Do you intend to sell your old car? If so, it is important for you to learn how a car depreciation works and how it will affect your car’s resale value.
In this artice, we will explain the car depreciation factors and what can you do to improve it.
What does the rate of car depreciation mean?
Car depreciation is the difference in the value of a car between the time you purchase and when you sell it. It refers to the amount of car value an owner will lose over time.
Your car starts to depreciate after you receive it from the dealer!
Many factors may contribute to a car depreciation, but it is most likely due to natural wear and tears. A car that has been regularly used will lower the current car market value.
Average depreciation rate of a car
The value of new cars decreases faster than used cars regardless of the model or brand. You may refer to the visual below to see how a car’s depreciation is counted.
Here are example of calculation that can depict roughly how much depreciation will cost you for a five-year-old car:
Calculation of a Perodua Myvi
Calculation of a Honda City 1.5 L V
Tips to keep down the depreciation rate of a car
Depreciation is meant to happen no matter how careful you are in taking care of your car. But that does not mean that you cannot minimise the depreciation rate.
Here we share the contributing factors that can accelerate the depreciation rate of cars in the market and ways to reduce your car’s resale value.
- Mileage
High mileage means it has been used through and through. The estimated mileage for a year is around 10,000 – 12,000 km.
You are advised to keep mileage readings low if you intend to sell your car later.
- Car condition
Each damage, scratch, or dent on your car gives your prospective buyers a chance to bring the price down by hundreds if not thousands. This applies to the vehicle’s body, interior, and exterior features.
Look after your car and repair any damage as soon as possible. Try to minimise the damage and practice safe driving to avoid unnecessary incidents.
- Service history
It is advisable to keep your maintenance records and papers until the end.
Your service records will help you to prove that it has been serviced according to the schedules required; ensuring its good upkeep. Buyers are more than willing to offer extra money for a car with a well-maintained history.
Remember to keep all your car documents including service records and receipts safe and in one place.
- Keep the interior and exterior clean
A well-kept and clean-looking car will appeal to buyers more. Potential buyers will decide on the price offer based on the appearance of your car.
A regular wash, coating, and vacuuming will do wonders for your car in the long run.
Take better care to minimise your car depreciation
If you are looking to sell your car to buy a new one, we recommend you to take these depreciation factors in account. Understanding how depreciation works is crucial as it could help you save thousands of Ringgit down the road.
We hope you find this article helpful as your reference in the future!
Bjak is one of Malaysia’s largest car insurance comparison platforms that offers 15 insurance brands. Get free car insurance quotes online at Bjak.my and renew your car insurance online in just 5 minutes.
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