How Do Cars Really Depreciate & When To Buy/Sell?
Cars are a headache, it’s often said and in some ways it’s true, there are so many questions, do you buy outright or get finance? Do you buy or lease? Once you have it how long do you keep it? Unsurprisingly there are advantages and disadvantages for all of these methods of vehicle acquisition and it often just depends on what suits you the best.
When It’s Driven Off The Court!
There’s a saying that car value depreciates by 10% the second the car is driven out of the dealership and although that’s maybe not quite true and depends on the make and model it is certainly the case that in the first year or two there is the biggest drop in value, on average about 15% in the first year, so there’s a reasonable argument that unless the prestige of being a new vehicle owner is important to you then buying a vehicle a year or two old is a much better idea from a financial point of view and if you can find a low mileage car then it will still be unlikely to require much in terms of repairs.
After A Few Years
If you are talking about buying a car which is a few years old then it’s here that the debate really starts to get interesting as it’s more of an educated guess a this point, you’ll save a reasonable amount of money upfront but the risk you are taking is the condition of the vehicle and the risk of high and spiralling repair costs if you are unlucky. But it’s not all bad to buy 2nd hand, just make sure you do your research, have the car checked out by a mechanic before committing and check the vehicle history out, ask if there is a guarantee included if buying from a dealer.
What About Leasing?
Leasing is becoming more important and can get you a new car for a fixed monthly payment, it’s a good idea to check out is this is better value than buying on finance though as you won’t own the car at the end of the contract. It’s easy to check out the costs and then compare this to what you can get on good Driven Car Loans to own the vehicle.
Older Cars
If you are really budget conscious then buying a much older car can be a real cost saving if you are prepared for it to be spending more time and expense on upkeep and repairs and the lost time that this entails. But if this is not a problem to your lifestyle then you can save a packet and still be driving around happily.
Run It Into The Ground
It’s becoming increasingly common to buy a new car and run it for it’s whole lifetime and surprisingly this is one of the most cost-effective ways of owning a vehicle. You will also have the peace of mind of knowing the history of it, what repairs have been done and how many, if any at all, accidents it’s been in.
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