While there’s no way to stop a new car depreciation completely, it may be possible to slow it down. First, we’ll talk about what depreciation is, then we have a few tips to slow it down.
What is New Car Depreciation?
An asset loses value over time, particularly due to wear and tear, and that is called depreciation. In vehicles, it’s fairly common knowledge that as soon as you drive a new car off the lot it starts to depreciate. A brand new car could lose 20% of its value just in the first year. Here’s a few tricks to help minimize the damage.
Choose a Popular Model
It might be tempting to get a super rare or customized car, but if depreciation is a concern, that’s not the way to go. Popular models in common colours (like white, grey, or black), tend to lose value slower because they retain their resale value for longer.
Certain models have a reputation for holding onto their value for longer. Jeep Wranglers are consistently at the top of the list for lowest depreciation. Do a little research and see which vehicles in the style you’re looking for have the best value retention.
Buy Used
Since vehicles lose the most value in the first couple of years, buying a used vehicle makes a lot of sense. When you buy a used car from a dealership you can be pretty certain it’s gone through an inspection and any issues have been resolved prior to the sale.
Vehicles last a lot longer than they used to, so that’s another reason to buy used. You can get a reliable car that you’ll drive for years to come for much less than new.
Add Protective Treatments & Accessories
Driving in Canadian winters can be a messy business. Investing in some quality floor mats to protect the vehicle’s interior from salt and slush can help with value retention. Rustproofing and paint protection are smart investments as well to keep your car looking like new for longer.
Maintenance records
Regular maintenance is an important step to help your car retain its value. Besides, don’t you want your car working properly while you have it on the road? Most of the tips we have here for reducing depreciation are just good common sense car ownership tips as well.
Extended warranty
It might seem like just an extra upfront cost, but an extended warranty is a valuable addition. You’re essentially pre-paying for repairs to the vehicle. It’s worth it to give yourself peace of mind that you won’t be stuck with a big repair bill you can’t afford.
There’s no way to completely stop or prevent new car depreciation. Keeping these things in mind can help you invest in a car that will not only last a long time for you, but will hold onto its value for years to come.