General age depreciation is the first and most impactful cause of a car losing its value over time. Surprisingly, in many cases, a brand new car can lose as much as 35% of its initial value in the first year of ownership, and up to a massive 50% over a period of three years. While certain makes and models suffer from age depreciation more than others (with some cars only suffering a depreciation of 15% in the first year), this is still a startling figure that may take many people by surprise during their car valuation, especially if the car is only a few years old.
Mileage is a good indication of a car’s usage in relation to the age of the vehicle. For example, if a car that is three years old has a total mileage of 75,000 miles that shows that the car travelled on average 25,000 miles each year, more than three times the UK average.
Typically, the fewer miles a car has done over the years, the more value it will retain during its next valuation. To retain as much value as possible, it’s wise to try and avoid non-essential journeys in the car, or using public transport such as trains for lengthier trips.
It stands to reason that the more service history you have on your car, the more value the vehicle will ultimately retain when it comes to your next car valuation.
It’s important to any buyer that they know what the history of the vehicle is, and a complete service history gives a complete track record of all work carried out on the vehicle, as well as any previous issues it has had.
To ensure you don’t suffer a loss of value, try to retain all certificates and paperwork from your vehicle’s MOTs and servicing appointments.
Surprisingly, the size and type of the vehicle can also impact its value, with larger cars such as 4x4’s or luxury models reducing in value at a faster rate than smaller, more inexpensive vehicles.
This is largely due to the running and maintenance costs of larger vehicles. While smaller cars are commonly cheaper to maintain and operate, larger vehicles and luxury models come with more substantial bills for commodities like car insurance, servicing costs, fuel consumption and, in some cases, road tax.
These factors can make the car less appealing during resale, and therefore can have an impact on the average market value of a vehicle.
The reputation of a certain model or manufacturer can have a bearing on the overall car valuation. For example models and manufacturers involved in the 2015 car emissions incident saw a dip in sales and public interest, reducing the market value of those vehicles.
Whether it’s a general bad reputation of a certain line of vehicle, poor safety and crash test ratings, or a public news piece such as the emissions incident, a bad reputation can easily affect the overall value of a car during resale, and can often be accounted for during a car’s valuation.
Newer vehicles with remaining manufacturer warranties can often fair well during car valuations, especially if there are several years left on the agreement. Many cars have a standard manufacturer warranty of 3 years; however, some makes and models some with extended warranties which can stretch as far as 7 years from the date of purchase.
Should you want to sell your car it’s certainly worth checking the details of your initial warranty guarantee, it could well be an added bonus to the buyer and help you gain a higher vehicle valuation in the meantime.