For many people, buying a new car is the second-biggest purchase they’ll ever make, after purchasing their home. A new car isn’t much of an investment, however – as soon as you drive it away from the showroom, its value will take a huge hit. Often, new car buyers are shocked to find out how much their car’s value will depreciate. You can typically expect your car’s value to drop by 10-40% in your first year of ownership, meaning you could be left with a car that’s worth just over half of what you paid for it a year prior.
However, by paying attention to some fine details, you can ensure that your car retains as much of its original value as possible. By actively staying on top of your service and maintenance schedules, avoiding modifications and watching the paintwork, you can manage your new car’s depreciation.
Here, the vehicle finance specialists at Anglo Scottish Asset Finance consider the secret ways that you can save the value of your new car.
- Expect a new car’s value to fall between 10% and 40% during the first year of ownership.
- Your yearly mileage could cause your car’s value to drop even more quickly – if it tops 10,000 miles a year, you could use 60% of the car’s value after three years.
- Expensive modifications and additions to your car are likely to decrease your car’s value, rather than increase them.
- Using regular cleaning products to wash your car could damage its paintwork and cosmetics; always use dedicated car shampoo to maintain that new car shine.
Manage your service timetable
It’s never a great feeling, seeing the service light illuminated on the dashboard. Many drivers pay no mind to the warning, only taking their car for a service at a later date. However, paying attention to your service timetable is crucial to protect your car’s most vulnerable functions and mechanisms.
If your car has failed to meet its service requirements, you can expect its value to drop significantly if you’re looking to resell it. You could even dissuade potential buyers – according to a Kwik-Fit survey, over half of UK drivers would not consider buying a vehicle without a service history! So, if you’re looking to resell or part-exchange, stay on top of your servicing!
Watch the paintwork!
Most car owners are just as concerned about how the car looks as how it performs. Dents and scrapes to your car’s bodywork will reduce its value significantly, particularly because they’re instantly visible to a prospective buyer. Issues under the bonnet might be less obvious, but paintwork is also important to maintain your car’s value.
Keep an eye on any dings and dents – even the most considerate drivers can be subject to pebbles flying off the road. If you’ve been unlucky enough to have sustained damage to your car, investing in targeted cosmetic repairs is a great way to recoup some of the lost value. Leave this work to the pros – nothing’ll drop your value more than a botched touch up job!
If I add an expensive new part to my car, it’ll increase in value, right? Unfortunately for ‘modders’ around the country, this is rarely the case. Modifications are subjective – and the vast majority of prospective buyers prefer stock options on their car. In most situations, that new spoiler is likely to reduce the value of your car, so think twice before having one fitted.
Even the most tasteful modifications could have a negative impact on your car’s value – and you’re unlikely to recoup the value of your investment!
Keep it clean
Understandably, a clean car is more likely to attract buyers than a dirty one. But, if you handwash your car, you could be doing more damage than good. It’s crucial to use dedicated cleaning products like car shampoo, rather than washing up liquid, which can dull your car’s shine. Coarse brushes are another way that you could damage your car’s paintwork – make sure you use softer sponges if you’re handwashing.
Watch what you do in your car…
Snacks are a great addition to a long car journey. However, if you’re going to be eating and drinking, be careful! Your car’s value could drop significantly if you make a mess. Crumbs are an easy fix, but drink spillages can permanently stain seats and leave an odour. If you are going to eat or drink in the car, be careful!
Steer clear of smoking in your car too! Smoke can inhabit the upholstery and leave a long-term odour. You might not notice if you’re a regular smoker, but a non-smoking buyer certainly will! And if they don’t smoke, chances are, they’re not a fan of the smell.
If you’re really concerned about the long-term resale value of your car, a new car might not be for you! Most new cars lose the majority of their value in the first three years after leaving the showroom, and are likely to depreciate more quickly with higher yearly mileage.
Consider your average yearly mileage when buying a car – if you’re covering a significant number of miles a year, a new car will depreciate even more quickly. In this case, it could be worth opting for a lightly used car instead. Weigh up your options early if you know you’ll be looking to resell the car in future!
Allan Hetherington, Head of Prestige Car Finance at Anglo Scottish Asset Finance, comments: “Depreciation is impossible to prevent as the owner of a new car. However, there are measures that you can take to slow it down! Often it’s carelessness or lack of knowledge that prevents new car owners from retaining as much of their car’s value as possible – so take these tips with you!”