give you better value for money. If you decide to take out a contract hire deal or vehicle finance, it can be a smart move to purchase contract hire gap insurance – this will pay the difference between the outstanding balance of your car loan and the amount of insurance payout in the event of a write-off.
What Can You do to Retain Value?
There are things that you can do to slow down the rate of depreciation. The key is to keep the car in the best possible condition, so regular maintenance, sticking to the service schedule and keeping mileage down are key. You should also clean the car inside and out on a regular basis and keep hold of any receipts for maintenance and repairs.
Car depreciation is an important factor to consider when in the market for a new car. Ideally, you want to find a car with a slow rate of depreciation so that you can avoid taking a large financial hit and preserve value for when you sell or part exchange in the future.