What are the Factors that Affect the Car Depreciation Rate? from Ajay Vasudevan's blog

The value of a car or any other vehicle starts depreciating the day you buy it. You cannot prevent a car’s value from depreciating. Nevertheless, you can control the depreciation rate. Thus you can get the best value for your vehicle in the market forsecond-hand cars in Kerala.Trusted dealers offer the right price for used cars.

Maintaining the car healthy, undertaking the servicing in scheduled periodicities, periodic inspections, and rectifying defects without delays and such measures can help in improving the life of the car. And thereby controlling value depreciation of it. Here we are looking into various aspects of the car depreciation rate.

What are the Factors that Affect Car Depreciation Rate?

You might be aware of the main factors like age, usage, and condition that lead to car value depreciation. We are elaborating on those as well as other elements that might result in a price drop for the car you want to sell.

1.  What is the Age of the Car?

The first thing every buyer checks is how old the car is. The manufacturing and registration year of the car has a direct effect on its value. Buyers will reduce the price significantly if the car is older than five years. Its offered price will go down much if the car is 10 years or more old.

2.      How Much Distance is it Covered?

This is the second thing that is checked by a car buyer. The kilometers the car has covered will indicate how worn-out the components would be. It is a reality that engine efficiency will go down with usage. Mainly due to carbon deposits and other conditions. Therefore, the kilometer run is one of the main factors that affect the car depreciation rate.

3.      Is the Brand Reliable?

The car brand’s or manufacturer’s reputation also matters when it comes to selling it. A credible brand that is expected to offer support is valued more. This is mainly because the buyer can be sure of the spare support and maintenance aspects. In India, car manufacturers like Maruti have great acceptance in the second-hand car market.

4.      How is the Demand for the Model?

Some models enjoy a higher value and demand than others. The features onboard, the specialties of the engine, the mileage scenario, the manufacturer’s credibility, etc. are the elements that create demand for a particular model. A quick search in the used car market will tell you which are the demanded models and why they are in demand. The depreciation of value for these models will be slower compared to others.  

5.      What is the Condition of the Car?

This is the point where the car owner has a role to play. Carrying out the servicing in manufacturer-suggested schedules, maintaining the car properly, replacing defective components at the earliest and so on will help in ensuring a healthy condition for the car. The used car dealer whom you have approached for selling the car or the individual buyer will check the car as much as possible. A majority of them will undertake test drives also, for confirming the performance and condition. A second-hand car in healthy condition will fetch you a good price. The car’s value will depreciate heavily if its condition is not good.  

6.      How Much Mileage Does it Give?

The mileage or fuel efficiency of the car is a main factor in India. A car with phenomenal fuel economy will get you a good amount. The depreciation of such a model will be less than most of the others. Skyrocketing fuel prices are forcing buyers to take mileage the main thing to be considered for buying a car.

7.      Have Any Accidents in the Past?

The car’s value will depreciate heavily, much more than due to any reason, if it had any accidents in the past. The first thing is that people are apprehensive about buying a car that had an accident. Then the doubts about the condition and performance lead to increased price depreciation of the car.

How to Control Car Value Depreciation?

Car value depreciation is a reality, which cannot be prevented (excluding classic, vintage, and collectors’ cars). However, it is possible to keep it in check and control. As a car owner, you can do many things that will help you get the right price for your car. One of the main factors, that many miss out, on is choosing the buyer wisely. There are many trusted used car dealers, who give the right price for the car. You may opt to sell your car to them, to avoid unnecessary negotiations, unjustified price reduction, and unwanted agent commission.

1.  Pick the Model Carefully

Different car models have different values in the used car market. Some models are highly demanded and hence they have a higher value. The depreciation rate for such cars would be lower than others. You may keep this in mind while buying a new car.

2.      Maintain the Car Properly

Proper maintenance practices enhance the life of the car. Thereby, its depreciation can also be kept in control. A well-maintained car will attract the buyer and hence you can ask for a better resale value.

3.      Consider Buying a Second-hand Car,

Yes, you read it right. Buying a second-hand car will reduce depreciation. A new car depreciates faster than a used one. You will not be losing much money when selling the used car.

To knowing more about car depreciation rates, how to calculate depreciation etc. you may contact us.