When it comes to calculating the value of your car, there are several things to take into consideration. From the number of previous owners the vehicle has, to the physical condition of the car, to the service history an owner has in their possession. It’s fair to say there is a wide range of factors that can affect how much your car will be worth at resale and understanding this will help to calculate how much your car has depreciated.
One of the major factors that will affect the overall resale value of your car is mileage. If you were to value two identical cars with the same service history, condition, number of previous owners and requisite paperwork, but one has considerably higher mileage, the car with higher mileage will have a lower resale value.
Simply put, this is due to ‘wear and tear’, and indicates there is a higher likelihood that the car will encounter technical issues in the future, as the gradual impact of those extra miles will inevitably take a toll on a vehicle.
The UK's average annual car mileage can fluctuate year-on-year, but if your car exceeds this figure, it can lose value even quicker. Car mileage can be grouped into bands of 20,000 miles.
This is a convenient model for calculating car mileage depreciation, as each time a car passes through each band, it will lose on average around 20% of its current value.
A loose example would be a new car purchased for £20,000 and then sold a few years later with 40,000 miles on the mile counter. Based on mileage alone, the car would be worth around £12,800 at resale, its value having decreased from £20,000 to £16,000, then £16,000 to £12,800 (each a decrease of 20%).
However, it’s important to remember that car mileage is not the only thing that affects value, and during this period the car will have aged, plate changes will have occurred (at which point older models tend to lose resale value), cosmetic or functional damage may have occurred, as well as other possible factors that impact resale value.
It’s important to remember that when trying to calculate the effect of mileage on car value, other factors such as age, plate changes and ‘wear and tear’ will inevitably occur during longer periods of use too, so there’s plenty to consider. So, if it's time to sell your car, whether you're upgrading or opting for a more economical car, you can get a free and accurate car valuation with us by simply entering the registration number of your vehicle on our site, which is a much quicker and simpler solution to calculating the value of your car yourself! Click here to value your car.